MIT Sloan Management Review Spring 2016

What if you invested extensively in improving the performance of your product — only to realize that some potential customers don’t notice or care? In his article “ Duncan Simester, the NTU Professor of Management Science at the MIT Sloan School of Management, illustrates that potential business pitfall with an anecdote about a friend of his who didn’t know much about bicycles — and whose main criterion for purchasing one was that it be red. “Think for a moment about the implications of this example for a bike manufacturer,” Simester writes. “Technical innovation would not increase the chances of a sale to this customer, no matter how much value the innovations created. More generally, the risk for companies is that they invest in innovations that customers cannot recognize.” The solution, argues,…

The ability to innovate and rapidly respond to changes in the business environment is critical to competitiveness and success. Creativity and problem-solving skills are key elements of improving the outcomes in projects that require innovation. Iterative development, improvisation, and experimentation combined with focus and flexibility are needed to identify new business opportunities and effectively execute projects. But business demands also require efficiency, and many organizations pursue disciplined project management and product development practices that emphasize standardization and consistency to help drive down costs. Is a disciplined approach to product development at odds with creativity and improvisation? Can managers develop skills around building improvisation and creativity, especially for innovative projects? If so, what are the right conditions for improvisation to flourish? In this article, we discuss findings from our study on improvisation…

These days, when almost every website offers social features, a burning question is: What is the business value of users’ “likes” and “shares?” Past attempts at finding the answer have touched on the idea of user engagement, suggesting that users who are more socially active on a site continue to browse and explore it for longer periods of time, contribute more content, and communicate more about the website with others, potentially attracting new users. Our research in the last five years hints at a more concrete relationship between user engagement and website profitability: Social activity on a website can increase users’ commitment to the site and willingness to pay for its services. Our work suggests that social engagement could actually be used to solve the conversion challenge that so many content…

Crowdfunding is changing how entrepreneurs bring new products to market. It has allowed thousands of innovating entrepreneurs to raise money, build brand awareness, and join a broader conversation with large numbers of potential backers, all while still in the product development process. Examples of crowdfunded products include the Glif, whose creators raised more than $137,000 for the device, which allows smartphone users to prop their phones up at an angle or attach them to tripods, and the Oculus Rift, a virtual-reality gaming headset that raised $2.4 million via crowdfunding. Oculus VR was later acquired by Facebook Inc. for $2 billion. We set out to better understand how crowdfunding affects innovation. To do this, we followed up with organizations that had developed products through funded Kickstarter campaigns (in other words, campaigns exceeding…

Reconnecting with long-lost or dormant contacts can be very valuable — both professionally and personally. But choosing from among hundreds of former contacts can be challenging. We find that executives, when left to their own devices, don’t take full advantage of their opportunities to reconnect. And when they do reconnect, they tend to focus on comfort and not on re-connections that might offer the best advice. As the nature of work and professional life becomes more varied, people accumulate an ever-increasing number of former colleagues and contacts. Although the Internet and social media have made it fairly easy for people to maintain their relationships, most managers find it impossible to stay in active communication with everybody. Inevitably, they lose touch with many of their former contacts. When these previously valuable relationships…

If popular culture is an accurate gauge of what’s on the public’s mind, it seems everyone has suddenly awakened to the threat of smart machines. Several recent films have featured robots with scary abilities to outthink and manipulate humans. In the economics literature, too, there has been a surge of concern about the potential for soaring unemployment as software becomes increasingly capable of decision making. Yet managers we talk to don’t expect to see machines displacing knowledge workers anytime soon — they expect computing technology to augment rather than replace the work of humans. In the face of a sprawling and fast-evolving set of opportunities, their challenge is figuring out what forms the augmentation should take. Given the kinds of work managers oversee, what cognitive technologies should they be applying…