Exchange 62:Now & Next
Designed and led by some of the world’s brightest minds in management—the MIT Sloan faculty—the Exchange 62: Now and Next colloquium offered a window into the challenges faced by today’s organizations and leaders, and the ideas and innovations that will guide them in the future. For a look inside these compelling and timely discussions, please check out the session summaries and videos below.
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Demonstrating the Wisdom of Crowds
Featuring Professor Thomas Malone
A century ago, groups that demonstrated collective intelligence relied solely on human brainpower. In today’s technology-driven world, however, some of the most recognizable forms of collective intelligence—Wikipedia, Google, Linux—rely on the combined capabilities of humans and computers. This human-computer acumen is the main focus of MIT’s Center for Collective Intelligence, where researchers examine how people and computers can be connected so they collectively act more intelligently than any person, group, or computer has ever acted before.
In an Exchange 62 session led by Professor Thomas Malone, a panel of experts in computer science, technology, and entrepreneurship explored various types of collective intelligence such as open innovation and computer-based crowd sourcing, and discussed how new communication technologies are changing the way people work together.
While most people recognize that Wikipedia is an example of collective intelligence, there are other forms being explored. Computer scientist Rob Miller spoke about “cloud computing” and “crowd computing.” This involves the notion of coordinating a large group of people to do tiny things or to solve tiny problems that software or one user can’t do.
Another key component of collective intelligence has become the role of lead users. Said Eric von Hippel, “Lead users innovate to solve their own needs at private expense and then freely reveal their innovations.” Von Hippel gave an example of a surgeon who identified the need for a heart-lung machine who ended up spearheading the creation of one after other avenues he had pursued failed.
Entrepreneurship in Emerging Economies
Featuring Professor Yasheng Huang
In less than a decade, entrepreneurial companies in emerging economies have acquired a number of Western corporate giants including IBM, Land Rover, Jaguar, and Volvo. These acquisitions point to the vibrant growth of entrepreneurship in developing countries as well as the shifting hierarchy of global economic players.
MIT Sloan’s Global Entrepreneurship Lab, commonly known as G-Lab, places students at the forefront of these developments by sending them to emerging economies to study, research, and work with entrepreneurial companies. In 2008, G-Lab expanded to include China Lab and India Lab and has since provided more than 200 students with action learning experiences in China and India, two of the fastest growing economies in the world.
This Exchange 62 colloquium, facilitated by Professor Yasheng Huang, brought together entrepreneurs and students who participated in G-Lab for a lively discussion about the significant role that entrepreneurship is playing in emerging economies and the singular opportunities that MIT Sloan students have to take part in the action.
Speaking to the value of working with MIT Sloan students, Valtech’s Bhattacharyya stated, “You can get real work done with good team members… . We can’t solve this problem, but our MIT team can.”
Echoing Bhattacharyya’s sentiments, AE&E’s Xiong stated that “We would pay more for teams; to have internships would be great.”
While the impact of student teams is undeniable, Professor Huang stressed that while much has been accomplished, there is much to be done. He pointed out the need for expansion into Africa and in underdeveloped regions in China and India.
Businesses and NGOs Co-Evolving to Foster Social, Ecological, and Economic Well-Being
Featuring Senior Lecturer Peter Senge
Global capitalism is changing rapidly. We are still at the beginning of the beginning of what is likely to ensue in the coming years, as countries and companies get more serious about addressing the deep social, ecological, and economic imbalances that global capitalism has wrought.
In this session, New York Times bestselling author and MIT Sloan Senior Lecturer Peter Senge leads a panel discussion with the chief executives of Unilever and Oxfam GB. In addition to Unilever and Oxfam’s groundbreaking eight-year partnership, conversation focused on new metrics for national progress beyond the GDP, fundamental changes in financial markets, and global business strategies for creating shared value with society.
Lessons from the Financial Crisis
New Directions for Managing Risk and the Global Financial System
Featuring Professor Antoinette Schoar
What caused the financial crisis? Some experts believe it was the result of a perfect storm in U.S. financial markets brought on by a combination of bad banking regulations, lax oversight of mortgage brokers, and reckless Wall Street practices. Others contend that the crisis is symptomatic of longer-run shifts in global economic growth patterns, which show a strong increase of wealth creation in developing countries while developed countries stagnate in the 21st century. During this session led by Professor Antoinette Schoar, financial experts shared their insights into the causes of the financial crisis and the steps that companies and government organizations could take to better manage risk and the global financial system going forward.
