Winter 2015
Volume 56, Issue # 2

Access the full Table of Contents below.
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Special Report: Making Better Decisions

Why You Decide the Way You Do

Six scholarly articles offer intriguing insights into factors that can affect the decision-making process.

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From the Editor: In Praise of Humility

The Winter 2015 issue of MIT Sloan Management Review highlights decision making, in “The Power of Asking Pivotal Questions” and “Using Simulated Experience to Make Sense of Big Data.” It also celebrates acknowledging when you don’t have all the answers, in “Embrace Your Ignorance.” Other articles look at “technostress,” why product category labels matter and why “benevolent” mobile apps may be best at brand-building.

Features

Adapting to the Sharing Economy

New strategies are helping companies embrace “collaborative consumption” and the “sharing economy.”

Image courtesey of Quicken Loans Inc.

Embrace Your Ignorance

The overconfidence of presumed expertise is counterproductive. Instead, data trumps intuition.

Intelligence

Customizing Social Media Marketing

There is no one-size-fits-all strategy for social media marketing. Instead, companies need to tailor campaigns to fit their products.

Why Sleep Is a Strategic Resource

Simple as it sounds, regular sleep is the best antidote for a fatigued or stressed-out workforce.

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Adapting to the Sharing Economy

  • Research Highlight
  • Read Time: 19 min 

Instead of buying and owning products, consumers are increasingly interested in leasing and sharing them. New strategies can help companies embrace this “collaborative consumption.” For instance, Ikea and Patagonia have found that helping people resell or give away products both enhances the companies’ reputations and helps customers create space in their homes for new Ikea and Patagonia items. Companies have also found value in embracing opportunities to share existing assets and capacities.

The Dark Side of Information Technology

  • Research Feature
  • Read Time: 26 min 

All of our wonderful mobile devices don’t always make us good at managing what we do with them. Handling information flows can take a toll on employee well-being, with some employees experiencing “technostress” from the pressure to multitask and to respond to Emails quickly. But there are steps executives can take to counter the negative effects of IT use. These steps encourage employees to step back and examine their personal relationships with IT.

Mastering the ‘Name Your Product Category’ Game

  • Research Feature
  • Read Time: 21 min 

When is the best time to enter a new industry? As it turns out, understanding the product category dynamics in an emerging industry and when a dominant category label has been introduced are important to identifying the “window of opportunity” to enter. Dominant category labels typically are introduced right before the industry starts a phase of rapid growth and consolidation. Companies would do well to track category labels before introducing a product in a nascent industry.

Why You Decide the Way You Do

  • Research Feature
  • Read Time: 14 min 

Curiosity about the decision-making process has heated up, attracting academics from neuroscience, management, behavioral economics and psychology. Researchers have found, for instance, that a willingness to ask for advice on difficult problems can increase a person’s perceived competence, and that too many choices can cause people to make less-than-optimal choices. Here, we highlight six scholarly articles that have intriguing insights into the factors that can affect decision-making.

Using Simulated Experience to Make Sense of Big Data

  • Research Feature
  • Read Time: 16 min 

As data analyses get more complex, how can companies best communicate results to ensure that decision makers have a proper grasp of the data’s implications? Research has found that letting decision makers gain experience on the outcomes of different possible actions by interacting with simulations helps those executives make better decisions. Simulations narrow the often a large gap between what analysts want to share and what decision makers understand, and more clearly illustrate complex statistical information.

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The Power of Asking Pivotal Questions

  • Research Feature
  • Read Time: 23 min 

Good strategic thinking and decision making often require a shift in perspective — particularly in environments characterized by significant uncertainty and change. Managers can make better decisions by examining both broad market trends and less visible undercurrents. But the questions leaders pose sometimes get in the way of solving the right problem or seeing more innovative solutions. Here, the authors present six questions that challenge executives to incorporate broader perspectives.

From the Editor: In Praise of Humility

  • Opinion & Analysis
  • Read Time: 2 min 

The Winter 2015 issue of MIT Sloan Management Review highlights decision making, in “The Power of Asking Pivotal Questions” and “Using Simulated Experience to Make Sense of Big Data.” It also celebrates acknowledging when you don’t have all the answers, in “Embrace Your Ignorance.” Other articles look at “technostress,” why product category labels matter and why “benevolent” mobile apps may be best at brand-building.

