Leadership lessons from your inner child – Douglas Ready

MIT Sloan Senior Lecturer Doug Ready

MIT Sloan Senior Lecturer Doug Ready

From the MIT Sloan Management Review.

By tapping into their inner child, leaders can blend the bold thinking and action of childhood while maintaining responsibility to the bottom line — an important balance in digital leadership.

When I turned five, I got a new bike. I didn’t know how to ride it, but I took it to a nearby hill anyway, a willing warrior, ready to ride. Was I prepared? Would I be brave enough to overcome the anxiety of facing the unknown? The truth is those questions never occurred to me at the time. Reflecting on this experience decades later, I realized I wasn’t just a willing warrior — I was an ecstatically enthusiastic one. Today, I can’t help but wonder why it seemed so much easier to take on significant new challenges as a five-year-old than it is for me now. As a child, did I have gifts that I somehow lost over the years? Was I foolish then and more responsible now? Upon further reflection, I have come to realize that I’ve been fighting a decades-long battle to not lose many of those gifts that made it relatively easy to learn new things when I was young.

Read More »

The enabling power of trust – Douglas Ready

MIT Sloan Senior Lecturer Doug Ready

MIT Sloan Senior Lecturer Doug Ready

From MIT Sloan Management Review

What will it take to become a great leader in the digital economy? What will be the differentiating skill sets (what individuals will need to do) and mind-sets (how they will need to think and behave) that will shed light on what it will take to lead next-generation organizations effectively? We have set out to address these important questions as the foundation for MIT Sloan Management Review’s newest Big Ideas Initiative: The Future of Leadership in the Digital Economy.

Since it is impossible to know the future with certainty, we started by establishing a hypothesis about what skills and attributes this future leader might possess. We laid that hypothesis out in my first blog post, “Leading Into the Future,” in which we indicated that there will be both contextual elements (meaning fit for purpose for the digital economy) and core enabling elements (meaning traits that are so important that they form the cultural fabric of an organization). Merged together, we believe these core and contextual elements will help define what great leadership will look and feel like in the digital economy.

This was a good start, but an insufficient one, because we need to bridge the gap between what we know to be true today and what we believe will be true tomorrow. To help build that bridge, we will soon be distributing a global survey to thousands of practicing managers and leaders from around the world to get their views on this matter. We have also begun conducting in-depth interviews with CEOs, C-suite team members, heads of digitalization, senior line and functional leaders, and other thought leaders in all things digital.

Read More »

Improving strategic execution with machine learning – Michael Schrage, David Kiron

MIT Sloan Management Review Executive Editor David Kiron

David Kiron, Executive Editor, MIT Sloan Management Review

Michael Schrage, Research Fellow, MIT Center for Digital Business

From MIT Sloan Management Review

Machine learning (ML) is changing how leaders use metrics to drive business performance, customer experience, and growth. A small but growing group of companies is investing in ML to augment strategic decision-making with key performance indicators (KPIs). Our research,1 based on a global survey and more than a dozen interviews with executives and academics, suggests that ML is literally, and figuratively, redefining how businesses create and measure value.

KPIs traditionally have had a retrospective, reporting bias, but by surfacing hidden variables that anticipate “key performance,” machine learning is making KPIs more predictive and prescriptive. With more forward-looking KPIs, progressive leaders can treat strategic measures as high-octane data fuel for training machine-learning algorithms to optimize business processes. Our survey and interviews suggest that this flip ― transforming KPIs from analytic outputs to data inputs ― is at an early, albeit promising, stage.

Those companies that are already taking action on machine learning ― investing in ML and actively using it to engage customers ― differ radically from companies that are not yet investing in ML. They are far more likely to:

  • Develop a single, integrated view of their target customer.
  • Have the ability to drill down to see underlying KPI data.
  • Check their KPI reports frequently.

These differences all depend on treating data as a valuable corporate asset. We see a strong correlation between companies that embrace ML and data-driven decision-making.

Read More »

Staffing firms must use data assets to compete with new platforms – Geoffrey Parker

MIT Sloan Visiting Scholar and Fellow, Initiative on the Digital Economy, Geoffrey Parker

From MIT SMR Custom Studio

Like established companies in many industries, incumbent players in the staffing and recruitment sector are encountering a competitive landscape transformed by platform businesses.

