Winter 2019 Issue
Volume 60, Issue # 2

Access the full Table of Contents below.
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Special Report: Innovating for Sales Growth

Grow Faster by Changing Your Innovation Narrative

Grow Faster by Changing Your Innovation Narrative

To bolster innovation, use a growth-affirming innovation narrative supported by four proven levers.

Key Words for Digital Transformation

Key Words for Digital Transformation

Adobe has transformed itself by embracing the technological forces that could have been the harbingers of its demise.

The Promise of Targeted Innovation

The Promise of Targeted Innovation

In the consumer goods industry, small R&D bets often outperform big ones.

From the Editor

Artificial Intelligence Brings Out the Worst and the Best in Us

December 11, 2018 | Lisa Burrell

As AI develops better decision-making skills, leaders may feel threatened and push back, resisting the imperative to leave their biggest and most critical decisions to mechanical minds. And that might be a mistake, says psychologist Daniel Kahneman, given AI’s potential to reduce the bias in human thought processes.

Features

Bill It, Kill It, or Keep It Free?

B2B companies can seize new sales by charging for services they’ve been giving away.

The Truth About Behavioral Change

The true story behind Twitter’s success belies the conventional wisdom of social networks.

A New Playbook for Diversified Companies

Strong multi-business companies are defying expectations in three ways.

Think Critically About the Wisdom of Experts

Leaders and managers should question the expert analyses guiding their decisions in 8 specific ways.

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How Should Companies Talk to Customers Online?

Digital customer service platforms offer better service when they use customer-centric language.

Deriving Value From Conversations About Your Brand

Online and off-line customer conversations about your brand require separate marketing strategies.

Driving Sustainability-Oriented Innovation

Organizations can innovate to address environmental and social problems — but they need to build the right culture.

The Public Sector Can Teach Us a Lot About Digitizing Customer Service

Australian social service agencies are taking the lead in using bots to improve services.

Executive Briefings

An Executive Guide to the Winter 2019 Issue

December 11, 2018 | MIT Sloan Management Review

CEOs discussing business model transformation. Innovation that drives sales. Bots as (actually useful) customer service agents. How to charge for the things you used to give away. These are a few of our favorite things in MIT SMR’s Winter issue.

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Frontiers

Exploring the Digital Future of Management

Columns

The Uncertain Status of Gig Work

The extent to which gig workers should be afforded the legal rights of employees has yet to be fully resolved in many jurisdictions.

Even If AI Can Cure Loneliness — Should It?

Businesses that make and sell products that replicate human connection are serving a deep need, but they may also be changing social norms in ways that can’t be reversed.

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Deriving Value From Conversations About Your Brand

  • Research Feature
  • Read Time: 13 min 

Companies often treat social media as the conversation that represents what consumers are saying about any given brand. But research shows that online and off-line conversations are different beasts. Even though they both drive sales, they need to be measured and managed separately.

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The Public Sector Can Teach Us a Lot About Digitizing Customer Service

  • Research Highlight
  • Read Time: 8 min 

Digital customer service agents (known as virtual assistants, chatbots, or softbots) are typically used to sift through and process only the most straightforward customer inquiries, such as requests for basic information. At most companies, complex issues get passed along to human agents. In that regard, public sector agencies in Australia are ahead of the curve: They are using digital agents to handle complex inquiries from citizens, and businesses stand to learn much from these applications.

Trapped in the Data-Sharing Dilemma

  • Research Highlight
  • Read Time: 6 min 

There are clear benefits for companies allowing website users to login with social media platforms such as Facebook, Twitter, Amazon, and Google. But the ease of user access that social logins make possible comes at a price: The platforms learn a great deal more about users’ buying and searching behavior via these agreements — information that could wind up helping the company’s competitors (including the platform itself) down the line.

The Promise of Targeted Innovation

  • Research Feature
  • Read Time: 15 min 

The biggest consumer goods companies shell out more than $1 billion a year for R&D but lately have seen no appreciable impact on their sales. That’s troubling for companies whose growth has leveled off in recent years. In contrast, some smaller competitors that spend less on R&D — but do so more shrewdly — have seen a significant boost in sales.

Key Words for Digital Transformation

  • Interview
  • Read Time: 11 min 

By many rights, one might have expected to find Adobe on the register of companies disrupted by digital. And yet the 35-year-old software developer has persevered by embracing the very technological forces ― think cloud, mobile, platforms, IoT ― that could have meant its demise. The result? This legacy producer of packaged software designed for the desktop is thriving.

Grow Faster by Changing Your Innovation Narrative

  • Research Feature
  • Read Time: 16 min 

Companies aspiring to organic growth leadership in their industries should start with a coherent, affirming innovation narrative and reinforce it with action. The authors tested 18 well-known innovation levers and identified the four that organic growth leaders use most to stay ahead of competitors: (1) invest in innovation talent, (2) encourage prudent risk-taking, (3) adopt a customer-centric innovation process, and (4) align metrics and recognition with innovation activity.

