The rise of data-driven decision making is real but uneven — Kristina McElheran and Erik Brynjolfsson

Kristina McElheran, MIT Initiative on the Digital Economy Visiting Scholar

Kristina McElheran, MIT Initiative on the Digital Economy Visiting Scholar

 

 Professor of Information Technology, Director, The MIT Initiative on the Digital Economy


Professor of Information Technology,
Director, The MIT Initiative on the Digital Economy

From Harvard Business Review

Growing opportunities to collect and leverage digital information have led many managers to change how they make decisions – relying less on intuition and more on data. As Jim Barksdale, the former CEO of Netscape quipped, “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” Following pathbreakers such as Caesar’s CEO Gary Loveman – who attributes his firm’s success to the use of databases and cutting-edge analytical tools – managers at many levels are now consuming data and analytical output in unprecedented ways.

This should come as no surprise. At their most fundamental level, all organizations can be thought of as “information processors” that rely on the technologies of hierarchy, specialization, and human perception to collect, disseminate, and act on insights. Therefore, it’s only natural that technologies delivering faster, cheaper, more accurate information create opportunities to re-invent the managerial machinery.

At the same time, large corporations are not always nimble creatures. How quickly are managers actually making the investments and process changes required to embrace decision-making practices rooted in objective data? And should all firms jump on this latest managerial bandwagon?

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Preparation is key for snow or terrorist acts — Steven Spear

MIT Sloan Senior Lecturer Steven Spear

MIT Sloan Senior Lecturer Steven Spear

From The Boston Business Journal

The brief foul weather last month, and the near-miss this past week gave Bostonians one last reminder of 2015’s record snowfall and the shutdowns and disruptions that resulted, and probably left many wondering, “How vulnerable are business and public agencies to any emergency?” Read More »

Expert explains how to improve supply chain efficiency — Thomas Roemer

MIT Sloan Senior Lecturer Thomas Roemer

MIT Sloan Senior Lecturer Thomas Roemer

From Supply Chain Opz

Companies seeking to further improve their supply chain efficiency will have to continue fighting their old foe – variability – albeit in a set of new clothes.

One emerging way to combat demand variability is to locate (some) manufacturing closer to the customer. By reducing lead times due to shorter delivery routes, inventory and waste in the system can be reduced without sacrificing service levels. Much of the recently observed reshoring efforts fall into this category.

Highly flexible manufacturing goes a step further by moving from a Built-to-Stock to a Built-to-Order system for the most erratic demand pattern. Amazon’s printing and binding some of its demand at centers close to their customers while serving base demands from stock is one example of this approach.

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GM can recover if it changes the culture — Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From Detroit Free Press

It’s been a rough year for General Motors. The company has recalled more than 28 million vehicles worldwide and is liable for billions of dollars in automotive repairs and victim compensation. It suffered an 85% drop in its second-quarter earnings and faces multiple state investigations, not to mention class-action lawsuits related to safety issues. Can GM recover from this massive crisis?

It can make a comeback, but the recovery hinges on changing the organization’s culture. For years, GM focused on cost-effectiveness and the bottom line, creating what the new CEO Mary Barra calls “a pattern of incompetence and neglect.” To address the current crisis, she of course needs to fix the safety problems, but she also needs to create a new company culture. Safety must become the priority over cost savings in order to regain consumer and market trust, and GM’s focus needs to be on the customer.

So far, Barra, who inherited the crisis when she was promoted to CEO this past January, is moving in the right direction. By firing 15 employees who were involved in the lack of communication about safety issues, she sent a powerful message both within and outside of the company about the company’s changing priorities.

Read the full post at the Detroit Free Press.

Neal Hartman is a Senior Lecturer in Managerial Communication at the MIT Sloan School of Management.

3 steps for harnessing failure the right way — Anjali Sastry and Kara Penn

MIT Sloan Sr. Lecturer Anjali Sastry

From Fast Company

Think back to your last project. Was it set up to maximize learning? Did you uncover valuable insights along the way? Did you deliver what you set out to? And once it was over, did your team reflect, or did you move straight to the next thing?

A systematic method for managing your projects can set up your team for useful epiphanies at every step. In the end, it can help you to create better deliverables with more lasting and further-reaching impact.

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