New platforms that have sprung up to connect companies with workers include online freelance marketplaces such as Fiverr, TaskRabbit, and Wonolo. While Facebook and Google are seeking a cut of recruitment advertising revenue, Microsoft-owned LinkedIn is challenging staffing firms by offering job listings and recruiter services fueled by well-maintained data. With its emphasis on professional networking, LinkedIn gives users motivation to maintain current information about their credentials, providing a rich view of where they fit into the economy and the jobs they’re qualified for.

To develop their capabilities in a platform economy, traditional staffing enterprises need to make better use of their own valuable data assets. Based on what they know and capture about both their customers’ workforce needs and job candidates’ qualifications, what new revenue streams can they create? For example, they might use in-depth knowledge of an employer’s resource needs to create road maps for workforce skills development that will generate value for that organization. When training and education providers participate in the ecosystem, staffing companies would generate revenue via recommendations that are implemented.

Using data effectively is key to efficiently matching supply and demand, the core of any platform strategy. With more and higher quality data, a company does a better job of facilitating that match. However, many traditional enterprises are not leveraging data from across the whole business, and their analytics capabilities are designed to optimize current, not future, business models.

Read More »

New MIT Sloan Management Review study: An advanced analytics culture outweighs all other factors — David Kiron

The Need for Culture

The Need for Culture

What distinguishes the winners from the losers among companies converting data and analytics into a positive force in their strategies and operations? And what practices are keeping the winners ahead?

The Analytics Mandate, a new research report from MIT Sloan Management Review and SAS Institute, takes several steps toward answering these questions.

Our most significant finding? Our study shows that an advanced analytics culture outweighs other analytics-related factors -including data management technologies and skills-among companies that strongly agree they are gaining a competitive advantage from analytics. Essentially, a strong analytics culture is the lynchpin in moving from competitive parity to competitive advantage.

The need for change within a corporation’s culture, and the best way to achieve it, are both nicely illustrated in a case study included in our report.  WellPoint, the largest for-profit managed care organization within the Blue Cross Blue Shield umbrella, knew that sharing insurance data with physicians would provide doctors with a 360-degree medical view of every patient. This in turn, would better enable them to spot patients more likely to go to the emergency room or be readmitted to a hospital, contributing to expenses that drive up the high cost of health care delivery.

Within WellPoint, creating the data reports for physicians initially became a classic showdown between IT and interests from the business side.

The initial reports, prepared by the IT team, were late and lacked fundamental functionality.  For instance, different units within the company reported an emergency room visit in different ways.  The IT team’s explanation: no one told them the definitions had to be the same. This much was true — the business side didn’t think it needed to specify that emergency room visits be consistent across reports. They had assumed this was a given.

The high-profile project was subsequently placed in Red status. At this point, senior management got involved. Problems were brought to executives who, in turn, ensured resources were allocated. Outside consultants and experts were hired. More resources were diverted to the project.

Finally, after many challenging discussions, IT and the business side began working together using an iterative development approach called “Agile”, which focuses on “user stories.”. This meant understanding the perspective of the end user—the provider—and the context in which he or she would be using the data, as opposed to just developing according to a static set of  requirements.

Early reaction to the data system from doctors has been highly positive.  Over time, WellPoint believes that the proactive, coordinated-care model made possible when providers have actionable insights at their fingertips can cut health care costs by as much as 20%. That could work out to billions of dollars, given that WellPoint reimbursed more than $99 billion in health benefits for commercial and individual members in 2013.

In short, to create strategic benefits with analytics WellPoint had to change its organizational behavior. Without an effective collaboration between the business side and IT, the program would have remained in jeopardy. Without leadership’s involvement, the program would have remained in jeopardy. Preparing data for a strategic role often means changing business conduct and that, more often than not, requires a top down process to create the necessary alignment of incentives and goals.

To read the full report, please visit “The Analytics Mandate.”

David Kiron is Executive Editor, Big Ideas initiatives, for MIT Sloan Management Review.