Category: Work and Employment

MIT's Bengt Holmström wins 2016 Nobel Prize in economics

Posted by MIT Sloan Executive Education - 16 days ago

MIT's Bengt Holmström wins Nobel Prize in economics

Bengt Holmström, an influential MIT economist and long-time MIT faculty member, was this week awarded the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. He shares this honor with Oliver Hart of Harvard for their deeply influential work on contract theory, including the optimal design of contracts between employers and employees.

Holmström holds a joint appointment between the Department of Economics and the MIT Sloan School of Management.

"MIT's latest Nobel laureate is not only an extraordinary economic thinker," said MIT President L. Rafael Reif while introducing Holmström at an on-campus press conference on Monday morning. "Bengt Holmström is also an outstanding citizen of MIT and a delightful human being."

Oliver Hart and Professor Holmström have devoted their lives' work to what's called contract theory—how and why contracts work and how they can be made better. This niche has just begun to gain the same cachet in academic circles as game theory and the study of stock market fluctuations.

"Their analysis of optimal contractual arrangements lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions," the Royal Swedish Academy of Sciences wrote in its Nobel announcement.

Their work has touched on everything from executive pay to health insurance deductibles to the use of tax shelters and how to divide up control of a firm when it's not explicitly written into an agreement. Holmström's economic models, for example, can help companies develop the right incentives to optimize employees' performance.

"This theory has really been incredibly important, not just for economics, but also for other social sciences," said Per Stromberg, a member of the prize committee and professor at the Stockholm School of Economics.

Continue reading

How meta data is changing expectations of privacy at work

Posted by MIT Sloan Executive Education - 1 month ago

How metadata is changing expectations of privacy at work

Workplace privacy and the expectations that go with it is a thorny and ever evolving issue. A few decades ago, many employees likely had high expectations of privacy in the workplace, as the breach of it was relegated mostly to overheard phone conversations. More recently, with the advent of email and its proliferation into the workplace, the thinking around workplace privacy has changed. Today, many organizations require their employees to sign paperwork indicating they understand that any and all emails sent through the company's email system and servers are the property of the organization—and that the employee should have no expectation of privacy.

While one may agree to the idea that the organization owns the emails sent through its own system, they may be taken aback at the thought of someone--a manager, an IT person, an HR executive--actually reading those emails. In most cases, of course, no one is reading any one employee's emails unless there is cause to, such as suspected misbehavior.

This topic was a discussion point at the recent Boston CHRO Leadership Summit (MIT Sloan Executive Education was a sponsor). The executive boardroom session, "The Gold Mine Between the Lines—Analytics-Driven HR," focused on organizational analytics and how they are evolving to drive wide-scale transformation. This discussion included the use of meta data around email to understand how an organization collaborates and reaches (or does not reach) performance management goals. The diverse group represented private sector businesses, non-profit organizations, and governmental agencies. Interestingly, some of the participants commented that their millennial employees (in general) aren't concerned by the idea of their employer looking at email meta data, or even the contents of email.

Continue reading

When the walls come down: Weighing the pros and cons of modern work spaces

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

MIT Sloan Professor Christian Catalini weighs in on the pros and cons of modern work spaces

A corner office--replete with windows and great views--was once a highly coveted perk in the world of work. Many businesses today, however, have opted for a more open floor plan. Over the past two decades, workers have seen office walls shrink to partitions and then disappear altogether in favor of shared offices, open spaces, and "bull pens." Also influencing our view of the traditional office setting is the growing popularity of remote work--more and more employees are choosing their home office over a corner one.

So how do these different environments actually affect the way we work? Do open floor plans truly make us more creative and collaborative, or are we just more distracted? Conversely, does confinement make us more productive? Could cubicles have a comeback? A recent Boston Globe article cites a mix of feelings over the open floor plans that, according to architecture and design firm HOK, account for more than 80% of office renovations in the past two years.

