Category Archives: Leadership

Promoting inclusive entrepreneurship

Return on investment. It’s not just an economic measure. Ray Leach, SF ’02, CEO of JumpStart in Cleveland, Ohio, believes that social ROI is every bit as important—and as impactful as economic ROI in improving the quality of life of a region. A national thought leader at the intersections of public, private, and philanthropic partnerships, Leach strives to accelerate job creation and increase economic outcomes in neighborhoods, regions, and countries. Co-founder of four tech startups, he was also a founding member of the U.S. Commerce Department’s National Advisory Council on Innovation and Entrepreneurship (NACIE).

Leach founded JumpStart to work in tandem with government efforts to boost quality of life in Northeast Ohio through entrepreneurship. His diverse team of investors, marketing professionals, mentors, and advisors offers expertise to the founders of new or growing startups. CoverMyMeds, one of JumpStart’s portfolio companies, was just acquired for $1B+. With JumpStart’s nurturing, the company grew from three people to more than 500 in eight years.

Leach believes that to promote entrepreneurship, governments and nonprofits like JumpStart must first create an environment in which entrepreneurial ventures can thrive. JumpStart provides mentorship, education, and introductions to investors—but Leach says that to be truly effective, he and his team needed to get creative. “We have begun to focus on a broad variety of problems that prevent the community from thriving. We realized, for example, that a lot of startups and established companies need employees, but those companies often are located in industrial parks in the suburbs. The unskilled labor they would like to hire resides in urban centers. We need to find out how to bring the workers and the jobs together. In other words, we’re not just looking at job creation, but reducing unemployment.”

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What companies can learn from United Airlines—and from trust-based marketing

How does a company build and keep consumer trust—and more important, win it back when that trust has been compromised? Thanks to viral video, the world has seen United Airlines “involuntarily deboard” a passenger, to use the airline’s term, and drag that passenger kicking and screaming from a legitimately purchased airline seat. The result? In the days following the incident, customers cut up United credit cards, shares in United Airlines stock slipped by 4%, and the company’s market value plummeted by $1 billion.

How can a company like United that has lost consumer trust gain it back? MIT Sloan Professor John Hauser says that it’s not enough to tell consumers that they can and should trust a company. “It’s critical to actually prove, again and again, that a company and its products can indeed be trusted – and customers must be provided with tangible, observable proof that a company has changed its ways.”

Four years ago, Hauser, MIT Sloan professor and former dean Glen Urban, and Gui Liberali of the Erasmus School of Economics in Rotterdam published a study on trust-based marketing called “Competitive information, trust, brand consideration and sales: Two field experiments.” The team tracked four marketing strategies by an American automaker with an ailing brand. The company had suffered from decades of negative publicity over the quality of its products and was working on several fronts to correct public perceptions.

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In “The Conversational Firm,” MIT Sloan’s Catherine Turco Looks at Motivating a Millennial Workforce

Is it possible for a company to shed some of the key trappings of traditional bureaucracy and still be competitive in the marketplace? Catherine J. Turco, an associate professor of work and organization studies at MIT Sloan, went undercover for ten months at a fast-growing social media marketing company to find the answer.

In her illuminating new book The Conversational Firm: Rethinking Bureaucracy in the Age of Social Media, Turco takes an in-depth look at a young enterprise called TechCo, a pseudonym she uses to protect the identity of company and employees. She finds that TechCo has developed a deeply engaged workforce by promoting open company-wide dialogue. That sense of freedom, she notes, has contributed to a culture that is invested, innovative, and adaptable to change. She calls this new style of company “the conversational firm.”

One of the principal tools of the conversational firm, Turco reports, is social media. TechCo provides its employees—who are primarily millennials—with social media vehicles so that they can offer input into major business issues. Because millennials relate to the world through social media, she says, it only makes sense that they would feel comfortable relying on apps to register ideas and opinions in the workplace.

In The Conversational Firm, Turco leverages her interviews with 76 employees, her attendance at hundreds of company meetings, and insights from cultural and economic sociology, organizational theory, economics, technology studies, and anthropology, to portray a company that has found a way to be open without relinquishing control.

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Social responsibility must be a team effort

You’re a founder of a new enterprise and one of your top priorities is social and environmental responsibility. Your management team, however, can’t think of anything but the balance sheet.  By year’s end, your bottom line is healthy, but you don’t feel your new enterprise has contributed much to society.

