The MIT Sloan Fellows Program has educated some of the world's most influential leaders. With this blog we look to share the collective wisdom of our global community of alumni and faculty. Stay tuned to find out what's happening on the international frontier of business and industry.
Jobs. It may be the most loaded four-letter word in the American lexicon. The Great Recession shaped the national mindset so that job creation and economic development have grown into a veritable obsession. Nearly every political leader ranks the generation of employment opportunities at or near the top of his or her agenda. With all this focus on jobs, however, we have yet to develop a durable consensus about how to ensure that high-growth businesses survive and thrive. And unless they survive and thrive, they can’t very well generate new jobs.
To date, MIT alumni have founded more than 30,000 companies employing 4.6 million people and producing annual revenues of $1.9 trillion. That makes the Institute roughly equivalent to the world’s 10th largest economy. And those stats are ticking up daily. Seventeen of the young entrepreneurs that Forbes magazine recently named to its “30 Under 30” list for 2017 are MIT students and alumni. Their buzz-worthy startups are widely diverse, ranging from a malaria detection device to all-natural cosmetics. Here’s the line-up:
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.”
If there’s a universal malady that strikes entrepreneurs, it’s burnout. A startup can consume its founder, leaving no time or energy for a personal life. Leadership and decision-making suffer as well as relationships with families and friends.
Jag Gill, SF ’13, founder and CEO of the global apparel startup Sundar notes that when you’re passionate about your business, it can be difficult to turn it off. “It’s easy to lose track of other important aspects of your life. It’s essential to have personal rituals built into your day. The gym, family time, a regular dinner with a friend. I like to say that if your time isn’t measured, it’s not managed.”
Alan Yan, SF ’07, founder of several successful enterprises, including AdChina, which was acquired by Alibaba in 2015, says he always makes sure to choose life over business. Enterprises come and go, he says, but family and friends are forever. “People are not machines. We are not digital action figures.” Yan made a decision to sell AdChina, in part, because a member of his family needed to move to California for health reasons. “I believe—and I have experienced this—that when you have the right balance between your personal and professional priorities, you function better in all areas of your life.”
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.
Attention all disruptors. The nomination period is now open for the first MIT Media Lab Disobedience Award, which will recognize effective, responsible ethical disobedience across disciplines and around the world. The prize is a disruptive $250,000 in cash, no strings attached. The Media Lab’s objective in bestowing the award is to build awareness and support acts of productive disobedience.
Of course, the Lab is not looking for just any disruptor. The Disobedience Award will go to “a person or group engaged in an extraordinary example of disobedience for the benefit of society.” The organizers note that societies and institutions have a tendency to lean toward order and away from chaos. While structure has its place, they note, it can also stifle creativity, flexibility, and productive change.
“You don’t change the world by doing what you’re told,” says Media Lab Director Joi Ito. “The American civil rights movement wouldn’t have happened without civil disobedience. India would not have achieved independence without the pacifist but firm disobedience of Gandhi and his followers. The Boston Tea Party, which we celebrate here in New England, was also quite disobedient.”
One of the great hazards for any founder of a new enterprise, seasoned entrepreneurs say, is the distractions. Distractions in the form of opportunities and detours that can lure the founder away from the core mission in search of easy money or markets.
“When you start a new enterprise, check your distractions at the door and stay focused on your vision,” says Gustavo Mamão, SF ’11, founder of the Brazilian startup Flourish. “Remind yourself why you have launched the business and check each decision against that original vision. Entrepreneurship is a long and winding journey. You must continually keep your vision in mind and not get distracted by the shiny objects along the road.”
Alan Yan, SF ’07, is founder of several successful enterprises, including AdChina, which was acquired by Alibaba in 2015. He says he’s come to realize that even success can cloud vision. “Keep working toward your core mission. Keep your eyes on that prize. Very often when entrepreneurs experience initial success, they think they are invincible. In that flush of enthusiasm, they branch out in many different directions, following up on any attractive opportunity, losing sight of their key objectives and core mission. Remember,” he cautions, “It’s better to be a leader in one marketplace, than an idle dabbler in many.”
Innovation for its own sake is not necessarily innovative. If you want to start a successful business, says Jag Gill, SF’13, solve a problem. Gill, founder and CEO of Sundar, a global apparel startup, created her business because no efficient platform existed to connect the apparel industry to suppliers and manufacturers. “A clever idea is neither practical nor executable if it doesn’t solve an existing problem or fill a gap.”
Gill says that when she mentors budding entrepreneurs, she asks them to drill down on their motivations. “What’s your secret sauce? What’s unique in what you bring to the table? And what societal need are you meeting? A new business should never be a solution in search of a problem.”
Nadia Shalaby, SF ’10, a serial entrepreneur and CEO of ITE Fund, agrees. “Understand the market for your product before you ever begin. Who needs what you are planning to provide? How will you reach them? Are there enough consumers to make your product or service viable?”
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.”
Surround yourself with like-minded people. Bring in as many different perspectives as you can. Fuel creativity by promoting tensions. It seems that every expert who weighs in on the composition of the perfect management team offers up a different recipe. We polled a number of entrepreneurial gurus and asked them to tell us who should be at your right hand when you’re about to launch a new enterprise.
A diverse mix, says Greentown Labs CEO Emily Reichert, PhD, SF ’12. She says the head of a startup needs to entertain a steady stream of different perspectives. If your management team is diverse, she believes, you’ll have a better chance of generating fresh ideas and solutions. “The strongest teams are those that represent multiple cultural and professional perspectives—technical, managerial, marketing. That way, all facets of your business are being addressed during the decision-making process.”
Jag Gill, SF ’13, founder and CEO of Sundar, a global apparel startup, notes that many investors value CEOs who are outside the industry in which the enterprise operates. Although she had advised clients in the world of apparel and had exposure to the industry, Gill herself had a background in finance before launching Sundar. “One thing that someone from outside the industry brings to the table is an impulse to ask why. They haven’t become comfortable with the status quo, so they don’t just accept things the way they’ve always been. They are always asking, ‘Why do we do things this way?’ That reality check is exactly what a business needs to compete and stay healthy.”