Erik Brynjolfsson on Big Data: A revolution in decision-making improves productivity

MIT Sloan Prof. Erik Brynjolfsson

There is a fundamental change underway in the way that companies make decisions. Instead of relying on a leader’s gut instincts, an increasing number of companies are embracing a new method that involves data-based analytics. This ‘Big Data’ revolution is occurring mainly because technology enables firms to gather extremely detailed information from and propagate knowledge to their consumers, suppliers, alliance partners, and competitors.

Companies that use this type of ‘data driven decision making’ actually show higher performance. Working with Lorin Hitt and Heekyung Kim, I analyzed 179 large publicly-traded firms and found that the ones that adopted this method are about 5% more productive and profitable than their competitors.  Furthermore, the study found a relationship between this method and other performance measures such as asset utilization, return on equity and market value. There is a lot of low-hanging fruit for companies that are able to use Big Data to their advantage. Read More »

MIT Sloan Management Review: Sustainability contributing to company profits

Through a global survey conducted by MIT Sloan Management Review and The Boston Consulting Group, we sought to determine where exactly sustainability sits on the management agendas of the more than 2,800 companies.  It turns out that it’s prominent: more than two-thirds of companies have placed sustainability permanently on their management agenda.

Our study also found that two-thirds of companies see sustainability as necessary to being competitive in today’s marketplace, up from 55% a year earlier.  In addition, two thirds of respondents said management attention to, and investment in, sustainability has increased in the last year.

Read More »