MIT Sloan Management Review Spring 2017

“Is it the shoes?” That’s the question director Spike Lee ponders in a classic series of Nike Air Jordan commercials in the late 1980s and early 1990s in which Lee, playing the fictional Mars Blackmon, considers the mysteries behind the gravity-defying greatness of basketball player Michael Jordan. And thus Lee points to one of the most persistent, frustrating, and important questions a manager faces: “Is it the person, the tools, or the process?” Sadly, we are usually asking the question in the negative: Is this thing that went wrong the person’s fault, the tool’s fault, or the process’s fault? Or, more likely, how much of it was the person versus the tool versus the process? Humans are difficult that way. It’s hard enough to understand what makes one of us tick when we are…

How quickly should employees respond to emails? In most workplaces the answer is “right away.” But scientific research is starting to suggest that managers need to recognize the effect that being “always on” has on employee stress and overall efficiency. More than a decade after the smartphone’s introduction, researchers have been tracking and analyzing its impact — and that of its addictive technological relatives, email and social media — on our brains. In their book The Distracted Mind: Ancient Brains in a High-Tech World (The MIT Press, 2016), neuroscientist Adam Gazzaley and psychologist Larry D. Rosen reveal what happens in our brains when we get interrupted or self-distract and how that affects us behaviorally and psychologically. The book explains how internet-connected devices and expectations for immediate responses to communications degrade our…

The possession of rich amounts of data is hardly unique in today’s world. Indeed, data itself is increasingly a commodity. But the ability to monetize data effectively — and not simply hoard it — can be a source of competitive advantage in the digital economy. Companies can take three approaches to monetizing their data: (1) improving internal business processes and decisions, (2) wrapping information around core products and services, and (3) selling information offerings to new and existing markets. These approaches differ significantly in the types of capabilities and commitments they require, but each represents an important opportunity for a company to distinguish itself in the marketplace. Theoretically, companies can pursue more than one approach to data monetization at the same time. In practice, adopting each approach requires management commitment to specific…

In 2010, a small group of managers at the automaker Volvo Car Corp. assembled to craft a vision for the future involving wirelessly connected cars. They recognized that the company needed to renew its innovation capability to compete more effectively in an increasingly digital environment. Doing so, of course, was easier said than done. One problem was that many managers didn’t see a need to innovate digitally. Volvo Cars was a car manufacturer, after all, and not a digital business. Others saw the need to engage in digital innovation, but they couldn’t get their head around how to do so. How could they convince their colleagues, when they didn’t necessarily have a clear vision of what the innovation outcome would be and the process itself appeared to be ambiguous? At…

In 2016, Microsoft Corp. acquired the online professional network LinkedIn Corp. for $26.2 billion. Why did Microsoft consider LinkedIn to be so valuable? And how much of the price paid was for LinkedIn’s user data — as opposed to its other assets? Globally, LinkedIn had 433 million registered users and approximately 100 million active users per month prior to the acquisition. Simple arithmetic tells us that Microsoft paid about $260 per monthly active user. Did Microsoft pay a reasonable price for the LinkedIn user data? Microsoft must have thought so — and LinkedIn agreed. But the deal generated scrutiny from the rating agency Moody’s Investors Service Inc., which conducted a review of Microsoft’s credit rating after the deal was announced. What can be learned from the Microsoft–LinkedIn transaction about the valuation…

Many boards of directors and senior management teams aspire to the efficiencies, innovation, and competitiveness that digital transformation might deliver. But in my experience, the path to transformation — like most major corporate initiatives — is a risky one. I have spent much of my career overseeing and participating in digital transformations in both government and private sector settings. Specifically, I have served as the director of the Cybernetics Technology Office of the U.S. Defense Advanced Research Projects Agency (DARPA); as CTO and senior VP of Safeguard Scientifics Inc.; and as CTO and senior vice president for technology strategy at Cigna Corp. And I have observed that in the vast majority of cases organizations will make significant mistakes — unless the transformation is well-planned, exquisitely executed, and enthusiastically sponsored by upper…