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Category Archives: Operations Strategy

Three ways to profit from business complexity

Business complexity is usually seen as an obstacle to increased profit margins. A publication of The Global Simplicity Index revealed that complexity is costing 200 of the biggest companies in the world 10.2% of their annual profits—which, collectively, totals over $237 billion. But other recent studies show there is a profitable flipside to business complexity—a relatively unexplored area of opportunity hiding in plain site. For some companies, managing business complexity can be a unique opportunity to grow their market share.

Not All Complexity in Business is Value Destroying

According to Martin Mocker, Research Scientist at MIT’s Sloan Center for Information Systems Research (CISR), not all complexity in business is value destroying. In fact, in some instances business complexity can be value-adding, offering companies an opportunity to grow their market share. The key, says Mocker, is to focus on complexity that delivers “variety seeking, one-stop-shopping, customization, or seamless integration.” Finding balance, “keeping the complexity of their processes and systems—both internal and customer-facing—under control,” is the way to manage business complexity toward a profitable advantage.

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Happier employees sell more fries

The signs held by recent striking fast food employees say, “We are worth more.” They are, in fact, right. Retail employees are worth more, and paying them more can result in higher profits.

Those retailers who doubt this should take a close look at Costco, Trader Joe’s, and QuikTrip Corporation (a convenience store chain). Those firms, according to Zeynep Ton, Adjunct Associate Professor of Operations Management at MIT’s Sloan School of Management, pay their employees well—and it shows in the firms’ profits.

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Three ways to use privacy policies to build stronger customer relationships

In the quest for progress, companies continue to explore how technology can interpret consumer data to improve our quality of life. For example, Google continues to push boundaries with its latest invention, Google Glass, designed to display information in a smartphone-like hands-free format and interact with the Internet via natural language voice commands (see video below).

But with this new breakthrough comes increased concerns. Recently, eight members of the House Privacy Caucus sent a letter to Google co-founder and CEO Larry Page concerning the privacy aspects of Google Glass—and for good reason. The new Google Glass technology exposes anyone in the path of a Google Glass wearer to unauthorized photography and monitoring. Unfortunately, the lines are becoming increasingly blurred between using big data to improve our lives and intruding upon our privacy.

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How to combat team failure and drive innovation using the X team

Critical studies show that the real work of successful innovation starts and ends with the team, and that the way we build and manage teams is what is truly responsible for the success or failure of “the next big thing” in innovation.

Most teams fail due to a perfect storm of several factors such as lack of effective communication, inefficiency, lack of clearly defined roles and goals, and poor leadership. But even successful teams struggle against these obstacles on a daily basis and still there are others that perform way above and beyond expectations. What do successful teams do differently?

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Retailers & Paula Deen: discontinue or pull products?

The recent news around Paula Deen demonstrates the bind retailers get into when making deals with celebrity product endorsers—what do you do if (or when) the celebrity finds herself or himself in a scandal?

Many brands, with the notable exception of QVC, have terminated their relationships with Paula Deen—or have at least appeared to sever their ties with her. But making press statements about ending partnerships is slightly different from the actual impact on retail operations. After all, there are still products sitting on the shelves.

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