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Category Archives: Research

MIT Sloan professors’ award-winning paper points to shift in sales distribution

A study of the Pareto Principle and the Internet’s “Long Tail” phenomenon by MIT Sloan Professors Erik Brynjolfsson and Duncan Simester recently earned the duo a prestigious award—and reveal results that point to a shift in the distribution of product sales.

The big data experts won the 2013 Management Science Best Paper Award sponsored by the INFORMS (Institute for Operations Research and the Management Sciences) Information Systems Society. The award recognizes the best contribution to the theory and practice of information systems among papers published in Management Science in the previous three years. The winning paper, “Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales,” is co-authored with Jeffrey Hu (a PhD graduate of Sloan’s IT group, now at Georgia Tech’s Scheller College of Business).

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Pitch perfect: Using human signals to convince and persuade

The art of the business plan pitch could fill volumes of b-school literature. But what if the real secret sauce had less to do with content and everything to do with delivery?

honest-signalsAlex ‘Sandy’ Pentland, Director of MIT’s Human Dynamics Laboratory and the MIT Media Lab Entrepreneurship Program, has conducted research around the power of unconscious forms of communication. The tools have revealed subtle patterns in how people interact, enabling Pentland and his colleagues to predict outcomes of situations ranging from job interviews to first dates to pitches for funding.

Pentland conducted a study of business plan pitches, during which “rising-star” business executives gave their presentations to venture capitalists, while Pentland and Felix Heibeck, Research Assistant at the MIT Media Lab, watched. “The skills the executives required—the ability to clearly formulate ideas, effectively communicate to a group of peers and then persuade others to pursue those ideas—are indispensable in business as well as everyday life,” said Pentland.

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Heeding contagion—preventing another economic crisis

The U.S. is unflinching in its optimism and ability to move forward after a crisis, such as the 2008 recession. And yet the drawback to this reflex is the ability to quickly forget what landed us in the situation to begin with. As our economy recovers, we potentially risk a growing complacency and inadequate financial oversight.

Just months ago, the country of Cyprus made global headlines as their banks’ ballooning assets grew far beyond what the country could support. Losing over 4.5 billion euros, the Cyprian banks tried to repair the damage by confiscating secure deposits, affecting the assets and the trust of investors throughout Europe and Russia and causing a ripple effect of investment withdrawals. The contagious effects of this crisis are a warning of how interconnected we are, and how one failed system could halt economic recovery elsewhere.

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Mobile money on the rise

While the developed world continues trudging through a slow economic recovery, parts of the developing world’s economy are being rapidly transformed by a new form of disruptive technology: mobile money.

Mobile money—a cash management service available on mobile phones or the internet—is having more than a moment; it’s making a profound impact, powerful enough to shift economies across country borders. Studying the impact of mobile money in its most successful beta launch to date in Kenya can teach us a lot about the impact and adoption of disruptive innovations within a country and beyond its borders.

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The new competitive advantage: not leaning in, but leaning forward

Microsoft recently announced a significant restructuring in hopes of reclaiming its lost market share and the trust of its customers. In response, many are asking, “Is restructuring the answer? What changes will Microsoft need to make to regain its competitive edge?”

The Lean Forward Approach

According to Steven Spear, Senior Lecturer at MIT Sloan and recognized expert on high velocity organizations, the most successful organizations are the ones creating high value with their products, in less time, using less effort. These organizations, says Spear, use the lean forward approach: they consistently seek immediate clarification and amplification of their customer’s voice by leaning into their users’ domain to discover the problems as well as delights of their experience.

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