How should hotels respond to the sharing economy?

Posted by MIT Sloan Executive Education - 4 days ago

The sharing economy—also known as the collaborative consumption or the peer economy—is disrupting many industries. The sharing economy is one where participants share products or services—such as cars or spare rooms—instead of individual ownership. 

Airbnb is the one of the pioneers of the sharing economy and seems to be a major disruptor in the traditional hotel/hospitality market. (Incidentally, one of the founders of Airbnb was a student of Nelson Repenning, Professor of System Dynamics and Organization Studies at MIT Sloan; Repenning mentions this in his innovation@workTM webinar, “Useful Does Not Always Mean Used”.) Airbnb rents lodgings in more than 34,000 cities in 190 countries and has served more than 17,000,000 guests. What was once thought of as a place to find vacation housing is now frequently used by business travelers as well; as of late July 2014, the company saw 10% of its revenue from business travelers.

One would think the hotel industry would be up in arms, worried, and reacting the way the taxi cab industry is to Uber and Lyft. According to Fast Company, however, the hotel industry is not overly concerned—or so they claim. The magazine quotes Hilton Worldwide EVP Jeff Diskin as saying he “loves what Airbnb is doing … [offering a more] home-like experience.”

It appears the actual revenue impact is minimal; one recent research report found that “every 1% increase in listings [on Airbnb] in a given market would result in a 0.05% decrease in quarterly hotel revenues.” While the revenue Airbnb is siphoning from hotels is having minimal impact, its rapid growth is still worth watching. As noted in Fast Company, “At the current rate of expansion, Airbnb … will soon surpass the InterContinental Group and Hilton Worldwide as the world’s largest hotel chain.”

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The odd man out may make for a better team

Posted by MIT Sloan Executive Education - 11 days ago

Understanding dispersed team dynamics is a timely consideration, as non-traditional teams are becoming more and more commonplace. Corporations are cutting down on real estate costs, offering employees more flexible work models, and investing in expertise located anywhere and everywhere around the world, resulting in geographically dispersed collaborations. While collocated teams (every team member working on the same site) may have the advantage over dispersed teams in many respects, studies show that more thoughtful configuration of dispersed teams may actually give them the upper hand.

“Within dispersed teams, there is first and foremost a mutual knowledge problem,” says JoAnne Yates, Sloan Distinguished Professor of Management, who teaches in the new, upcoming Executive Education program, Communication and Persuasion in the Digital Age. “When you’re collocated in the same building, you are aware of what your team members know and do not know. And you understand context. When working across distances, this is not necessarily true, and there are all kinds of failures that can come from that. You may not, for example, understand delays in communication. When you don’t get a response right away and you’re expecting one, you make all kinds of assumptions, and most are disparaging about the other party. Then perhaps you find out there was a holiday—like Patriot’s Day, which occurs only in Massachusetts. It’s important to have ways of understanding the specific context your colleagues are working in and of establishing trust and common ground.”

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Will online reviews require proof of purchase?

Posted by MIT Sloan Executive Education - 18 days ago

The success of recommendation and review websites and applications such as Yelp and TripAdvisor are undeniable. As of the end of July 2014, Yelp had a cumulative 61 million reviews. These reviews are quite powerful: studies have found that 88% of consumers trust them. Surprisingly, the vast majority of reviews on Yelp receive four or five stars (out of five).

But mention Yelp to a chef or restaurateur, and their reaction is likely to be much less positive. One of the issues is that of “cyber-shilling,” where consumers are paid to write reviews—positive or negative. And there have long been rumors and anecdotes of Yelp forcing businesses to pay to suppress negative reviews; this accusation has come up again in a recent shareholder lawsuit against Yelp. The outrage amongst the hospitality community in particular is so strong that a group of French restaurateurs and hoteliers is petitioning France’s Minister of Commerce to effectively ban all defamatory reviews.

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Changing the mind of a leader—literally

Posted by MIT Sloan Executive Education - 26 days ago

Today’s most effective leaders are skilled at making sense of complex environments. They are continually moving away from "command and control" leadership models to a "cultivate and coordinate" approach. These leaders harness “aha” moments and turn them into business innovations. And they take risks on a regular basis in order to revise their map of what’s really going on in their organization and the marketplace in which they operate. These leaders are internally powered by an innovative mindset that quite truly changes the playing field in which all businesses operate.


Then there are the rest of us—the vast majority of people in management and leadership positions—who fear failure and whose ability to innovate is underutilized; whose safety-first approach to doing business has likely served us well in the past but is now holding us back. 

What if you’re the kind of leader who feels stuck in old ways of doing things? What if you’d rather not be? Is it really possible to change your mindset—or the mindsets of your team?

Management experts are looking to neuroscience for the answer, and the answer appears to be a resounding “YES.” By probing the neural roots of behavior, brain science is helping leaders create change in themselves and in others and may indeed have great implications for the world of work. 