When asked about their views for what caused the financial crisis, Bennett W. Golub responded that there was mass confusion in people’s minds between cash and the value of a security. “Many people think they’re identical and they’re not.”
Added Chi-Won Yoon: “This is a global crisis. We need a global framework to solve it. Right now there is a fog of regulatory uncertainty around the world.” Having said that, he believes that integration within the global financial markets will continue, but that “we may need to go through a process of harmonizing regulation.”
Luncheon with the Laureates
Facilitated by Professor Richard Schmalensee and featuring Professors Robert Merton and Robert Solow
Is the financial system too complex for the country’s good? Did it all just get too complicated? And if so, how do we deal with it?
It’s the economy, but this isn’t stupid. Quite the opposite when two Nobel laureates—Robert Merton, MIT PhD ’70, and Institute Professor Emeritus Robert Solow—argued different approaches to making sure what happened to the U.S. financial markets in 2008 doesn’t happen again.
Dean Emeritus and Howard W. Johnson Professor of Management Richard Schmalensee moderated the talk, held at MIT Sloan’s Building the Future event.
Merton blamed, to some extent, a lack of financial education and insight for the people involved in and watching over the U.S. financial system. But those problems can be remedied, he said, arguing that more layers of government regulation are not a panacea for the problem of financial complexity.
“Without [education],” he said, “passing all the rules in the world won’t matter.”
While not giving a pass to “bad behavior, fools and knaves,” and “highly questionable” credit evaluation, Merton said many people who could have known better may have been lost in the labyrinthine turns of modern-day finance.
Solow agreed that things got out of hand, but argued that many of the problems that led to the financial crisis may have been unnecessary to begin with. Finance, he said, does not exist for the sake of finance. It exists, he argued, for the production of goods and services, and to facilitate the growth of society as a whole.
“How much of the financial sector do we need?” he asked. “Was all this slicing and dicing that was done of use to the mortgage market?”
Recovery is possible, Solow said, but it will require a makeup for the production shortfalls caused by the burst housing bubble and the accompanying loss of American wealth.
MIT’s Entrepreneurial Ecosystem
Featuring Professors Fiona Murray and Ed Roberts
“We don’t want observers, we want players.”
So said David Sarnoff Professor of Management Technology Ed Roberts, of the entrepreneurial zeitgeist at MIT. His remarks were part of the Exchange 62: Now and Next Colloquium session on MIT’s Entrepreneurial Ecosystem.
Over the past several decades, MIT has established itself as an entrepreneurial hub—a place where research and ideas are transformed regularly into products and businesses with broad economic and social impact. MIT’s interdisciplinary approach to education helps fuel this entrepreneurial activity, which is often sparked by interactions between students and alumni from MIT Sloan and the Schools of Science and Engineering. The resulting entrepreneurial ecosystem, which encompasses Kendall Square and areas far beyond, plays a vital role in the life of MIT Sloan and the Institute as a whole.
MIT Students have certainly made their interest and dedication to entrepreneurship clear. According to Roberts, when MIT Sloan first offered the Entrepreneurship and Innovation Track in 2007, 40% of the MBA class applied to participate.
Citing an article he read recently about the top 10 economies in the world, Roberts said, “MIT was the 11th.”
Nano-data and Now-Casting
The Analytics Revolution
Featuring Professors Roberto Rigobon and Dimitris Bertsimas
What do baseball, wine, and healthcare have in common?
More than you might think.
In particular, people are gaining new insights about each of the three subjects through statistical models that analyze data to make predictions.
That was the message conveyed at a recent presentation by MIT Sloan Professor Dimitris Bertsimas, who participated in the Exchange 62: Now and Next colloquium session entitled, “Nano-data and Now-Casting: The Analytics Revolution.“
Bertsimas described equations that help predict wine quality and baseball wins. For example, wine quality can be predicted through an equation that factors in winter rainfall, average growing season temperature and harvest rainfall. Bertsimas also explained that companies can analyze data from their employees’ healthcare transactions to better predict healthcare costs.
