Leading Change: 5 New Ideas From The MIT Sloan Management Review
Today’s business leaders face a unique set of challenges in order to satisfy employees, customers and shareholders. The latest information from MIT Sloan Management Review helps executives drive company-wide initiatives to improve diversity, company culture and supply chain visibility, and to derive more value from investments in data and artificial intelligence.
Address diversity by going beyond the numbers
The Nasdaq now requires publicly traded companies to meet gender and racial ethnicity goals for membership on its board of directors. This is a “narrow definition” of diversity efforts, says MIT professor Sloan because it says nothing about how female employees are treated or how the company supports marginalized groups.
Rigobon calls on companies to rethink diversity measures taking into account inclusion, access and treatment. This forces companies to assess their efforts to hire, retain and promote minorities, and to explore how a changing corporate culture tips the scales towards inclusion.
Sometimes initiatives will be on the numbers; for example, tracking exit interviews by gender and ethnicity to better determine what motivates employees to leave. However, the most impactful work extends beyond metrics. Goldman Sachs’ recent pledge of $ 10 billion in private equity and $ 100 million in philanthropic capital, to benefit 1 million black women, is less about numbers and more about investing in housing , health care, education, job creation, etc. to. This commitment will not meet the Nasdaq target, but it is much more likely to improve lives.
Read “Rethinking diversity measures in the financial sector”
Take a look at these 5 key factors that shape company culture
Americans are quitting their jobs in record numbers, in a phenomenon called the Great Resignation. The most important factor in keeping employees on board is the corporate culture, but in most companies there is a mismatch between their official core values and the elements of culture that matter to employees.
Analysis of over 1.4 million reviews posted on Glassdoor, lecturer at MIT Sloan and Charles Sull of CultureX identified the key elements of corporate culture that are most closely related to a company’s cultural rating. Some oft-touted factors, such as friendly coworkers, flexible hours, and manageable workloads, had no noticeable impact.
The authors examined over 150 cultural topics and identified 10 that matter most. Five stand out:
Respect for employees is 18 times as important as the average cultural theme and twice as important as the second key theme. Simply put, employees don’t like to be humiliated or degraded.
Solidarity leaders help employees do their jobs and support them when needed.
Job security may not be a typical business value, but if employees talk about layoffs, layoffs, or outsourcing efforts, it negatively impacts the culture.
Leaders living on fundamental values gain appreciation from employees who otherwise expect managers to say one thing but do another.
Advantages have a greater impact on cultural scores than compensation. Businesses need to be careful though, as frontline workers have different priorities than office workers.
Read “10 Things Your Company Culture Needs to Run Well”
Use these 4 strategies to encourage supply chain transparency
Government regulators, investors and consumers are increasingly demanding transparency from multinational companies on how goods are obtained and frontline workers are treated throughout the supply chain. Most supply chain transparency efforts focus on audits, but that’s just a starting point, says MIT Associate Professor Sloan and co-author Tim Kraft of North Carolina State University. And while technology can help, vendors in underdeveloped regions often lack the capacity and infrastructure to implement IoT sensors or blockchain.
To encourage supplier transparency, the authors make four recommendations.
- Offer carrots, not just sticks. Suppliers who participate in transparency initiatives may be rewarded with preferred status, better contractual terms or joint investments in capacity building. This helps shift transparency from a compliance requirement to a means of creating business value.
- Link visibility to efficiency. Companies with more visibility into supply chain operations are better able to direct resources where they are needed. In this way, they can address specific environmental or social issues and identify the right suppliers with whom to have a long-term relationship.
- Embed transparency in the value proposition. Companies that source raw materials or products from overseas in industries ranging from coffee and chocolate to clothing and cosmetics have captured market share by deliberately communicating transparency in their supply chain.
- Control your own destiny. If companies don’t like what they see in their supply chain, they can consider vertical integration. The purchase of a sawmill, coffee farm or factory and the establishment of new work practices and environmental standards put visibility in the foreground.
Read “How Supply Chain Transparency Increases Business Value”
Improve data liquidity to make data an asset
Many companies understand the importance of treating data as an asset. Unlike capital assets such as equipment and cash, the value of data doesn’t necessarily have to decrease over time. The key is to maximize data liquidity, which allows organizations to reuse, recombine and reanalyze data assets for process improvement, wrap analysis around existing products, and sell new products. rich in information.
It takes time for companies to reach that point of data monetization, notes Barbara H. Wixom, senior researcher at the MIT Center for Information Systems Research, and co-authors Gabriele Piccoli and Joaquin Rodriguez. When data remains trapped in localized business processes or closed platforms, when it has been replicated in multiple locations, or when it is otherwise inaccurate, liquidity is low. Resources are also needed to improve liquidity. The authors recommend starting with business-critical data assets – that is, all data that is relevant across the enterprise and that can create value in a number of ways.
The goal of data liquidity is to decontextualize data from its usual purpose and give it six characteristics: accurate, complete, current, standardized, searchable and understandable. Using a centralized cloud-based platform provides businesses with a single point for sharing, accessing, applying and maintaining data; it also has the advantage of better governance and security. By spending less time collecting and cleaning up data, data teams can implement new analytics use cases faster and spend more time solving business problems.
Read “Accelerated Data Monetization with Mission-Critical Data Assets”
Push AI into production from a leadership position
Many companies have struggled to achieve ROI on AI projects, in large part because AI remains at an exploratory stage. Thomas H. Davenport, member of MIT’s Digital Economy Initiative, and Ren Zhang of BMO Financial Group recommend six strategies to guide the success of enterprise AI initiatives.
- Partner with business units who are not only likely to use AI, but who also understand its potential.
- Select projects with tangible business value and a clear path to production.
- Build trust before deployment by working with business unit leaders to estimate costs and manage change.
- Focus on reusable components, which will reduce the cost and speed of future implementations.
- Use proof of concept projects to demonstrate value, present a solution, and pave the way for production.
- Build a data science pipeline to better manage individual projects as well as the organization’s overall AI roadmap.
Read “Achieve feedback on AI projects”