MIT Sloan Management Review Summer 2015

We live in a time of rapid technology-driven change. One of the questions this raises for business executives is: What about our business needs to be revamped — and what should remain constant?1 As we were producing this issue of MIT Sloan Management Review, that question seemed especially relevant. Two articles in this issue — “Thriving in an Increasingly Digital Ecosystem” by Peter Weill and Stephanie L. Woerner and “Is Your Business Ready for a Digital Future?” by Gerald C. Kane, Doug Palmer, Anh Nguyen Phillips and David Kiron — directly address the topic of business changes driven by digital technologies. A third article, “How Twitter Users Can Generate Better Ideas,” by Salvatore Parise, Eoin Whelan and Steve Todd, reports on fascinating research about how a digital platform — in this…

Image courtesy of Flickr user Fagor Automation Corporate Social Responsibility (CSR) isn’t a piece of cake. It is fraught with contradictions, subject to political challenges and demands deep commitment. So let’s stop sugarcoating it. Relying on the familiar clichés — “doing well by doing good,” finding “win-win solutions” and being a “good corporate citizen” — accomplishes little in the bigger scheme of things. In fact, these platitudes sometimes encourage corporate social irresponsibility. In nutrition, eating cake can leave you unsatisfied after the sugar hit has worn off. Although we don’t want readers to finish this article feeling unsatisfied, we also don’t want people to think there’s a simple recipe for responsible corporate behavior. We begin by critiquing four common recipes for CSR. We call them “let them eat cake,” “icing on the…

Image courtesy of MediaTek As business becomes increasingly global and technology-driven, companies everywhere are facing pressures to be on the cutting edge. Innovation and intellectual property (IP) — long vital for traditional multinational corporations — are now just as important to the strategy of growing companies in dynamic, fast-changing markets in China, India, the Middle East, Africa and elsewhere. In this context, most forward-thinking companies recognize the need to forge partnerships to grow and gain access to new technologies, capabilities and markets. Although partnerships between mature multinational companies and growing companies can be challenging, they can also be mutually beneficial. Multinationals can gain market access and technology, while growing companies can leapfrog their competition and gain a foothold on the global stage. Sadly, the reality is that would-be partners frequently talk past each…

Many companies compete in multiple product or customer categories, each of which requires a distinct supply chain capability. Such companies are challenged to develop capabilities in both cost leadership and product or service differentiation — a tall order, given that the ability to compete in different strategic segments at the same time requires precise coordination of the sales side of the company with supply chain operations. This is especially tricky given the fact that in many organizations, the two sides are completely disconnected, a perennial problem that management thinker Peter Drucker considered one of the “great divides” in management. The divide between demand and supply is a key reason that companies are so often trapped into selling excess products well below market rates or losing sales because an inventory shortage…

©iStock.com/franckreporter Innovations never happen without good ideas. But what prompts people to come up with their best ideas? It’s hard to beat old-fashioned, face-to-face networking. Even Steve Jobs, renowned for his digital evangelism, recognized the importance of social interaction in achieving innovation. In his role as CEO of Pixar Animation Studios (a role he held in addition to being a cofounder and CEO of Apple Inc.), Jobs instructed the architect of Pixar’s new headquarters to design physical space that encouraged staff to get out of their offices and mingle, particularly with those with whom they normally wouldn’t interact. Jobs believed that serendipitous exchanges fueled innovation.1 A multitude of empirical studies confirm what Jobs intuitively knew.2 The more diverse a person’s social network, the more likely that person is to be innovative. A…

Image courtesy of BBVA. The business world is rapidly digitizing, breaking down industry barriers and creating new opportunities while destroying long-successful business models. We call this process digital disruption, and although sweeping technology-enabled change often takes longer than we expect, history shows that the impact of such change can be greater than we ever imagined. Think steam engines, cars, airplanes, TVs, telephones and, most recently, mobile phones and e-books. With e-books, the market has been slow to develop. Traditionalists said you wouldn’t be able to replace the experience of a paper book. But e-books are gaining traction — they are cheaper than paper books, faster to acquire and searchable. Although the margins on them are thinner than the margins on traditional books, the market is growing. In 2014, 28% of American…