Artificial intelligence, predictive analytics: How MBA campus recruiting is changing – Jean Ann Schulte

MIT Sloan Director of Employer Relations & Recruiting Services Jean Ann Schulte

From Business Because

Traditionally, recruiting is an on-campus, very structured, time-intensive, and expensive process. Students and employers learn about each other through a series of organized activities like mixers, presentations, coffee chats, treks, interview prep sessions, invite-only dinners, and interviews.

While the largest, most prominent companies continue to host a full schedule of events at their preferred schools, new approaches are emerging.

Employers seek to cut the cost and time required to hire, while increasing the predictability of a new hire’s success. Students have less time and more employment options. Given the rising demand for talent, they expect a more personalized approach and put greater emphasis on cultural fit.

Enter Artificial Intelligence (AI) and predictive analytics. Together, they automate much of the process of sourcing and engaging qualified, interested candidates. It’s a hot field—the number of VC-backed startups focused on the hiring process and employment has increased six-fold in 10 years, with more than 100 companies entering the space in each of the past three years.

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Artificial Intelligence Will Soon Shop For You, But Is That A Good Thing? – Renée Richardson Gosline

MIT Sloan Prof. Renée Richardson Gosline

From WBUR’s Cognoscenti

We’ve all had bad department store shopping experiences. The aggressively cheerful salesperson. The unforgiving glare of the dressing room. The overstuffed racks of garments where none of the sizes fit, and the ones that do, don’t come in your favorite color.

The advent of online shopping has helped consumers gain more control over their shopping experiences. But digital purchases are often a gamble, too. You scroll through endless webpages to find the perfect boots only to discover your size is on back order for two months. And the items you purchase frequently disappoint: The jacket that looked so elegant on the website’s model looks awkward on your frame.

Retail prognosticators claim that artificial intelligence and other new technologies will offer shoppers salvation. In the not-so-distant future, armies of robots using retina recognition software (à la “Minority Report”) will tailor their sales pitches to your preferences and price point. Voice-activated assistants and digital mannequins will help you to find just the right fit. Shopping from home will be a breeze too: Virtual reality headsets will allow you to “try on” clothes and sample items ranging from a tube of lipstick to a tennis racket. Two-day shipping? How antiquated. In the future, your package will arrive via drones in less than two hours. It may sound like science fiction but, in fact, many stores are testing these innovations and have plans to roll them out to customers.

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Four ways technology will change how people do business – Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From MIT Sloan Custom Studio

Technology platforms and the IoT are clearly changing the structure of organizations — and the valuation of companies today is out of line with the numbers of jobs they create. In the past, the General Motors, and even the Googles, created lots of new jobs and the valuation of the company reflected this — but compare Netflix, just 3,700 employees, with its old-world equivalent, Blockbuster, which at its peak had $7 billion in revenue and 60,000 employees. Today, Netflix has a larger market capitalization. The world is changing — and the question is, will we create enough good quality jobs to meet the needs of the workforce of the future?

There’s an old Japanese phrase that came out of robotics work in the 1980s and 1990s in manufacturing that technologists ought to begin to understand and build into their work: “It’s workers who give wisdom to machines.” People give wisdom to the technology and then technology can in turn enhance human judgment. We can solve big problems in the world and create big opportunities and the next generation of inventions and jobs.

But it will mean some major changes to how businesses are run — and how companies view (and use) technology.

Technology is a tool — not a goal.

It’s not technologies that will solve future challenges — it’s how we use them that counts. That means we have to start with human and societal problems, and figure out how to put technology to work to address and complement what we can do together with other institutions. We must define the questions we ask of technologists and not view technology as an autonomous, deterministic force, but as an asset that is mobilized to address these important issues. Most important, we have to educate technologists and not leave them to define the objectives of the technology. If we do, they will define it very narrowly and squeeze out as much human variabilities as possible, which would lead us to false solutions. A broad participation in defining the problems will enable us to find our way to a better world for everyone.

Technology platforms need to be designed with stakeholders in mind.

There’s no single deterministic model or market design for digital platform design. Uber uses data to control its customers and driver workforce. What would be different about the experience for drivers, and maybe customers, if that information was decentralized so they could maximize their own incomes and improve their own livelihoods? We have to think about how we design these new platforms, so the benefits are more broadly shared across the different stakeholders.

In the long run, a good business model is one where the more your customers and employees know how the company works and have information to control their actions, the more committed they will be to building the business to benefit both themselves and the organization that’s providing that information. We’ve got to think about ways customers, employees, even public/private partnerships can share information to use these technologies much more holistically than for some specific stakeholder. In this way, customers become part of the innovation cycle. Maybe not the first mover for innovation but the second generation, and that will create new jobs, opportunities and applications.

It’s not about technology per se, it’s the interactions with people that use them and organizational designs that drives high levels of productivity, customer service and innovation. The new, flexible enterprise also has to draw on people outside the organization more fully. We must ask what’s in it for various stakeholders, and have them contribute to further development and inventions. If they are invested in it and see joint gains, it continues a positive cycle of innovation.

As organizational structures become more flexible, corporations will need to adapt.

