THINKING+++ FORWARD
Ideas for your work from MIT Sloan School of Management | Office of Communications
+ THREE INSIGHTS FOR THE WEEK July 25 – July 31, 2021
1. In the wake of last year’s COVID-19 shutdowns, information technology groups pivoted nearly overnight, launching technology-driven initiatives to enable remote work and distance learning. New customer experiences and new online sales channels followed close behind.
The moment was not just an exercise in fast-tracking technology deployments, it was also a test of companies’ abilities to get employees and customers to embrace new forms of business engagement and interaction.
“Digital transformation is less of a digital problem than it is a transformation problem,” said George Westerman, principal research scientist for workforce learning in MIT’s Abdul Latif Jameel World Education Lab. “What’s changed over the last five years is that employees matter as much as customers in many cases, and you need to create a digital-ready culture to be fast enough to compete in this world.”
In a recent webinar for MIT Sloan Management Review, Westerman identified four areas where companies should focus their next-generation digital initiatives:
- Customer experience.
- Employee experience.
- Operations.
- Business model transformation.
2. When people think of digital platforms, they tend to picture business-to-consumer offerings like Uber and Airbnb. But a growing number of established firms are reaping the benefit of business-to-business platforms, said Geoffrey Parker, a research fellow and visiting scholar at the MIT Initiative on the Digital Economy.
These digital marketplaces allow firms to connect customers, technology partners, and other key stakeholders — which proved particularly beneficial in helping companies respond to supply and demand disruptions over the last 18 months, Parker said.
At the recent 2021 MIT Platform Strategy Summit, Parker and other speakers highlighted the impact of increased B2B platform activity in four sectors: finance, health care, heavy industry, and e-commerce.
Of particular interest is the rise of “super apps,” which bundle together a range of e-commerce services. In China, Tencent’s WeChat serves as a social network, a news source, a peer-to-peer payment service, and a COVID-19 vaccine passport, for example.
In the U.S., super apps would likely run afoul of government regulation, said Peter Evans, managing partner of the Platform Strategy Institute. Even so, “This super app model is getting a lot of attention, and we’re likely to see efforts by others around the world to follow this path,” Evans said.
3. With more than $50 trillion in capital, investment funds that take environmental, social, and governance considerations into account are big and getting bigger. Yet current ESG measurements lack transparency and primarily gauge the internal costs and impacts of company operations.
In a recent article for the World Economic Forum, MIT Sloan professor Alexander “Sandy” Pentland and co-author Julinda Gllavata make a case for changes that would make ESG efforts more effective. “To achieve the goal of more sustainable economic activities and projects, it is critical to have the right ESG data and to employ this data in a transparent and accountable manner,” the authors write.
The authors call for the adoption of:
- ESG metrics that involve consumers in working toward sustainable goals. Apps that track consumers’ travel and home energy impacts, for example, have already been shown to change behaviors.
- ESG metrics that measure the impact of companies on the communities in which they operate. “Development of ‘external ESG’ metrics that relate company operations to community well-being and sustainability … can help companies and investors be better citizens,” the authors write.
