The Five Bestselling MIT SMR Articles of 2019

This year’s bestselling articles highlight new research on perennial challenges for managers and organizations.

This year’s bestselling articles examine perennial challenges for leaders and organizations. From predicting how technology will affect markets and outcomes to creating frameworks for strategic decision-making, this collection of articles provides managers with practical insights for leading in an age of uncertainty and disruption.

1. The Magic That Makes Customer Experiences Stick

Stefan Thomke

Research has shown that memorable experiences can drive customer decisions as much as price and functionality. Despite the insights gleaned about customers through advanced technologies and data analysis, something still seems to be missing for most companies.

That missing ingredient is emotion. Years ago, when the author first asked his executive education students for their most memorable experiences as customers, he was surprised by the language they chose: Made me feel special. Really cared. Trusted me. Surprised us. These executives weren’t using the standard language of business. Instead, they were describing emotional impact.

The rational approaches taught at most business schools — offer customers more value for their money, add features, make service more efficient — are not enough. Creating memorable experiences for customers also requires a bit of emotional magic.

2. Learning to Love the AI Bubble

Philipp Gerbert and Michael Spira

All bubbles are different. Bubbles occur when the market value of assets decouples from their intrinsic value, and expectations of rising valuations generate investor demand. Many ambitious infrastructure projects that produced canals, railways, and telecom networks were fueled by bubbles. With investments in artificial intelligence rising rapidly, especially in China and the United States, two questions arise: Are we heading toward an AI bubble? And if so, how bad would it be if the bubble were to burst?

Having studied AI intensely over the course of two years, the authors look to answer these questions, finding that first, yes, today’s fascination with all things AI has most of the trappings of a financial bubble. But unlike the housing bubble, the effects of a bursting AI bubble wouldn’t cause great harm.

3. What to Do When Industry Disruption Threatens Your Career

Boris Groysberg, Whitney Johnson, and Eric Lin

Volatility in an industry should concern not only the companies within it but also the people who work for them. To stay ahead of developments that may disrupt your professional life, you must make two evidence-based diagnoses: How volatile is your industry? And what explains the volatility?

Understanding how employability is affected by broader trends in industry volatility, such as the preservation of accumulated experience alongside the acquisition of new skills, has become part of managing a career. In this article, the authors discuss how to diagnose the risks your career faces from disruptive industry forces — and offer advice on how to mitigate the threats.

4. A Structured Approach to Strategic Decisions

Daniel Kahneman, Dan Lovallo, and Olivier Sibony

Making strategic decisions — whether you’re considering an acquisition, figuring out whether to launch a new product, or choosing a startup to fund — involves boiling down a large amount of complex information so you can rate competing options or arrive at a yes-no call on a single path. All those strategic decisions are evaluative judgments, and to make such tough calls, people must boil down large amounts of complex information to choose a specific path.

Such work is prone to common errors, but a disciplined, sequential approach can mitigate those errors and improve the quality of both one-off and recurrent decisions in an array of business domains. The process described in this article is easy to learn, involves little additional work, and (within limits) leaves room for intuition.

5. Beat the Odds in M&A Turnarounds

Martin Reeves, Lars Faeste, Daniel Friedman, and Hen Lotan

Companies face a seemingly endless stream of disruptions from new technology, emerging competitors, shifts in consumer behavior, regulatory changes, slowing economic growth, and other threats, any of which can hurt performance and require substantial and prompt changes in operations and strategy. As long-term growth rates trend downward in many economies, business leaders are turning to acquisitions to fuel growth.

While M&A deals and turnarounds are individually hard to pull off, combining the two can be even more challenging. Yet an analysis of roughly 1,4000 M&A-based turnarounds between 2005 and 2018 shows that six management actions can help acquiring companies improve their odds of success. The rewards can be considerable. Successful buyers generate gains in both revenue growth and profit margins, and — most important — better returns.