Image courtesey of Quicken Loans Inc.

Embrace Your Ignorance

  • Opinion & Analysis
  • Read Time: 4 min 

The overconfidence of presumed expertise is counterproductive. Instead, data trumps intuition. Serious innovators take data seriously, argues Michael Schrage: “Organizations may be confident they know their customers, but they’re very likely to be overconfident. Most executives aren’t nearly as smart, perceptive or customer-centric as they believe.” Successful innovators, he writes, “have the courage of their curiosity” and run experiments that challenge their assumptions.

The Perils of Attention From Headquarters

  • Research Highlight
  • Read Time: 11 min 

Visits from corporate headquarters to operations in markets such as China are often seen as overly time-consuming and unproductive. According to one China country manager of a European luxury-goods group, “Not only do they come often, but they want to spend more time, and they all come on weekends! For my team, it means that nearly every weekend, there is somebody to entertain.” The authors offer a set of recommendations for healthier dynamics between corporate headquarters and affiliates.

How Effective Is Location-Targeted Mobile Advertising?

  • Research Highlight
  • Read Time: 3 min 

New research shows that mobile advertising targeted to consumers based on their locations can be effective. This is particularly the case with customers who have shown a high level of interest in the type of product being shown to them. Researchers also think that some users might simply need more time to evaluate the trustworthiness of an app or offer — suggesting that marketers might see delayed responses to location targeted mobile ads.

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Why Sleep Is a Strategic Resource

  • Research Highlight
  • Read Time: 9 min 

Simple as it sounds, regular sleep is the best antidote for a fatigued or stressed-out workforce. But many modern workplaces condone practices that are not conducive to healthy sleep schedules, with leaders setting the expectation that others need to be at the office at all hours of the day and night. The authors argue that managers should “allow employees to separate from work when the workday is finished” and think of sleep as a strategic resource that is a key to human sustainability.

From Risk to Resilience: Learning to Deal With Disruption

  • Research Feature
  • Read Time: 15 min 

In a volatile, global economy, supply chains have become increasingly vulnerable. Supply chain practices designed to keep costs low in a stable business environment can increase risk levels during disruptions. But companies can cultivate resilience to unexpected disruptions by understanding their vulnerabilities and developing specific capabilities to compensate for them. The authors identify and detail 16 capabilities companies can use to respond to particular vulnerability patterns.

Why It Pays to Become a Rule Maker

  • Research Highlight
  • Read Time: 10 min 

Managers in some leading companies have pioneered a new approach to sustainability. In this approach, businesses have the potential to be rule makers as well as players in establishing environmental regulations. “There is an expression in Washington,” says DuPont’s Michael Parr, “that it is better to be at the table than on the menu.” Indeed, by engaging with government on the structure of the phaseout of air conditioning chemicals, DuPont helped bring an end to one profitable product life cycle and spawn another.

The Case for ‘Benevolent’ Mobile Apps

  • Research Feature
  • Read Time: 19 min 

Smartphone apps that provide consumers with helpful information — instead of simply pushing product sales — can improve users’ preference for a company. As well, mobile apps that are about useful information, what the authors call “benevelance,” can significantly impact sales at a low cost and thus improve profitability. “A benevolent app can build trust, which in turn can lead people to consider purchasing your product,” write authors Glen L. Urban and Fareena Sultan.

Can You Really Let Employees Loose on Social Media?

  • Interview
  • Read Time: 15 min 

At Mitel, a $1.2 billion communications technology company, employees tweet about the company and are proactive on LinkedIn with only one rule: “Use your best judgment at all times.” Martyn Etherington, the company’s chief marketing officer and chief of staff, has no problem with that. “We have to enable the majority and not hold them back by implementing catch-all policies that are aimed at a few.”

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Customizing Social Media Marketing

  • Research Highlight
  • Read Time: 7 min 

There is no one-size-fits-all strategy for social media marketing. Instead, companies need to tailor campaigns to fit their products. Recent research suggests that one key question that can guide the approach is whether a company’s products are primarily useful or fun. For instance, consumers expect to encounter messages about fun products on platforms like Facebook. In contrast, they will only glance over recommendations for useful products. Because reactions differ, so too should the social sharing mechanisms used to promote these products.