MBAs can front a revolution in collaborative leadership – Deborah Ancona and Hal Gregersen


MIT Sloan Prof. Deborah Ancona

Hal Gregersen, Executive Director of the MIT Leadership Center

Hal Gregersen, Executive Director of the MIT Leadership Center

From The Financial Times

There seems to be growing unease with the value we place on leadership. Susan Cain, author of Quiet, a best-selling book about the power of introverts, offers an example in a New York Times piece “Not Leadership Material? Good”. In it, she is specifically focusing on how college admissions favour applicants with leadership credentials.

She worries that too many slots are being offered to high-school seniors who are status and power-seekers. She bristles at the implication that students do not deserve merit scholarships or places at elite schools if they do great work as team players or solo artists.

Ms Cain deplores the fact that people who fall into the latter categories feel pressured to pretend they were born to run things. “If college admissions offices show us whom and what we value,” Cain says, “then we seem to think that the ideal society is composed of Type As.”

Good points, but let us not fall too far into the trap of saying that some people are leadership “types” and others are not. The really damaging thing for a society is to signal to people that “leaders” are different from those who are contributors and team members — rather than the same people at different moments and in different modes.

To understand the point, consider this example. A couple of years ago, a large, diverse group of people on MIT’s campus rallied round a project they all agreed deserved their best efforts: creating a memorial sculpture to honour the life of Sean Collier, a campus police officer who was murdered by terrorists in 2013.

Who led this project?

It is impossible to name one person. Professor J Meejin Yoon, head of MIT’s architecture department, designed the sculpture knowing that to make its massive interlocking granite pieces stand would require a technical feat of engineering.

As Prof Yoon commented, “developing and constructing the memorial requires a coming-together of like-minded, like-spirited people from many different disciplines to create something singular in the world”. She called it a “very MIT project”.

Throughout 2015, different contributors led efforts at key moments when their expertise was most relevant to making progress. Just as readily, they stepped aside when some new aspect of the project came to the fore. Combining those minds and hands did not bog the project down: an effort that should have taken three years was accomplished in one. Read More »

Why Americans are unhappier than ever – and how to fix it – George Ward

George Ward, MIT Sloan PhD student

From The Conversation

March 20 is International Day of Happiness and, as they’ve done every year, the United Nations has published the World Happiness Report. The U.S. ranks 18th among the world’s countries, with an average life satisfaction of around 6.88 on a scale of 10.

While that may be relatively near the top, America’s happiness figures have actually declined every year since the reports began in 2012, and this year’s are the lowest yet. The question, then, is whether the government has a role to play in improving the happiness of its citizens. And if so, how might policymakers go about it?

Fortunately, a growing body of work by economists and psychologists can give governments access to the kind of data that can inform the way they think about policy and happiness.

In our new book, “The Origins of Happiness: The Science of Well-Being Over the Life Course,” my colleagues and I provide a systematic account of what makes for a satisfying life.

The role of government

The idea that government ought to focus attention on the well-being of its citizens goes back centuries. Thomas Jefferson himself said, “The care of human life and happiness … is the only legitimate object of good government.”

Historically, this has meant increasing economic productivity and growth to increase personal happiness. But as the data suggest, and many countries are beginning to realize, this isn’t likely to be sufficient. As a result, many governments around the world are now taking steps to broaden their policy goals beyond GDP. Read More »

This is your brain on stocks–Andrew Lo

MIT Sloan Prof. Andrew Lo

From MarketWatch

Ever since I was a graduate student in economics, I’ve been struggling with the uncomfortable observation that economic theories often don’t seem to work in practice. That goes for that most influential economic theory, the Efficient Markets Hypothesis, which holds that investors are rational decision makers and market prices fully reflect all available information, that is, the “wisdom of crowds.”

Certainly, the principles of Efficient Markets are an excellent approximation to reality during normal business environments. It is one of the most useful, powerful, and beautiful pieces of economic reasoning that economists have ever proposed. It has saved generations of portfolio managers from bad investment decisions, democratizing finance along the way through passive investment vehicles like index funds.

Then came the Financial Crisis of 2008; the “wisdom of crowds” was replaced by the “madness of mobs.” Investors reacted emotionally and instinctively in response to extreme business environments — good or bad — leading either to irrational exuberance or panic selling.

