MIT Sloan Executive Education innovation@work Blog

Category: Digital Transformation and Emerging Technologies

The need for speed: Steve Spear on why faster is better for business, and for the Navy

Posted by MIT Sloan Executive Education - 7 days ago

Steve Spear is helping the Navy create high-velocity learning

There’s been tremendous encouragement for creativity and innovation as critical elements for success—rightly so. Bringing new forms of value to market creates the chance to reap rewards for providing better solutions to problems, some of which customers may not have even been able to articulate. Less well articulated is the essence of speed in capturing the benefits of new, novel, innovative, and creative.There’s been tremendous encouragement for creativity and innovation as critical elements for success—rightly so. Bringing new forms of value to market creates the chance to reap rewards for providing better solutions to problems, some of which customers may not have even been able to articulate. Less well articulated is the essence of speed in capturing the benefits of new, novel, innovative, and creative.

“Talking about speed is not part of the traditional managerial conversation,” says MIT Sloan Senior Lecturer Steve Spear, an expert on sustainable competitive advantage and author of The High Velocity Edge. “The convention is far more static, focusing on ‘position,’ sustainable, preferential access to suppliers, and customers that are somehow enduringly unassailable. But in a world wired for near instantaneous flow of data, money, and transactions, and with material and people able to float or fly from anywhere to anywhere in hours or days, the ecosystem is tumultuous. Nothing is static. If you slow down, the world goes by.”

Creating competitive advantage through the speed of broad based relentless discovery

Despite the fact that for every incumbent there are always intruders and for every ‘position,’ there are always assailants, some organizations nevertheless stay ahead across multiple measures—quality, cost, variety, novelty—whatever factors are appreciated in their markets, collecting outsize rewards for doing so. “For Apple, for example, being out in front with new features, form factors, functionality, and connectivity means selling 1/5th the world’s smart phones but collecting 90+% of the segments profits,” says Spear. “For Intel, it’s singular relentlessness in adhering to Moore’s Law—the exponential growing of microprocessor speed— means it dominates with 80-90% market share each successive generation of computing technology. And for pharmaceutical companies, each month earlier to market is an additional $50 million in patent protected revenue.”

In his executive education program, Creating High Velocity Organizations, Spear shows how exceptional organizations create unmatchable speed and agility to out maneuver their rivals when powered by an unmatched discovery dynamic. This means realizing what to do and how to do it far faster and better and hence sustaining a relevance others cannot meet.

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5 reasons large-scale transformation efforts fail—and what to do about it

Posted by MIT Sloan Executive Education - 10 days ago

MIT Sloan's Douglas Ready on Transformation

Douglas Ready knows a lot about leadership. The MIT Sloan Senior Lecturer is considered one of the world’s leading authorities on strategic talent management and executive development and has been named multiple times to Thinkers50, the premier ranking of the world’s top thought leaders. Ready, who is also Founder and CEO of the International Consortium for Executive Development Research, is a prolific writer on enterprise leadership and implementing strategic and cultural change; his articles have set the agenda for talent, leadership, and strategic change over the last two decades. And he is an active advisor to CEOs and top executive teams around the world.

So, when Ready shares strategic insights, people listen. Much of his writings and teachings of late are focused on implementing enterprise-wide transformation, because research is proving that the majority of these efforts fail to reach their intended objectives. Why is that?

According to Ready, when challenges to transformation persist it is often because there are embedded tensions or paradoxes that surface that seem unresolvable. Ready calls out five embedded tensions that make the successful implementation of enterprise transformations persistently difficult.

1. Revitalization vs. Normalization: At the core of many transformation efforts is the desire to revitalize ways of thinking, behaving, and working. Unfortunately, change often snowballs into multiple change initiatives, and seldom are these initiatives coordinated or provided with sufficient context. Employees can easily become weary of change and yearn for some level of normalcy.

2. Globalization vs. Simplification: The complexities brought on by globalization are often in conflict with an organization’s need to make it simple for customers to do business with them.
Leaders struggle with creating organizational responses that address the need to master globalization while offering customers and employees optimal simplification at the same time.

3. Innovation vs. Regulation: Innovation is what stimulates the creation of new business models, products, services, and ways of working. And yet, so many organizations are struggling to operate in an increasingly crushing regulatory environment (particularly in the aftermath of the global financial crisis). Pursuing creative approaches to solving unmet customers’ needs can feel like a luxury to these companies.

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4Dx unlocks new dimensions in virtual learning

Posted by MIT Sloan Executive Education - 13 days ago

Pricing 4Dx with Catherine Tucker

Contributed by Paul McDonagh-Smith, Digital Capability Leader, MIT Sloan, Office of Executive Education. With a focus on driving digital transformation and harnessing emerging technologies, Paul works with the team to create learning programs to fit how we live and work in today's digital age.

