MIT Sloan Management Review Summer 2021

agents of change

Several months ago, I went to the office to pick up a few things left behind after shifting to fully remote work last March. The rows of vacant desks were as orderly as an org chart, and the whiteboards still bore traces of strategies planned for a more predictable world. I felt a wave of nostalgia for this serene space, where for eight hours each day the messiness of real life was kept at bay by workplace norms and policies. But this office, now emptied by the pandemic, itself silently testified to the limits of our ability to contain or control forces of change and disruption. Management and leadership have always been about establishing order amid chaos. Within the sphere of the organization, managers set rules, curate culture, and enjoy a…

how organizational change disrupts our sense of self

In a recent workshop, we assembled a group of managers involved in largescale digital transformation initiatives in their various organizations. As part of the discussion, we first asked them how they would describe their roles in those change initiatives. By roles, we didn’t mean job titles — we did not need to know that someone was a chief technology officer or head of HR. As we had already clarified for our participants, we were looking for more archetypal roles, such as “problem solver,” “dealmaker,” “functional expert,” or “idea person.” Next, we asked them to imagine the digital transformation really taking hold and to name roles that would be most valuable in driving that success. And here was the interesting disconnect: For the most part, their answers to the two questions…

how to bring esg into the quarterly earnings call

Quarterly earnings calls need an overhaul. Management expends great effort preparing for them, investor relations officers view them as crucial venues for sharing the equity story — the strategic vision that provides a rationale for investing in the company’s stock — and quarterly results still move markets. So why should these calls emphasize short-term profit-taking over long-term investments in employees, research and development, and sustainability, given that environmental, social, and governance (ESG) issues have direct, material effects on how well companies succeed in the long run? We believe that companies must integrate ESG wholly into their business strategies rather than relegating them to a sidebar. But we also recognize that it’s challenging for corporations to include more ESG information in quarterly earnings calls for a variety of reasons. First, companies are in…

the right way to mix and match your customers

“The costs of demand variability can put you out of business.” That blunt assessment, recently offered to us by the director of sales and operations planning at a Fortune 500 company, reflects what managers already know: Peaks in demand can drive high overtime costs, stockouts, and lost sales, while slowdowns leave capacity idle and increase excess inventory. The impact on customer service levels — not to mention the bottom line — can be significant. But how can companies best manage this variability, especially when deciding which potential new customers to target? Consider a manufacturing company that is expanding its capacity to produce an additional 20 units each month and is pursuing two potential new customers for that increased output. Both prospects have an average demand of 20 units per month, but…

get more ideas from the crowd

The rise of crowdsourcing platforms as a potential source for innovative ideas presents a challenge: How do you attract contributors to work on your particular problem?1 Past research has demonstrated the importance of well-crafted problem statements as a means to attract more innovative solutions.2 But what really goes into a problem statement that engages the crowd? Do the statements that attract a large number of proposed ideas share common elements? Our research sought to answer these questions by unpacking problem statements, word by word, to identify the characteristics that attract the most idea submissions. Our analysis points to guidelines for managers tapping crowdsourcing sites on do’s and don’ts when writing a problem statement meant to attract solutions from creative freelancers. We used data from Eÿeka, an online crowdsourcing platform focused on creative…

the price leaders pay for cutting ethical corners

Unfortunately, it is not uncommon for leaders to ask their employees to cross ethical lines. Consider the following examples from a pilot study we recently conducted: A sales representative at a retail company was asked to grant credit approval to unqualified customers who were friends of her supervisor; a field technician at a communications company was asked by management to close telephone repair tickets for elderly customers whose phones were not fixed; and an engineer in the transportation industry was asked to approve projects that he felt were at risk for structural failure. Examples like these exist in myriad settings. In a global survey of over 13,000 employees, a median of 22% of respondents across sectors reported feeling pressure to compromise standards at work.1 In our recent research, which includes several…