Of course, even good statistical models can’t anticipate everything. Bertsimas explained that last year, his baseball model predicted that the Boston Red Sox baseball team would win 90 games in the regular season—and they in fact won 89. This year, he predicted the Red Sox would win 101 games in the regular 162-game baseball season. But, one-quarter of the way through the season, the Red Sox had won only half their games so far.
“They are behind [the predicted record], I admit,” Bertsimas said. “But I am hopeful.”
Motivation and aspiration instead of doom and gloom
Featuring Professors John Sterman and Rick Locke
Joking that his students often refer to him as “Dr. Doom,” MIT Sloan Professor and sustainability advocate John Sterman made it clear to the gathered crowd that the time has come for motivation and aspiration—in other words, a lot less scolding and a lot more focus on solutions.
To achieve that kind of monumental change in the thinking around sustainability, Sterman and fellow faculty member Rick Locke talked about the unique approach of MIT Sloan”s Sustainability Initiative. The initiative focuses on a systems approach that is dedicated to research that matters, education and outreach, engagement in public policy, and, walking the talk.
In terms of education, both Sterman and Locke stressed that students need to understand that there does not have to be a tradeoff between economic development and sustainability. Said Locke, “Give students the tools and framework to understand the world the way it really is and to make a difference in it.” And students are doing their part, asking for and engaging in more and more sustainability related classes and projects. One hoped-for outcome is that as students are educated about how to achieve positive results, they will become more and more hopeful—and motivated to do more.
As for the alumni perspective, both Joaquin Bacardi and Bruce Jamerson were clear that sustainable business requires vision and commitment, but that it does not preclude growth and economic development. Bacardi had some particularly interesting insights about how corporate social responsibility and sustainability are not exclusively for new “modern” companies. At 150 years old, Bacardi has long been committed to this culture of responsibility, and has been recycling methane from their fermentation process for 30 years.
This discussion, along with every other Exchange 62: Now and Next session, took place in MIT Sloan’s new home, the greenest building on the MIT campus. In a fitting turn, the building’s architects, Moore, Ruble, Yudell, were in attendance at the sustainability session.
Reflections and Lessons on Organization Studies
Featuring Professors Edgar Schein, Lotte Bailyn, and John Van Maanen
How do one’s personal and professional lives intersect and influence each other? What motivates employee performance? How can managers effectively navigate the occupational and ethnic subcultures within their organizations? These are just some of the many questions that fall under the research umbrella of organization studies, a highly interdisciplinary field that draws on sociology, political science, psychology, history, and anthropology. During this session, three leading experts in organization studies—Edgar Schein, Lotte Bailyn, and John Van Maanen—reflected on their varied experiences within and beyond MIT and shared some of the most valuable lessons they’ve learned thus far about organizational dynamics. Discussion topics included organizational culture, leadership, work and personal life integration, and the application of research findings to public policy and change management.
The Challenges Facing Today’s Global Corporations
Perspectives from Deans Around the Globe
Featuring Deputy Dean SP Kothari and leaders from MIT Sloan’s partner Schools: Fudan University, Skolkovo School of Management and Sabanci University
For the past three decades, MIT Sloan has been a leader in developing strategic relationships with top universities and business organizations in countries such as China, Brazil, Korea, Russia, India, and Turkey. This morning at the Exchange 62 Colloquium, Professor and Deputy Dean S.P. Kothari lead a panel discussion engaging deans from three of MIT Sloan’s international collaborators: the Sabanci School of Management, the Graduate School of Business at Sungkyunkwan University, and the School of Management at Fudan University. The panel examined global trends in management practice and education as well as the advantages of researching and teaching in emerging markets.
It was very clear from all of the deans on the panel that one of the major goals of these collaborations is to insure that students learn to think more broadly, both about economics and management and the world at large—particularly when it comes to preventing another global financial crisis.
According to Dean Lu, the schools want students “to be prepared for the future and working in other countries—we want students to be visionary.”
Added Dean Boyacigiller, “Companies face challenges.” When that happens, we “want corporations in the hands of professionals.”