MIT Sloan Management Review Spring 2022

One of the reasons I joined MIT Sloan Management Review is because it is a publication with a purpose. It stands for something. Now more than ever, that matters. Our purpose flows very naturally from our parent organizations — both MIT and the MIT Sloan School of Management. MIT’s motto is Mens et manus, meaning “mind and hand,” with applied knowledge as the institute’s educational goal. Knowledge and insight are the means to an ambitious end: to “make a better world through education, research, and innovation.” The MIT Sloan School, our mother ship, builds on this by advancing management practice and developing “principled, innovative leaders who improve the world.” While MIT SMR functions as an independent media organization — the Sloan School doesn’t tell us who or what to publish or how…

Joseph Schumpeter was deeply worried about innovation. The renowned economist, who coined the term creative destruction, championed entrepreneurship as the engine of economic growth but feared that small players lacked the key resource needed to implement their pathbreaking ideas: capital. Fortunately, he turned out to be wrong. Since the 1950s, a thriving ecosystem of angel investors and venture capitalists has supplied enough money to startups for their ideas to change the world. But the data age has revived Schumpeter’s concern that innovators could be blocked from accessing the resources they need. As Big Tech becomes ever more powerful thanks to the vast troves of data that the major platforms have collected, and innovation becomes increasingly data-driven, entrepreneurs and enterprises may find it difficult to seize new opportunities. Keeping the engine of…

Few doubt that something extraordinary has happened at Nvidia, as its share price has risen by more than 8,000% over the past decade. It now ranks in the top 10 of the most valuable companies globally, thanks to its transformation from the world’s leading provider of graphic processors to a leader in computing for artificial intelligence and autonomous driving.1 CEO Jensen Huang has confounded the conventional wisdom that established companies cannot reinvent themselves and their industries through radical innovation. Nvidia isn’t an outlier — rather, we see it as one of the more eye-catching examples of the developing trend of large corporations leading radical innovation. Among them is LexisNexis, which became an early leader in big data analytics by creating a multibillion-dollar business that is larger than the original legal information…

It’s been more than 50 years since HAL, the malevolent computer in the movie 2001: A Space Odyssey, first terrified audiences by turning against the astronauts he was supposed to protect. That cinematic moment captures what many of us still fear in AI: that it may gain superhuman powers and subjugate us. But instead of worrying about futuristic sci-fi nightmares, we should instead wake up to an equally alarming scenario that is unfolding before our eyes: We are increasingly, unsuspectingly yet willingly, abdicating our power to make decisions based on our own judgment, including our moral convictions. What we believe is “right” risks becoming no longer a question of ethics but simply what the “correct” result of a mathematical calculation is. Day to day, computers already make many decisions for us,…

The surge of workers leaving their jobs as the COVID-19 pandemic wears on — adding to employers’ talent woes in the midst of an already tight labor market — has drawn predictable responses. Organizations are typically reacting to the Great Resignation with increased pay and flexibility and better, more personalized benefits. But these are short-term solutions to a long-term problem. If the job opportunities your company offers are the same as everyone else’s, and pay and benefits are your only differentiator, then you will continue to churn through workers in an ever-escalating war for talent and an ever-escalating cost structure. What if, instead, you offered better work? Bend the Demand Curve With most organizations focused on addressing the labor supply side of the equation, progressive organizations recognize the opportunity to use today’s fight…

The very idea of transitioning a business to net-zero carbon emissions can be daunting. Revamping processes to reduce emissions will likely take years, and switching to alternative energy sources across a globally distributed business is a complex endeavor. While some initiatives will save money through energy efficiency, others that need to be implemented will be costly — and risky, particularly if they involve bets on new technologies or business models. Without meaningful pressure from regulation or an external carbon price — and most businesses are experiencing neither today — a conventional financial case can be hard to make. It can be tempting, then, for managers to try to delay their organization’s transition to net zero until they have greater certainty — that is, until they use scenario analysis to evaluate the…