A flexible corporate structure will need a lot more coordination across groups and different bodies of expertise. That means the “solid,” functional firms — finance, operations, HR, marketing and so on — are really going to be challenged to work out how the discovery and deployment of new apps will involve people across functions.

That doesn’t mean the old-world corporation is defunct. We still need people who have specialized knowledge in IT and marketing, but the productivity comes in linking them. Knowledge bases won’t go away, but the people and skills most valuable in the future (and incomes already reflect this) are the ones that have hybrid skills with technology know-how and figure out how to apply to functional areas. HR people won’t only specialize in compensation and performance management, but also know how to utilize technology to better design how we do our work.

With a lot of knowledge at the edges of organizations, strategy has to keep an eye on what the business is trying to achieve and ask how to be successful on a financial and sustainable basis, as well as when it needs to ally with others outside its traditional boundaries. This remains the role of the CEO and the board. However, they also have to rely on information flowing up rather than dictating what will be. That day is over.

The relationship between companies and workers is changing, too.

Technology is leading to a more decentralized workplace, with the flexibility to work in different places at different times. But do we have the managerial wisdom to take advantage of the new norm? There’s still the legacy of Frederick Winslow Taylor’s management control thinking: “If you’re not in the office, I don’t trust you’re not at home playing computer games.” The distributed workplace calls for a mindset change in management to ensure that we work with people and don’t compensate them for the amount of time spent in the office, but for the contribution they make and the work they do. If we can get over this managerial hurdle, we can take advantage of distributed workplaces.

We have to get over the notion that it’s all about shareholder value and the shorter term, and instead invest for the long term and listen to employees. This means finding ways to expand and create value, but also discovering ways to distribute value more equitably. At MIT, we have a good companies and good jobs initiative, and are going to hold a series of multi-stakeholder forums around these broad questions: What makes a company a great place from the standpoint of financial return, but also good for jobs and career opportunities?

The reality is, if we don’t start to engage in this way and have a social contract where people feel their interests are being served, we are going to have an explosion. It happened with Brexit, it happened in the 2016 U.S. election. A new social contract must be based on trust, mutual interest and listening to each other, creating value together and negotiating how to distribute value more equitably. Use the knowledge of the workforce by all means, but we can’t have a world of winners and losers.

This article is excerpted and modified from Telefonica and MIT Sloan Leaders Consider Distributed Future

Thomas Kochan is the Co-director, MIT Sloan Institute for Work and Employment Research, where he is Professor of Work and Employment Research.

Will your bank be on your side if it gets hit with a cyberattack? – Doug Criscitello

Doug Criscitello, Executive Director of MIT’s Center for Finance and Policy

Doug Criscitello, Executive Director of MIT’s Center for Finance and Policy

From The Hill

In a recent column, I discussed cyber risks that could adversely affect bank and brokerage customers and explored the conditions necessary for development of actuarially sound insurance products at the retail level to protect individuals from the most catastrophic of cyberattacks to their accounts.

While new consumer-oriented insurance products are being offered to guard against cyberattacks, they don’t necessarily mitigate a consumer’s nightmare scenario. That scenario goes beyond having personally identifiable information stolen to having your bank’s digital records wiped out or otherwise corrupted by a malicious actor, eliminating any history of your account balances. So this is the question: would your bank or brokerage stand by you in the event of such an attack or is cyber risk insurance necessary?

Regardless of the availability of cyber risk insurance for individuals, the threat to consumers flows from vulnerabilities within and across financial institutions. To the extent an individual’s bank or other financial services provider has strong institutional defenses, risk to individuals falls dramatically.

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Preparing for the cyberattack that will knock out U.S. power grids – Stuart Madnick

MIT Sloan Professor Stuart Madnick

MIT Sloan Professor Stuart Madnick

From Harvard Business Review

Cyberattacks are unavoidable, but we’re not going to stop using computerized systems. Instead, we should be preparing for the inevitable, including a major cyberattack on power grids and other essential systems. This requires the ability to anticipate not only an unprecedented event but also the ripple effects that it could cause.

Here’s an example of second-order effects (though not caused by a cyberattack, they’re a good way to think through what could happen in an attack). In February 2017, an area of Wyoming was hit by a strong wind storm that knocked down many power lines. It took about a week to restore power, due to heavy snow and frozen ground. Initially, water and sewage treatment continued with backup generators. But the pumps that moved sewage from low-lying areas to the treatment plants on higher ground were not designed to have generators, since they could hold several days’ worth of waste. After three days with no power, they started backing up. The water then had to be cut off to prevent backed-up waste water from getting into homes. The area had never lost power for so long, so no one had anticipated such a scenario.

Now think about what would happen if a cyberattack brought down the power grid in New York, for example. New Yorkers could manage for a few hours, maybe a few days, but what would happen if the outage lasted a week or more? For an example of the kind of disruption such an attack could cause, consider the 2011 Japanese tsunami. It knocked out both the power lines and the backup generators at the same time. Either event could have been managed, but both occurring at the same time was a disaster. Without power, the cooling systems in three nuclear reactors failed, resulting in massive radiation exposure and concerns about the safety of food and water. The lesson: We need to prepare not only for an unexpected event but also for the possible secondary effects.

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