MIT Sloan Management Review Winter 2015

Martha E. Mangelsdorf, editorial director MIT Sloan Management Review “Most executives aren’t nearly as smart, perceptive or customer-centric as they believe.” So argues Michael Schrage, a research fellow at the MIT Center for Digital Business, in his essay “Embrace Your Ignorance” in this issue of MIT Sloan Management Review. He notes that some managers who conduct inexpensive business experiments and testing via the Web have learned that, more often than not, their predictions about what customers want turn out to be wrong. Schrage thus encourages executives to be open to experimentation and to making decisions based on the results of experiments, rather than acting on their own limited insights and preconceptions. Schrage isn’t the only author in this issue of MIT Sloan Management Review to point out the limits of human cognition…

As the number of social media users continues to climb, many companies are looking beyond simply establishing a social presence — and are seeking to “get social media marketing right.” The prospect of free, yet effective viral marketing recommendations from consumer to consumer is very appealing — but often elusive. Through an analysis of the success of 751 social media marketing campaigns involving Facebook apps, we investigated the social sharing mechanisms that encourage consumers to share information about a product with their friends. What we found is that there is no easy, one-size-fits-all solution for social media marketing. Instead, companies must tailor their social media marketing strategies to fit their products. In particular, useful products benefit from different social media marketing approaches than do fun products such as games. On social media…

Image courtesy of Flickr user Aimee & Paul Bogush. For two decades, business leaders have argued that corporations could promote sustainability effectively by pursuing win-win profit opportunities. But during that time, the health of the natural environment has worsened. In response, top managers in some leading companies have been pioneering a different approach to sustainability, one that radically alters businesses’ traditional economic role. It treats businesses as not simply players in a competition structured by governmental and societal rules; instead, they are rule makers. DuPont’s response to warnings that chlorofluorocarbons (CFCs) caused major damage to the ozone layer that shields the planet from harmful UV rays provides an early example of this approach. Given that DuPont was the leading producer of these chemicals, DuPont managers were understandably concerned about how regulation would…

Advances in mobile communication and geo-positioning technologies in recent years have presented marketers with a new media channel: location-targeted mobile advertising. Location-targeted mobile advertising involves the provision of ad messages to cellular subscribers based on their geographic locations; this allows marketers to deliver ads and coupons that are customized to an individual’s tastes and geographic location and the time of day. Although location-targeted mobile advertising seemingly offers businesses tremendous potential given the ubiquity of mobile devices, there has been little empirical evidence about the immediate and cumulative effectiveness of such advertising. Our research was designed to address this gap. In our study, we obtained data from one of the world’s largest mobile service companies. This Asian mobile service company (which wishes to stay anonymous) has partnerships with cinemas and sells movie tickets…

In the far-flung subsidiaries of global corporations, getting attention from headquarters can often be an asset. Country managers in neglected outposts often envy their counterparts in “hot markets,” who seem to be able to attract all the high-level support, interest and resources they need. However, such attention from headquarters can have a downside as well, sometimes triggering a dynamic that hampers performance. The pervasiveness of these negative forces became apparent during an international workshop we ran for managers of foreign subsidiaries on how to manage the attention of headquarters staff. Although we expected to hear dissatisfaction from managers of neglected subsidiaries, we were surprised at the level of frustration voiced by managers of subsidiaries on which plenty of attention had been lavished. This discovery suggested that, even with the best of…

What do PepsiCo CEO Indra Nooyi, Virgin Group founder Sir Richard Branson and Martha Stewart have in common? They don’t need much sleep; it has been publicly reported that each regularly gets only six hours of sleep or less per night. By discussing their ability to get by with little sleep, these executives are serving as role models for a norm that a full night’s sleep is optional, even a luxury, if you want to get ahead in business. We believe that in this regard, these executives are not setting a good example, especially when it comes to getting the best performance out of the talent in an organization. Generally speaking, managers assume that simply getting the right talent in their organizations will lead to high levels of productivity. But this…