Strategy

Finding a Lower-Risk Path to High-Impact Innovations

Pursuing a high-impact innovation strategy can have terrific payoffs — but it’s also extremely risky, and most companies won’t do it. Yet a comparatively less risky, proactive approach that strings together “lily pads” of capability-building investments, technical and conceptual advances, and market explorations into “enabling innovations” can bring companies closer to their goal and provide a long-lasting competitive edge.

Are Nonfinancial Metrics Good Leading Indicators of Future Financial Performance?

Although using nonfinancial metrics like customer satisfaction has become increasingly popular in assessing executive performance and determining compensation, the practice has some significant drawbacks. Not all metrics apply equally to all industries. Companies considering such metrics for strategic performance management frameworks should be mindful of the importance of knowing their strength as lead indicators and applying them appropriately.

In Boardrooms, the Same Is a Shame

Corporate boards around the world present a uniformly white, male face — and this is a problem when it comes to how firms approach the global marketplace. When too many people at the top look at the business landscape through the same lens, they are likely to miss both impending problems and potential opportunities. Institutional biases that suppress diversity in the C-suite create a hidden risk factor — one that boards can address by taking a long, hard look in the mirror.

The Lost Art of Thinking in Large Organizations

Making the transition from management to leadership requires managers to exercise skills in strategic thinking — skills they don’t often get to practice in the action-oriented environment they know best. Managers moving into senior leadership must learn to embrace ambiguity and uncertainty and learn the importance of taking time to think things through.

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Do You Know What Really Drives Your Business’s Performance?

Although intuitively appealing, strategy maps and models such as the service profit chain have a common pitfall: They encourage managers to embrace general assumptions about the drivers of financial performance that may not stand up to close scrutiny in their own organizations. A more rigorous analytic approach called performance topology mapping may help managers avoid these assumptions, as well as the strategic mistakes they promote.

How Scenario Planning Influences Strategic Decisions

Anecdotal evidence suggests that considering various scenarios helps strengthen decision making. To test this idea, researchers offered a scenario-based workshop to executives to see how considering scenarios affected decisions. They found that though participants’ confidence in their choices never wavered, the strategic choices they made before the exercise often changed dramatically after viewing the scenarios, with a tendency to become more flexible and focused on long-term value.

The Real Lessons From Kodak’s Decline

Former photography giant Kodak is often cited as having lacked the vision to recognize the effects digital technology would have on its business. The reality of what happened — and the true lessons of Kodak’s experience with digital disruption — highlight the complex challenges posed by fast-moving technological innovation.

Managing Tensions Between New and Existing Business Models

Exploring new business models may be a good way to stay competitive, but doing so can create tensions internally, in areas such as organizational structure and competition for resources. Companies exploring business model innovation may not recognize the inevitability of these tensions and thus be poorly prepared to manage them. But understanding these issues may lessen some of the organizational challenges associated with business model innovation.

Investing For a Sustainable Future

Investors see a strong link between corporate sustainability performance and financial performance — so they’re using sustainability-related data as a rationale for investment decisions like never before.

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How Boards Botch CEO Succession

The strategic importance of CEO succession is indisputable, and the elements of effective succession planning have long been known. So why do many boards plan poorly for CEO succession when the cost of failure is so high? Research finds three key reasons: Hiring criteria are not aligned with strategic needs, boards are reluctant to antagonize the incumbent CEO, and many boards aren’t developing the executives below the CEO and top team.

Digital Health Care: The Patient Will See You Now

  • Interview
  • Read Time: 9 min 

Kristin Darby, CIO of Cancer Treatment Centers of America, is keenly aware of the impact of digital technology on patient care. “We crave constructive disruption, so we are always challenging ourselves with the question, ‘how can technology positively impact our patients?’ If there’s value for the patient, we’re interested and we dig deeper.” Darby is interviewed by Gerald C. (Jerry) Kane, associate professor of information systems at the Carroll School of Management at Boston College and a guest editor for MIT SMR.

Five Steps to Strategic Sustainability and Abundance

Kenyan mobile money pioneer M-Pesa is just one of many companies in developing economies that build virtuous cycles where solving ecological problems and building resilient communities opens new opportunities. Adopting an abundant perspective, argues author Jay Friedlander, provides concrete economic, social, and environmental objectives that unleash new possibilities.

Is It Time to Build Your Own Platform?

If you really want to create value, forget about burning platforms and start building them. A platform, explain professors Geoffrey Parker and Marshall Van Alstyne, and Sangeet Choudary, founder and CEO of Platform Thinking Labs, in Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You, is a “business model that uses technology to connect people, organizations, and resources in an interactive ecosystem.”

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Free Webinar: Foundations of Analytics Strategy

The 2016 MIT SMR/SAS Data and Analytics report, “Beyond the Hype: The Hard Work Behind Analytics Success,” finds that competitive advantage from analytics is declining — but that organizations achieving the greatest benefits have figured out how to ensure that the right data is being captured. In this webinar, the authors of the report explain how companies are making this transition and which are seeing the most success.

Why Learning Is Central to Sustained Innovation

Many managers think they can create better products just by improving the development process or adding new tools. But it’s skilled people, not processes, that create great products. So-called “lean” organizations invest heavily and continuously in the skills of product developers, and rather than developing single products, they think in terms of streams of products. By making people the backbone of the product development system, companies can achieve a triple win: increased innovation, faster time to market, and lower costs.

Debating Disruptive Innovation

Few MIT Sloan Management Review articles garner as much attention as Andrew A. King and Baljir Baatartogtokh’s “How Useful Is the Theory of Disruptive Innovation?” After surveying 79 industry experts, King and Baatartogtokh concluded that many of the cases cited as examples of disruptive innovation by Harvard Business School professor Clayton M. Christensen and his coauthor Michael E. Raynor did not fit four of the theory’s key elements well. Here, three experts provide responses to continue the conversation.

“How Useful Is the Theory of Disruptive Innovation?” was the question raised by an article in the fall 2015 issue of MIT Sloan Management Review. In this issue, several more experts weigh in on the topic.

Beyond the Hype: The Hard Work Behind Analytics Success

The 2016 Data & Analytics Report by MIT Sloan Management Review and SAS finds that analytics is now a mainstream idea, but not a mainstream practice. Few companies have a strategic plan for analytics or are executing a strategy for what they hope to achieve with analytics. Organizations achieving the greatest benefits from analytics ensure the right data is being captured, and blend information and experience in making decisions.

Leading by the Numbers

It can be difficult for finance professionals to transition to broader leadership roles. Leadership development, it turns out, is different for people from finance backgrounds. But five changes in how they approach their job can help them succeed when taking on broader roles in an organization. Those changes include transitioning from being the expert to being someone who leverages expertise, and being able to unleash their thinking to see that a problem can have multiple plausible solutions.

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