In his Forbes article, “The Folly of Trying to Spend Your Way to Innovativeness,” Bill Fischer, MIT Sloan Executive Education faculty and Professor of Technology Management at IMD, cites a Booz & Co. 2011 study finding that “only three of the most innovative companies in the world were among the 10 biggest spenders on R&D.” As Fischer points out, “Booz & Co.’s research has consistently shown over the past eight years, [that] there is no long-term correlation between the amount of money a company spends on its innovation efforts and its overall financial performance.”
The Booz & Co. study specifically looked at internal innovation and R&D efforts. But innovation does not necessarily need to be developed in-house; in fact, it can be purchased. For example, since 1999, IBM has acquired more than 130 companies—some of which are truly innovative.
Globalization and the information age have made it crucial for organizations to stay in tune with their markets, changing trends, and new innovations in an effort to remain relevant. Entrenched beliefs and tried and true systems, however, are often favored long after they have stopped being effective. Where should executives turn for fresh perspectives and new recipes for success? The answer may be among peers.
Industry peer networks (IPNs) are small groups of noncompeting peers who meet on a regular basis in an environment of intimacy and trust, with the purpose of exchanging information and discussing important company matters under the greater goal of improving capabilities and increasing profit share in the market. Ezra Zuckerman, Professor of Technological Innovation, Entrepreneurship, and Strategic Management at MIT Sloan, has studied the effects of industry peer networks in the last decade, collecting data about the role and pervasiveness of relationships among noncompeting peers and, more specifically, industry peer networks in the U.S. economy.
Gustavo Pospischel, Senior Director of Core Mobile Engineering at Sears Holdings Corporation, spoke recently with MIT Sloan Executive Education about his experience on campus, why he chose MIT Sloan, and the benefits he received from the programs.
What executive education courses have you taken at MIT Sloan?
I’ve taken so many executive education courses at MIT Sloan, I don’t remember them all. But, the two I found very valuable were those taught but Professor Arnoldo Hax and Duncan Simester. One focused on the Delta Model and the other on technical marketing. Hax was amazing. It was a true eye-opening experience.
How have you applied what you learned during the courses back at your workplace?
Aside from expanding my knowledge base, I found the methodologies and business cases very beneficial and was able to apply what I learned to great success.
One famous scene from the movie Five Easy Pieces shows Jack Nicholson ordering a side of whole-wheat toast with his omelet at a diner. He’s then informed that the system doesn’t allow sides of toast. So he orders a chicken salad sandwich on whole-wheat toast—without butter, lettuce, mayonnaise, and chicken.
Nearly everyone recognizes what’s wrong with the “system” in this scenario—the customer doesn’t easily get what he wants. But the traditional approach to “fixing” this might be to simply add more options for what the customer might want. That change would impact the diner’s ordering system, the inventory needed in the kitchen, and even how the kitchen staff cooks. So sometimes it’s easier to simply say, “the system doesn’t work that way,” or, in other words, “no substitutions allowed.”
Google “HR” and “seat at the table” and you’ll find articles from nearly ten years ago lamenting why the human resources function does not have such a seat—in other words, it has little voice in the executive suite. Part of the reason may be how HR practitioners view themselves. The 2013 State of Talent Managers Report from New Talent Management Network found that “the modest and siloed career ambitions among those in HR suggests that we must either meaningfully shift how we grow HR talent or become comfortable having marginal impact…[as a result] talent leaders will likely develop more myopic and less strategic solutions.”
There is great potential if companies can change how they view HR—and how HR views itself. Commenting on President Obama’s plans to improve the economy by strengthening the manufacturing sector, Tom Kochan, Professor of Work and Employment Research and Engineering Systems at MIT Sloan, told HR Executive Online, “One of the most important factors in [the manufacturing industry’s] success is HR.”