"One way an open office space can foster a more collaborative environment is by increasing the chances that people will interact and exchange ideas," says MIT Sloan Professor Christian Catalini. Catalini has studied how proximity impacts collaboration and ultimately the generation of new ideas, using data from a large, science-intensive campus: after co-location, scientific labs were 3.5 times more likely to collaborate with each other than before. Moreover, the discoveries resulting from their daily interactions (serendipitous or not) were more likely to be of high impact.

Continue reading

New approaches to the skills gap

Posted by MIT Sloan Executive Education - 4 months and 29 days ago

Last week, George Westerman, Research Scientist at MIT Sloan and the MIT Center for Digital Business, showed a headline from the Wall Street Journal article, "CIOs, Facing IT Skills Gap, Eye the Gig Economy for Talent," to the attendees of a panel he moderated at the MIT Sloan CIO Symposium 2016. The panel discussion, Developing your Organization's Skills for the Digital Future, played to a packed room.

Gerald Chertavian MIT

While turning to freelancers and contract employees participating in the gig economy may be one solution to the talent gap, there are companies taking other approaches as well. One panelist in the skills discussion at the MIT CIO Symposium may have offered a solution for winning the talent war. Gerald Chertavian, CEO and Founder of Year Up, believes that there’s a wealth of untapped talent among the six million U.S. young adults who are "out of work, out of school, and without access to the economic mainstream." As he told the attendees, "These are smart, hard-working young people who just happen to have been born or live in the wrong zip code, essentially making a college education impossible for them."

Chertavian's organization works with more than 250 organizations and companies to develop the talent in these young people and move them into white collar, career-focused jobs, such as software engineers and (highly prized) Java developers. The list of companies turning to Year Up to address their talent shortage is impressive and includes Accenture, Airbnb, American Express, athenahealth, AT&T, Bank of America, Biogen IDEC, Cisco, Deloitte, Facebook, GE Energy, Google, and many others

Continue reading

The real costs of layoffs

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


Corporate layoffs, often referred to as "downsizing", are very common nowadays. In the past, layoffs were a last measure for companies that were truly struggling. Or, downsizing was used only at times when the economy was exceptionally bleak.

So, why do companies now frequently use layoffs as an easy cost-cutting measure? And, what are the real costs of doing so? 

Corporate downsizing is often tied to short-term cost cutting measures. Unfortunately, this has become a more common practice, especially with publicly-traded companies, where there is extreme pressure for organizations to focus on quarterly profitability and share-holder value. Although layoffs may achieve these short-term financial objectives, the true costs down the road are often higher.

For example, when an employee is laid off from a company, a lot of knowledge leaves the organization. Morale amongst remaining employees is often lower, and the existing workforce is likely encumbered with having to fill the void and take on additional responsibilities. And what happens when that same company needs to augment their workforce again? There are costs to recruit, train, and retain the new employees.

Continue reading

Is the tech industry overlooking half its talent pool?

Posted by MIT Sloan Executive Education - 5 months and 29 days ago

There is much talk as of late over the lack of women working in and leading organizations in the technology industry. For example, a report by the American Association of University Women concluded that women made up just 26% of computing professionals in 2014, a substantially smaller proportion than 25 years ago and about the same percentage as in 1960. Women in engineering roles in the US are even less represented, making up 12% of working engineers.

Mitra Best

MIT Sloan Executive Certificate holder and U.S. Innovation Leader at PricewaterhouseCoopers, Mitra Best, may have said it best in her recent blog post on CIO Dashboard: "It is ironic that while technology has broken many barriers to innovation, barriers to women’s engagement are rising." Mitra recalls her time as an undergraduate in computer science in the late 80s, when approximately 30% of computer graduates were women. She had assumed at that time that we’d reach parity in 10 to 15 years and was recently disappointed to learn that, in 2015, only 18% of computer graduates in the US were women.