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Why Teams Should Record Individual Expectations

  • Opinion & Analysis
  • Read Time: 6 min 

To improve decision quality, risk management, and leadership development, organizations and teams should record individual expectations when making big group decisions. That may sound like a tall order, especially for a large organization. But interactive dashboards can make the process of gathering and analyzing everyone’s input much less cumbersome, and the benefits of doing so outweigh the costs.

Driving Sustainability-Oriented Innovation

  • Research Feature
  • Read Time: 12 min 

Faced with mounting challenges and pressure from governments, nongovernmental organizations, investors, and employees to be more aware of the environmental and social impacts of business activities, many companies are attempting to tap into the creativity and entrepreneurial potential of their employees, encouraging them to develop new products, services, or business models that create value for both the company and society.

Think Critically About the Wisdom of Experts

  • Opinion & Analysis
  • Read Time: 11 min 

Leaders and managers must inevitably consult the analysis, advice, and research of people whose expertise exceeds their own in a variety of domains. Getting the most from that perspective means understanding precisely how to question the experts’ wisdom, no matter what form it takes. Eight specific lessons can help leaders and managers use others’ expertise to the greatest possible advantage in everyday business decisions.

Using Artificial Intelligence to Promote Diversity

  • Research Highlight
  • Read Time: 7 min 

What if, instead of perpetuating harmful biases, AI helped us overcome them? What if our systems were taught to ignore data about race, gender, sexual orientation, and other characteristics that aren’t relevant to the decisions at hand? They can do all that — with guidance from the human experts who create, train, and refine them.

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New Ways to Gauge Talent and Potential

  • Opinion & Analysis
  • Read Time: 9 min 

While most organizations still rely on traditional methods such as résumé screenings, job interviews, and psychometric tests to find the right people and match them with the right roles, three new approaches to talent identification are quickly gaining traction. Gamified assessments, digital interviews, and candidate data mining have the potential to make hiring more precise and less biased, as long as they’re used responsibly.

The Hidden Side Effects of Recommendation Systems

  • Research Highlight
  • Read Time: 7 min 

Recommendation engines influence the choices we make every day — what book to read next, which song to download, which person to date. But digital recommendations are also a source of unintended consequences. Research shows that recommendations do more than just reflect consumer preferences — they actually shape them. Given that perfect prediction is not possible, retailers and managers must be aware of the potential discord from unintended side effects of their recommendations.

The Truth About Behavioral Change

  • Research Feature
  • Read Time: 14 min 

In this article drawn from his new book, How Behavior Spreads, UPenn professor Damon Centola explains how the thinking about social networks is changing. Recent research reveals that depending on long-established concepts such as “weak ties” and “long bridges” to drive the adoption of new innovations and organizational change can be a prescription for failure.

A New Playbook for Diversified Companies

  • Research Feature
  • Read Time: 17 min 

Scholars have argued for years that high levels of diversification harm company performance and value creation. But multi-business companies can do quite well. Those that thrive tend to do three things: They limit the number of business models in their portfolio and support them with a cohesive operating model. They tailor the corporate parenting strategy to the needs of individual business units. And they allocate resources according to the role played by each business unit.

Can We Solve AI’s ‘Trust Problem’?

  • Opinion & Analysis
  • Read Time: 5 min 

Many people don’t trust decisions, answers, or recommendations from artificial intelligence. To address that problem, makers of AI applications and systems should stop overpromising, be more transparent about how systems are used, and consider third-party certification.

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Bill It, Kill It, or Keep It Free?

  • Research Feature
  • Read Time: 14 min 

Many B2B companies seek to grow beyond traditional product lines by venturing into new services. Yet they often overlook the opportunity to capture sales from free services they provide. This article outlines the free-to-fee, or F2F, service transition. It shows how to inventory free services (categorizing them as profit drains, distributor delights, competitive weapons, or gold nuggets) and lays out a path for profitably generating revenues.

How Should Companies Talk to Customers Online?

  • Research Highlight
  • Read Time: 7 min 

Digital customer service is becoming more widely adopted, but one place it falls short is in the language and phrases it uses. Many digital service platforms use words that alienate customers rather than engage them; selecting customer-centric language for chatbots and service platforms can make a significant difference in customer satisfaction.

Twitter Is Not the Echo Chamber We Think It Is

  • Research Highlight
  • Read Time: 7 min 

The popular perception of Twitter as a social media “echo chamber,” where people only receive and retweet opinions that match their own, does not reflect the data about users’ actual engagement. The average Twitter user propagates more mainstream content and follows a diverse group of users — and this has implications for social media marketing.