As we know from video games and fun VR experiences, the appeal of having an avatar or a “virtual self” lies in the infinitely expanded possibilities that suddenly become reality (albeit virtually). Avatars can do more in a virtual world than our bodies can in the physical one. Turns out, the same is true for education. Given the right environment, you can actually learn better—and tackle more complex material—as an avatar in a virtual classroom than you might in a more traditional setting.

For a few years now, we’ve been experimenting with virtual learning to make our programs more accessible to more participants around the world. We’ve been testing different platforms and approaches and learning a lot along the way. That’s why our most recent exploration deserves special recognition—for it may just offer the right mix of online and in-person classroom experience designed for learning complex—even technical—material in this highly effective format we call 4Dx.

What makes the latest evolution different from our previous offerings is the carefully calibrated combination of instructional design and content delivery methods built specifically for the virtual learning environment. The result is a deeply immersive educational experience that surpasses what’s possible in a physical classroom—a post-digital experience, if you will.

The program we are currently offering in this format is called Pricing 4Dx, taught by Dr. Catherine Tucker, Sloan Distinguished Professor of Management and Professor of Marketing MIT Sloan School of Management. The material is geared toward executives in marketing, product development, and strategy who are in charge of launching new products and need to know how to build an effective pricing strategy. In other words, the course can get technical rather quickly and requires the use of spreadsheets and data analysis in the online environment.

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Go digital or go home, and other thoughts from CISCO’s John Chambers

Posted by MIT Sloan Executive Education - 20 days ago

Go digital or go home, and other thoughts from CISCO’s John Chambers

John Chambers knows a thing or two about disruption and upheaval. As former CEO of Cisco Systems from 1995 to 2015, he led the company during tumultuous times—including the market drop in 2002 when the company lost more than $450 billion, as well as Cisco’s less than successful acquisition of the Flip video camera line in 2009. Yet Chambers, now Executive Chairman of the Board at Cisco Systems, maintains there is no success without disruption, particularly when it comes to the digitization of the world around us. In essence, go digital or go home.

“The world will go digital: It will transform health care, enable people to live longer, and be a huge disruption to society. Either you disrupt or you get left behind,” said Chambers in a campus talk as part of the MIT Sloan 2017 iLead series. Chamber cautions further that the U.S. could lose some of its economic power if it doesn’t beef up its digitization plan. “There’s no entitlement just because we led before.”

Recent research by McKinsey & Co. concurs, reporting that while 90% of companies say they are engaged in some form of digitization, only 16% say they are taking a bold stance. The study also shows that the window of opportunity to put the right digital strategy in place is still open, but not for long.

Hear more insights from Chambers in this recording of his talk with Hal Gregersen, MIT Sloan Senior Lecturer and Executive Director of the MIT Leadership Center.

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3 common pricing pitfalls—and how to avoid them

Posted by MIT Sloan Executive Education - 22 days ago

Pricing strategy at MIT Sloan

Setting the right price for a product or service is not easy. Pricing decisions can have a significant and often immediate effect on an organization's bottom line, yet there is much confusion about—and often scant attention paid to—pricing strategy within organizations.

Here are three pricing pitfalls that commonly ensnare businesses and startups—and ways to avoid them:

Taxi-Meter Pricing

Businesses are naturally attracted to the taxi-meter like pricing scheme, which charges customers for their use of their product or service by minute, transaction, gigabyte, etc.

“My students are always drawn to the idea of ‘simple’ and ‘transparent’ pricing schemes,” writes MIT Sloan Professor Catherine Tucker in Slate. “In theory, a simple, per-megabyte price can reassure customers who are hesitant to try your product or service.” She warns her students, often budding entrepreneurs, to take the “taxi-meter effect” into account.

“The taxi-meter effect is the feeling of discomfort you get when you’re seeing that meter go up. Even if you’re not the one who’s paying the tab,” she explains in this short video. “When we have a meter-like pricing format, we’re instilling the same feeling in our customers, putting them in a frame of mind to be thinking, ‘should I consume that extra minute?’”

Studies have shown that consumers prefer a flat rate—even when it’s not in their best interest. Turns out that this flat-rate bias is not solely economic in nature. “Consumers actively avoid schemes where there is the possibility of feeling discomfort by mentally linking every extra unit of consumption to an increase in price.” Tucker encourages entrepreneurs to offer customers an option, once they’re comfortable with the service, to purchase 200 gigabytes, for example, or two hours of time, and get rid of the meter.

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Fashion statements apropos of MIT

Posted by MIT Sloan Executive Education - 1 month and 28 days ago

© 2012 Tangible Media Group / MIT Media Lab / Photo by Hannah Cole

The latest fashion trends can be found in couture magazines and the runway at Bryant Park, but did you know that you can also spot the latest innovations in fashion here at MIT?