Unfortunately, the underrepresentation of women in tech is, for the most part, a global phenomenon. In the U.K., women represent only 17.5% of computing professionals, and only 8.2 percent of engineers. In Israel, known for its thriving tech scene, women compose only 12% of PhD graduates in engineering and only 15% of professors in STEM subjects.

There is hope. Female scientists, technologists, engineers, and mathematicians worldwide are breaking barriers and making incredible contributions to their fields, despite the odds. Projects like The Internet of Women, an upcoming book and global community to support women in technology founded by leaders from Cisco and New York Institute of Technology, prove that there are exciting cultural shifts taking place around the globe. Some of these achievements, particularly in the Middle East and Africa, are in part driven by the UN's Sustainable Development Goals and Millennial Development Goals, which emphasize gender equality and technology education for girls, respectively.

Continue reading

Five tips for increasing your productivity in 2016

Posted by MIT Sloan Executive Education - 10 months and 2 days ago

Extreme Productivity

Have you made your 2016 New Year's resolutions yet? If you're a high achiever, increasing your productivity next year may be on your list. Many executives come to MIT Sloan Executive Education seeking techniques for making themselves and their teams more focused, efficient, and productive, and several of our faculty are well renowned for their thinking on these topics. We've summarized some of their thinking below.

Tips for increasing your productivity in the New Year

  1. Robert Pozen, Senior Lecturer at MIT Sloan and author of the best-selling book, Extreme Productivity: Boost Your Results, Reduce Your Hoursrecommends starting with setting and prioritizing goals. "Most professionals have not taken the time to write down their goals and prioritize them. Without a specific set of goals to pursue, many ambitious people devote insufficient time to activities that actually support their highest professional priorities," Pozen told us in our previous post, "Ready, set, prioritize."
  2. Dr. Tara Swart, Senior Lecturer at MIT Sloan recommends you make a serious and dedicated commitment to getting seven to nine hours of quality sleep. "There's a perceived 'cut off' at the neck. In reality, there is a strong brain-body connection. The conditions of our bodies directly affects the quality of our thinking," Swart comments in the previous post, "The leadership skill you’re neglecting? Sleep". Despite many people claiming they only “need” a handful of hours of sleep each night to be productive, science proves that’s a myth; 98-99% of people physically require the recommended amount of sleep.
  3. Pozen also advises people to cut through the clutter. "First, let's understand that professionals are held back from being productive by both external and internal forces. External forces are things like emails and meetings--burdensome tasks that can detail even the most promising schedule. And internal constraints, like procrastination and perfectionism, can make us our own worst enemy. Pozen provided tips for how professionals can cut through the clutter in "Five tips for improving every-day productivity."

Continue reading

Companies and employees still struggle with work-life balance

Posted by MIT Sloan Executive Education - 10 months and 11 days ago

work-life balance

This post is the first in a series designed to help our readers achieve a more productive, healthy, and less stressful 2016. 

Work-life balance seems an ongoing struggle for both organizations and individuals. In fact, it's such a pervasive issue that Mayo Clinic, a nonprofit worldwide leader in medical care, research, and education, offers tips to reclaim work-life balance control.

On the one hand, there are organizations like Amazon that seem to shun the idea of work-life balance. A recent New York Times piece "Inside Amazon: Wrestling big ideas in a bruising workplace," described the company as one at which "culture stoked their [employees’] willingness to erode work-life boundaries." The exposé detailed a business that rewards employees toiling long and late and subjects employees to "marathon conference calls on Easter Sunday and Thanksgiving, criticism from bosses for spotty Internet access on vacation, and hours spent working at home most nights or weekends." The New York Times piece even quoted (on record) an Amazon employee who stated, "One time I didn’t sleep for four days straight." 

Continue reading

Search innovation@work Blog

Subscribe to Blog by Email

Cutting-edge research and business insights presented by MIT Sloan faculty.

Interested in writing a guest post?