It’s a common dilemma that comes down to a core disconnect that many founders don’t think to look for when pulling together their C-suites. But compatibility surrounding worldview, ethical issues, and dedication to social responsibility can be as important to the success of a business as professional qualifications.

Gustavo Mamão, SF ’11, founder of the Brazilian startup Flourish, which guides entrepreneurs in the creation of mission-driven organizations, has always focused on businesses that demonstrate how a company dedicated to a better world can also be profitable. But it’s an ethic, he says, that the whole management team must get behind. “The extent to which a business embraces sustainability and environmental goals is something that should be decided among founders and investors in the earliest days of the enterprise.”

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Stress—a Good or Bad Sign in an Employee?

Will the calm, cool, and collected applicant turn out to be a better employee than the person who exhibits stress? Traditionally, companies have tended to think so. In fact, many industries conduct stress tests with current and prospective employees to see how they perform under pressure. Those who remain calm during the simulations are commonly seen as the best fit for stressful on-the-job situations.

Juan Pablo VielmaMIT Sloan professors Juan Pablo Vielma and Tauhid Zaman and graduate student Carter Mundell beg to differ with the conventional wisdom. By measuring galvanic skin response (GSR) over the course of an increasingly difficult exam, the three researchers came to the conclusion that those who perform best under duress actually exhibit some degree of stress when the stakes are lower.

Lie detector technology predicts success

GSR, which is used in polygraph tests, measures changes in skin resistance owing to sweat—a relatively easy way to measure stress, as the body’s sweat glands are connected to the central nervous system. In their paper “Predicting Performance Under Stressful Conditions Using Galvanic Skin Response” Vielma, Zaman and Mundell note that, in the past, the study of stress has focused on understanding it as opposed to predicting it. “Everyone else was looking at, ‘Why are you stressed now?’ We stumbled on whether they would be stressed in 10 minutes.”

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Robert McKersie merges management theory and activism

What does advanced management theory have to do with social and economic justice? Everything, according to MIT Sloan Professor of Management Emeritus Robert B. McKersie. In his latest book, A Decisive Decade: An Insider’s View of the Chicago Civil Rights Movement During the 1960s, McKersie reveals how his convictions and his scholarship merged on the front lines of historic events in the civil rights movement—strategy sessions, marches, boycotts, and negotiations.

Robert McKersieMcKersie is best known for his pioneering work in industrial relations. His groundbreaking publications include A Behavioral Theory of Labor Negotiations (with coauthor Richard E. Walton) and The Transformation of American Industrial Relations, honored with the George R. Terry Award by the Academy of Management as the most outstanding contribution to the advancement of management knowledge in 1986. McKersie’s Strategic Negotiations: A Theory of Change in Labor-Management Relations (with Walton and Joel E. Cutcher-Gershenfeld) has been used effectively in the Northern Ireland peace process as well as in Israeli-Palestinian negotiations.

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Effective negotiation: Seven essential elements

“Only at MIT,” a few students grumbled. Only at MIT would you be relegated to a 400-student waiting list for a negotiations class—held during the winter break. MIT Sloan Professor Jared Curhan’s three-day crash course “Negotiation Analysis” was one of 700 courses—some for credit, some just for fun—offered during MIT’s legendary Independent Activities Period. IAP takes place every January and many students come back to campus a month early just to take part.

CurhanWhy were so many trying to get into Curhan’s class? A widespread acknowledgement that, no matter the field or industry you’re in, negotiations is a critical skill. The 80 students in Curhan’s class represented a cross-section of the university—28 different sectors of MIT, from nuclear science to management to urban studies.

Curhan built the not-for-credit mini-course around a framework developed at the Program on Negotiation (PON), an interdisciplinary consortium of researchers from MIT, Harvard, and Tufts. Curhan serves on the PON executive committee. The framework is actually seven elements essential to every negotiation:

1. Parties: Be aware of all the potential stakeholders—not just those who are sitting around the table with you, but those who influence and feel the impact of the decision.

2. Alternatives: Consider your best alternative to a negotiated agreement. Before you approach your preferred vendor to initiate a key transaction, solicit offers from backup vendors.

3. Options: Be creative in addressing the interests of all relevant parties. Before you ask for an extra week’s vacation, for example, anticipate and be prepared for the objections and know how you might address them.