Read More »

Beer’s role in innovation – Joe Hadzima

Joe Hadzima,
MIT Sloan Senior Lecturer

From Huffington Post

Many great—or seemingly great—ideas come to fruition during the course of drinking a beer. When you’re out with the guys (or girls), one or two cold ones could have you rhapsodizing about how you’re going to change the world. This is most likely when self-lowering toilet seats, automatic pet petters, and self-twirling ice cream cones were all dreamed into existence.

As great as these and other inventions are, we’re not sure beer had any role in their creation. But has beer had a role in actual innovation?

Self-driving cars are all the rage in the news lately, with Google and Uber fighting it out over patents and racing to the front of the line for consumer release. While they were focused on cars for the everyday driver, the first self-driving truck delivered 50,000 cans of Budweiser 120 miles in Colorado.

That’s right. The first self-driven truck was used to deliver beer.

Budweiser has come a long way since the days of the horse and cart, right? In the first days of beer delivery, customers only had access because their drink of choice was brought daily by horse and wagon.

You’re probably familiar with the Clydesdales, still often used in Budweiser commercials to tug at heartstrings. These horses were bred by farmers along the banks of the River Clyde in Lanarkshire, Scotland. The Great Flemish Horse was the forerunner of the Clydesdale, which was bred to pull loads of more than one ton at a walking speed of five miles per hour. While that kind of pulling power was amazing during those days, it was still slow and expensive. Each hitch horse needed 20 to 25 quarts of whole grains, minerals and vitamins, 50 to 60 pounds of hay, and 30 gallons of water per day.

Is it any wonder that Anheuser Busch was the exclusive US licensee of the Rudolph Diesel patents? One might assume Ford or the railroad would have been first on board with the development of diesel powered trucks, but it was actually beer.

Knowing how much was needed to keep those magnificent horses healthy and hardy, it seems diesel was a logical next step. This is a classic example of early adopter customers driving a new technology.

Read More »

The slow road to state pension reform – Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

MIT Sloan Senior Lecturer Robert Pozen

From Pensions & Investments

Pennsylvania, like many other states, is facing a huge unfunded pension deficit in its defined benefit plans: a $70 billion shortfall in two large plans for teachers and other state employees. Unlike most states, Pennsylvania in early June passed — with widespread bipartisan support — major legislation “to get real meaningful pension reform,” as Gov. Tom Wolf was quoted saying.

Indeed, the recent Pennsylvania law is a significant step in the right direction. However, the financial projections for the legislation show how long it takes, given the legal and political constraints, for this approach to pension reform to meaningfully reduce the burden on state budgets.

Here is the background. In 2001, Pennsylvania reported a $20 billion surplus in its two big defined benefit plans – the Public School Employees’ Retirement System and the State Employees’ Retirement System. But then state legislators boosted benefits for current state workers without increasing contributions to these plans, and even extended this giveaway to already retired public employees. In 2003, legislators compounded the state’s funding challenge by taking a “pension holiday” — decreasing pension contributions to allocate revenue to other state priorities.

These actions contributed to a giant shortfall during the global financial crisis, when the value of the state’s pension portfolios plummeted. In response, state legislators in 2010 reduced pension benefits — only for newly hired state workers — to pre-2001 levels. Nevertheless, because of growing obligations to current and retired workers, the state’s contributions to its pension plans ballooned to $6 billion in the 2018 fiscal year from $1 billion in the 2011 fiscal year.

Read More »

How Lies Spread Online – Sinan Aral

From The New York Times

The spread of misinformation on social media is an alarming phenomenon that scientists have yet to fully understand. While the data show that false claims are increasing online, most studies have analyzed only small samples or the spread of individual fake stories.

My colleagues Soroush Vosoughi, Deb Roy and I set out to change that. We recently analyzed the diffusion of all of the major true and false stories that spread on Twitter from its inception in 2006 to 2017. Our data included approximately 126,000 Twitter “cascades” (unbroken chains of retweets with a common, singular origin) involving stories spread by three million people more than four and a half million times.

Disturbingly, we found that false stories spread significantly more than did true ones. Our findings were published on Thursday in the journal Science.

We started by identifying thousands of true and false stories, using information from six independent fact-checking organizations, including Snopes, PolitiFact and These organizations exhibited considerable agreement — between 95 percent and 98 percent — on the truth or falsity of these stories. Read More »