In fact, MIT has a long history at the intersection of high fashion, high tech, and innovation—from our pioneering efforts in textile programing, adaptive clothing for people with disabilities, wearable computing, new biologic fabric that literally breathes, and the many successful ventures spun out of our Martin Trust Center for Entrepreneurship.

A surge of startups

For years, fashion-minded MIT students and alumni have been creating companies targeting niche consumer styles and voids in the retail industry. These companies include everything from traditional ventures in textiles and garments to tools that enhance the online shopping experience to completely reinventing the stiletto.

  • Ministry of Supply, co-founded by a group of MIT Sloan students and an MIT engineering alumnus, uses thermal analysis, robotic engineering, and advanced materials to design better-fitting men’s business attire. The company has developed a rapidly growing science-based clothing line and the industry’s first 3-D robotic knitting machine.
  • AHAlife is a curated online marketplace of thousands of luxury fashion items and other high-end products. AHAlife re-creates the in-store experience of discovery while shopping online by featuring quality, well-crafted products with a story.
  • Sundar, a global mobile search engine startup for sourcing materials and suppliers, was incubated at MIT and founded by MIT Sloan alumnus Jag Gill. “Our mission is to streamline the discovery and sourcing process by providing sophisticated search, curation, and data-driven insights on what to purchase, produce, and stock to buyers and sellers 24/7,” said Gill in this Forbes feature.

A minisurge of MIT start-ups like these in recent years is driven by a budding category of fashion industry entrepreneurs. “About two years ago, we thought these companies were outliers,” said Bill Aulet, Managing Director of the Martin Trust Center for MIT Entrepreneurship, in this Boston Globe article. “Now the pace has definitely picked up.”

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Why enterprises should care about blockchain

Posted by MIT Sloan Executive Education - 2 months ago

Why businesses should care about blockchain

Blockchain technology is hard to understand and even harder to predict. But given the promise of blockchain and its golden child, Bitcoin, you’d be wise to start making sense of it now. For the uninitiated, this recent article from the MIT Sloan Newsroom sheds helpful light on these intertwined terms. We’ve also blogged about crypotechnology previously, in posts related to Bitcoin’s role in digital strategy and its meteoric rise in value in 2016.

The MIT Media Lab's Digital Currency Initiative describes blockchain as a decentralized public ledger of debits and credits that no one person or company owns or controls; its users control it directly. This system lets people transfer money without a bank, for example, or write simple, enforceable contracts without a lawyer.

“Blockchain technology is particularly useful when you combine a distributed ledger together with a cryptotoken (as in Bitcoin),” explains MIT Sloan Assistant Professor Christian Catalini. “Suddenly you can bootstrap an entire network that can achieve internet-level consensus about the state and authenticity of a block’s contents in a decentralized way … This is one step away from a distributed marketplace, and will enable new types of digital platforms.”

Blockchain and business

Blockchain and cryptocurrencies have enormous potential impact on global enterprises.

When Bitcoin was introduced in 2008, the Internet saw the effects of a drastic reduction in the cost of verification and the cost of networking. “For the first time in history, value could be reliably transferred between two distant, untrusting parties without the need of a costly intermediary,” writes Catalini in a research paper on the economics of blockchain.

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MIT’s Charles Fine envisions the future of urban mobility

Posted by MIT Sloan Executive Education - 2 months and 4 days ago

Faster Smarter Greener by MIT's Charles Fine

We’ve had a century-long love affair with the car and, for the most part, it’s been a great ride. But our relationship with automobiles is changing.

In the U.S., recent studies suggest that Americans are buying fewer cars, driving less, and getting fewer licenses with each passing year. People are more attached to their smartphones than their cars; millennials in particular value cars and car ownership much less than they value technology. Combine this disenchantment with the fact that, in many cities around the world, cars are not always the quickest mode of travel. And, of course, emissions from the rapidly growing number of cars threaten the planet. It makes one wonder: is our global love affair with vehicles cooling?

We recently spoke with MIT Professor Charles Fine about his new book, slated to hit the stands in September: Faster, Smarter, Greener: The Future of the Car and Urban Mobility. Fine teaches operations strategy and supply chain management in MIT's Communications Futures Program, and he is Faculty Director of the MIT Sloan Executive Education program, Driving Strategic Innovation: Achieving High Performance Throughout the Value Chain. His research focuses on supply chain strategy and value chain roadmapping, with an emphasis on fast clockspeed manufacturing industries. Fine's work has supported the design and improvement of supply chain relationships for companies in electronics, automotive, aerospace, communications, and consumer products.

Faster, Smarter, Greener brings Fine’s research into the future, envisioning a new world of urban mobility that is connected, heterogeneous, intelligent, and personalized—what Fine and his coauthors Venkat Sumantran and David Gonsalvez refer to as the CHIP architecture. This architecture embodies an integrated, multimode mobility system that builds on ubiquitous connectivity, electrified and autonomous vehicles, and an open, entrepreneurial marketplace.

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