MIT Sloan Associate Dean of Executive Education Peter Hirst
From Harvard Business Review
In today’s increasingly competitive hiring market, organizations need to think differently about how to attract new employees and retain existing ones. Unfortunately, many of the obvious solutions require a financial investment: increasing salaries, bonuses, medical benefits, or vacation days. And if your “competitive advantage” in hiring simply boils down to throwing money at the problem, your hires are quite possibly going to jump ship when a higher offer or benefits package is put in front of them.
So how can an organization increase its benefits without increasing its budget? Many startups will look to add “fun” into the mix — pool tables, nerf guns, pizza Fridays, and happy hours. But that won’t necessarily appeal to all types of employees, and it may not be a sustainable option. Here at the Executive Education program at MIT Sloan School of Management, we took a different approach: introducing flex time.
Under Armour and Alphabet have similar stock structures.
Activist investors are fundamentally changing the investment market. They accumulate enough stock in publicly traded companies to influence who sits on the board, then pressure the management and board to focus on short-term returns at the expense of long-term investment. Facebook’s introduction of non-voting shares last week is a preemptive move to block this sort of intervention.
Currently, Facebook FB-0.21% has a dual-class stock structure, with Class A shares having one vote per share and Class B shares, which its founder Mark Zuckerberg and company insiders own, conferring 10 votes per share. The company intends to issue two Class C shares as a one-time stock dividend, which will grant economic ownership of Facebook, but no voting rights. This structure will preserve founder control, and enables Zuckerberg to liquidate a large portion of his shares to pursue philanthropic interests, yet still retain majority-voting control—without a majority of shares. It also means that, as Zuckerberg put it, “You don’t have to worry about losing your job over a couple of bad quarters or controversial short-term decisions, and that makes it easier to make the decisions you think are correct.” In short, predatory activist investors can’t take control and push him out.
Jeanne Ross, Director & Principal Research Scientist at the MIT Sloan School’s CISR
From Hewlett Packard Enterprise
Companies have no end of opportunities when it comes to spending their technology dollars. And over the years, individual business units have become adept at making their cases for the IT projects they want funded.
But according to our research at MIT Sloan School, top-performing companies are bypassing nice-to-have projects in favor of absolutely must-do ones by focusing on their most strategic opportunities for business transformation.
Practically speaking, this means narrowing down the programs that get funded to just a handful—and rejecting proposals for any IT projects that don’t advance one or more of those programs.
We call this “demand shaping.” Demand shaping is the process of negotiating and learning that goes on within a company as it identifies its most valuable and achievable business-change opportunities, and decides which IT programs will best support those opportunities. (Read my HPE Business Insights article “Don’t satisfy demand for IT services—shape it instead” for more on this process.)
But what about the projects that don’t get funded? Isn’t there a risk that they will just be driven underground, contributing to the ever-growing shadow IT challenge companies face today? Shadow IT, of course, is what happens when technology is brought into an organization without IT’s permission or knowledge. Some estimates put shadow IT expenditures as high as 30% of official IT budgets.
If you have control of valuable assets, including trillions of dollars of transactions, as The
Society for Worldwide Interbank Financial Telecommunications (SWIFT) does, your company will be attacked. It’s a matter of when, not if, it will happen. That means you need to develop a sophisticated and multi-faceted approach to cyber-security.
Only a few years ago, corporate cyber-security might have been limited to installing the latest software patch—an activity on a par with, say, facilities management.
However, given the increasing number and magnitude of cyber-crimes, as well as new types of threats, cyber-security now requires a coordinated effort between companies, government agencies and advanced academics with cutting edge insights into the future of technology. In a networked world, no one can afford to go it alone.
On October 29, China adopted a policy of two children per family, instead of one. This change is, in large part, intended to mitigate the adverse demographic trend plaguing China’s social security system: the rapidly declining ratio of active to retired workers. The ratio is falling from over 6:1 in 2000 to under 2:1 in 2050.
However, the new two-child policy is not likely to have a big impact on the worker-retiree ratio, so China’s retirement system will remain under stress. To sustain social security, China needs to implement other reforms — moving from a local to a national system and expanding the permissible investments for Chinese pensions.
The one-child policy always had exceptions, such as for rural and ethnic communities. These exceptions were broadened in 2013 to cover couples where both were only children. Yet the birth rate did not take off.