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MIT Sloan Professors Catherine Tucker and John Van Maanen honored with prestigious awards

Posted by MIT Sloan Executive Education - 1 month and 2 days ago

MIT Sloan Professor Catherine Tucker was recently was awarded the 2013 Paul E. Green Award from the American Marketing Association (AMA). The annual award honors the Journal of Marketing Research article that demonstrates the most potential to contribute significantly to the practice of marketing research. Tucker’s winning paper, which was co-authored with Anja Lambrecht (London Business School), is entitled: “When Does Retargeting Work? Information Specificity in Online Advertising.” The award was presented at the AMA’s Summer Marketing Educators’ Conference held in San Francisco on August 2, 2014.

MIT Sloan Professor John Van Maanen is the recipient of the 2014 Distinguished Scholar-Practitioner Award, an Academy of Management (AOM) Career Achievement Award. Nominated by Academy members for his dual contributions to management scholarship and practice, the award is given to “the practitioner-scholar whose sense of inquiry and pursuit of knowledge have risen above ‘just doing’ to using practice-based learning to influence theory and research-based theory to influence practice.” 


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Market Basket: A case study unfolding before our eyes

Posted by MIT Sloan Executive Education - 1 month and 9 days ago

Various disciplines of business have well-known case studies: in crisis communications it’s the example Johnson & Johnson set while communicating about the Tylenol crisis of 1982; for business cost-cutting it’s the story of American Airlines discovering it could save $40,000 per year by eliminating the olive in the salad served to passengers. The story has moved to the national stage, where we are all watching a future business case study unfold—the saga of Market Basket. We just don’t know—yet—what the result will be.

For those unfamiliar with Market Basket, it’s a small, regional grocery chain with 71 stores in Massachusetts, New Hampshire, and Maine. For decades, two members of the family that owns Market Basket—Arthur T. Demoulas and Arthur S. Demoulas—have been fighting for control of the business. In late June of this year, Arthur S. and other board members fired then-CEO of Market Basket, Arthur T. Less than one month after Arthur T.’s removal, Market Basket employees began protesting the move. As of this writing, it's nearly two weeks into the protests, which have left store shelves empty of products, rallied customers on the side of the protesting employees, and even prompted some elected officials to weigh in.

While the story itself is fascinating and dominating the news in the region, what are the business lessons that are unfolding? Is it a labor strike, with workers making demands of management? Is it an example of how to not handle communications? Is it an example of why investing in employees is a smart business decision? At this point, it looks like the answer is yes to all the above. Here’s why.


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“Unreally” engaging online learning

Posted by MIT Sloan Executive Education - 1 month and 19 days ago

Imagine, if you will, that you are sitting in a conference room in Kendall Square on Friday, October 26, 2012. Hurricane Sandy has swept through the Caribbean, ravaged the east coast of the U.S., and is barreling towards New England. Domestic and international flights are being cancelled by the thousands.

On Tuesday morning of that week, MIT Sloan Executive Education is expecting over a hundred executives to attend a hot new program on managing in the era of big data. If you cancel, which surely you must, you will not be able to reschedule this for many more months.

This is the scenario Dr. Peter Hirst, Executive Director of Executive Education, MIT Sloan School of Management presented to attendees of the MIT Technology Review Digital Summit. The Summit, which took place in mid-June 2014, examined tomorrow’s digital technologies and explained their global impact on both business and society.


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The real challenge for self-driving cars

Posted by MIT Sloan Executive Education - 1 month and 24 days ago

It’s a given that almost all new technologies foster some unintended consequences. Take mobile phones: what was once viewed as revolutionary is now something ubiquitous. But the ubiquity of mobile phones has resulted in 1.3 million vehicle crashes in 2011—a full 23% of auto collisions that year involved cell phones. Despite the large number of incidents, the laws around texting while driving vary widely. Thirteen states— Washington, D.C., Puerto Rico, Guam, and the U.S. Virgin Islands—all ban drivers from using mobile phones while driving. Forty-four states, Washington, D.C., Puerto Rico, Guam, and the U.S. Virgin Islands all ban text messaging while driving.

It makes one wonder how the U.S.—either federally or state-by-state—or any government for that matter, will determine how to react to the emergence of commercially available self-driving autonomous cars. What was once viewed as “science fiction” is soon to be a reality on the roads. As Erik Brynjolfsson, Professor of Information Technology at MIT Sloan School of Management, told the Wall Street Journal, “About 10 years ago, I was teaching a class at MIT. One of the topics of discussion was what machines can do and what machines can’t do. One of my examples of things that machines can’t do was drive a car.” Fast-forward to 2012, when Brynjolfsson was able to take a test drive in a fully automated Google car. And, Google’s not the only innovator working on self-driving cars—Nissan has committed to having commercially viable autonomous drive vehicles on the road by 2020. So, it’s not a matter of if, but when.


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