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  Leadership  

Leading a green gas revolution: David Parkin, SF ’12, embraces innovation through regulation

Natural gas has been a source of energy in the UK for more than 200 years. The fuel provides one-third of all energy consumed for heat, and it accounts for four-fifths of total peak energy demand. National Grid UK—a government-regulated energy monopoly—is responsible for meeting nearly half of that demand, serving approximately 25 million gas customers annually. The company’s innovation team, led by Director of Network Strategy David Parkin, SF ’12, plays a key role in helping the country meet its targets for reducing greenhouse gas emissions.

David Parkin“It’s true that regulators help shape our business model,” notes Parkin. “But the government’s mandate also explicitly funds our research and development. It’s an environment that inspires a bit of envy among our colleagues in National Grid’s U.S. offices.” Even as they work to decarbonize the existing network, Parkin and his team are developing innovative forms of natural gas that can be injected into National Grid’s existing 284,000 km of pipes—a length that could circle the Earth six times.

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Keep your eyes on the prize—your priorities

Picture1How to measure success? It’s how close you map your life to your priorities, says MIT Sloan Professor Thomas W. Malone. It might sound simple, but Malone asserts that few of us live by our priorities. “The success of the vast majority of people in business—and in life—can be measured by whether they worked on the things that mattered to them,” he says.

Malone is the founding director of the MIT Center for Collective Intelligence and its predecessor, the MIT Center for Coordination Science. He was also one of the two founding co-directors of the pioneering MIT initiative Inventing the Organizations of the 21st Century. The five-year project explored emerging ways of working, and Malone and his team documented the results in the eponymous book, Inventing the Organizations of the 21st Century.

One of the best strategies for success, Malone says, is knowing when to say no. “Think of strategy as the prioritization of efforts. So often, on both a personal and an organizational level, we tend to do what’s easy, what presents itself, rather than what we really consider a priority. We have limited time and resources and must come to terms with those limitations. We need to continually make sure that our time and resources are focused on the things that contribute to the outcome we are working toward.”

Malone recommends making a daily list, prioritizing that list, and sticking to that sequence throughout the day. When making the list, he says, keep in mind your key goals and map the list to the goals. Thinking strategically sometimes forces you to leave behind busywork that makes you feel productive but does not advance your mission.

Make a mission statement to live by

The human tendency, Malone notes, is to default to reactive behaviors that cause us to lose sight of priorities, and he confesses to being as guilty as the rest of us on that score. He says he recently realized he had been planning for years to write a book about his work on collective intelligence, but the rest of his life kept getting in the way. He then put the project at the top of his priority list, wrote a successful proposal to a publisher, and is now working on the book, tentatively titled The Age of Collective Intelligence.

Of course, many of us have a tough time finding the bandwidth to think about our priorities, but the exercise is not a luxury, Malone says. “Take time out. Go sit on a park bench by yourself to make that list of priorities—especially if you have several competing goals that require careful consideration. It’s definitely useful to take an hour or two away from day-to-day demands every now and then to think about strategic questions on a higher level and develop a mission statement for your job—and your life. Mission statements that you live and work by keep you on track.”

Learn about Inventing the Organizations of the 21st Century.

Find out more about the MIT Center for Collective Intelligence.

 

Strategic thinking keeps the U.S. Air Force nimble in a time of volatility

Picture1Do you depend too much on rigid meeting structures? Do you cling to tightly scripted agendas? Give yourself a little time and space to think aloud, says Brigadier General Stacey Hawkins, SF ’11. He calls it “death by PowerPoint”—the tendency to organize all thinking around a prepared presentation, leaving little room for collective, creative brainpower. “A slide show should kick off thinking, not substitute for or define the boundaries of thinking,” he says. “Ideally, carve out at least 20 minutes of an hour-long meeting for open-ended discussion.”

Director of Logistics, Engineering, and Force Protection of the Air Mobility Command, General Hawkins has earned a reputation as a strategic thinker. Now in his 24th year of U.S. Air Force service, he is an alumnus of the legendary School for Advanced Air and Space Studies (SAASS). As an indicator of their elite skill level, SAASS graduates are frequently referred to as the “500 pound brains” of the Air Force. General Hawkins has been recognized for his efforts with such distinctions as the Legion of Merit and the Bronze Star and has served as special advisor to the Vice President of the United States for defense policy and intelligence programs.

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  Leadership  Military