Why resilient teams are more important than big ideas – Joe Hadzima

Joe Hadzima, MIT Sloan Senior Lecturer

Joe Hadzima,
MIT Sloan Senior Lecturer

From Xconomy

How important is having a “big idea” for startups? Ideas can generate a lot of buzz and capture attention from investors and potential customers, but long-term success really depends on the capabilities of the team.

It’s often said that investors typically look for an “A” team with a “B” idea rather than a “B” team with an “A” idea. The reason is that once you start developing an idea, things change, models need to pivot, and teams must be able to adapt. This makes a lot of sense because if all you have is an A idea and hit an obstacle, the venture fails. However, an A team can iterate until it finds success.

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Why your diversity program may be helping women but not minorities (or vice versa) – Evan Apfelbaum

MIT Sloan Asst. Prof. Evan Apfelbaum

MIT Sloan Asst. Prof. Evan Apfelbaum

From Harvard Business Review

When it comes to issues of race, gender, and diversity in organizations, researchers have revealed the problems in ever more detail. We have found a lot less to say about what does work — what organizations can do to create the conditions in which stigmatized groups can reach their potential and succeed. That’s why my collaborators — Nicole Stephens at the Kellogg School of Management and Ray Reagans at MIT Sloan — and I decided to study what organizations can do to increase traditionally stigmatized groups’ performance and persistence, and curb the disproportionately high rates at which they leave jobs. Read More »

Running business as if the future matters — Barbara Dyer

MIT Sloan Senior Lecturer and Visting Scientist Barbara Dyer

MIT Sloan Senior Lecturer and Visting Scientist Barbara Dyer

From The Case Foundation

The Long Now Foundation’s Interval Café is a place for conversation about long-term thinking. Nestled in a concrete warehouse at San Francisco’s historic Fort Mason, the Interval was a fitting watering hole for the nearly 2,500 participants in the recent Social Capital Markets (SOCAP) gathering. SOCAP’s annual pilgrimage to Fort Mason brought together innovators, investors, foundations and social entrepreneurs to “build a world we want to leave to future generations.”

But drive an hour south from Fort Mason to Silicon Valley and you’ll be reminded that short-termism is deeply embedded in our business culture. This epicenter of tech start-ups is defined by a business development norm of launch, scale and exit. Investors are more likely to ask, “What’s your exit strategy?” than “What’s your long-term vision?”

Today’s young business leaders came of age in the era of “short-termism” where companies enter and exit in five to ten year cycles and compete in a world where workers average 11.3 jobs during their careers. Dramatic disruption in the 1980s due to globalization, recession and technological change gave way to financial markets’ relentless push for short-term gains. Jim Collin’s 1994 book Built to Last: Successful Habits of Visionary Companies may have been a last bow to long-term business thinking.

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The lose-lose tax policy driving away U.S. business — Michelle Hanlon

MIT Sloan Prof. Michelle Hanlon

From The Wall Street Journal 

Apple issued $12 billion of U.S. debt in April, which gave the company a domestic cash infusion that allowed it to keep more earnings overseas. Last month Pfizer PFE attempted to acquire AstraZeneca, a transaction that would have made Pfizer a subsidiary of the U.K.-based company. These were useful examples in the taxation classes I teach at MIT’s business school, but the real-world implications of these decisions are troubling. Even worse, legislators have responded with proposals that seek to prevent companies from escaping the U.S. tax system.

The U.S. corporate statutory tax rate is one of the highest in the world at 35%. In addition, the U.S. has a world-wide tax system under which profits earned abroad face U.S. taxation when brought back to America. The other G-7 countries, however, all have some form of a territorial tax system that imposes little or no tax on repatriated earnings.

To compete with foreign-based companies that have lower tax burdens, U.S. corporations have developed do-it-yourself territorial tax strategies. They accumulate foreign earnings rather than repatriate the earnings and pay the U.S. taxes. This lowers a company’s tax burden, but it imposes other costs.

For example, U.S. corporations hold more than $2 trillion in unremitted foreign earnings, a substantial portion of which is in cash. This is cash that currently can’t be reinvested in the U.S. or given to shareholders. As a consequence, companies are borrowing more in the U.S. to fund domestic operations and pay dividends. Another potential effect is that companies invest the earnings in foreign locations.

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What’s the Business Case for Diversity in the Workplace? — Evan Apfelbaum

MIT Sloan Asst. Prof. Evan Apfelbaum

What’s the business case for diversity in the workplace? It’s less about what diversity adds, and more about what homogeneity takes away.

Many people share a sense of moral responsibility to advocate for diversity in organizations, but what is the functional value of diversity in the workplace? Over half a century of research has provided few straightforward or consistent answers. Some studies have shown diverse teams—that is, teams comprised of people of different races, genders, and backgrounds—promote creativity, foster critical thinking, and tend to make better, more thoughtful decisions because they consider a wider range of perspectives. Other studies indicate diverse teams fuel interpersonal conflicts, reduce cohesion, and slow the pace of learning.

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