THINKING FORWARD – Ideas for your work from MIT Sloan School of Management

THINKING+++ FORWARD

Ideas for your work from MIT Sloan School of Management | Office of Communications

+ THREE INSIGHTS FOR THE WEEK August 29 – September 4, 2021

1. Enterprise data is often incomplete, inaccurate, and poorly classified. Increasing its liquidity — that is, the ease with which data can be reused and recombined — can pave the road to monetization.

A recent research briefing from the MIT Center for Information Systems Research recommends that firms adopt best practices in data management — including metadata management, data integration, and taxonomy/ontology.

The goal is to ensure each data asset is accurate, complete, current, standardized, searchable, and understandable throughout the enterprise, according to authors Barbara Wixom and Gabriele Piccoli.

The briefing cites the example of Fidelity Investments, which is combining more than 100 data warehouses and analytics stores into one common analytics platform, built upon five foundational structures:

  • Universal IDs: Common identifiers for each data entity.
  • Single customer profiles: 360-degree views of customers that span all channels of interaction.
  • An analytics platform: A single, advanced cloud-based analytics platform to house and serve data on a large scale.
  • A central taxonomy and catalog: A repository of common terms and definitions of more than 3,000 data elements.
  • Governance: Strong oversight to enforce privacy, legal, contractual, and ethical policies.

 

2. Low interest rates and a surging stock market are helping to fuel a 158% rise in global mergers and acquisitions this year. Behind the scenes, researchers have identified three hidden trends that influence deal-making:

  • CEOs of acquired companies often take their own taxes into account when structuring deals — as opposed to paying attention to shareholder-level taxes, according to research by MIT Sloan professors Rodrigo Verdi and Michelle Hanlon, and Boston College’s Ben Yost.
  • When negotiating the price of an acquisition, buyers strategically disclose news to depress the purchase price. “If the acquirer can drive down the value of the target, they benefit directly,” Yost said. “One way to do that is by disclosing news that influences the target’s stock price.”
  • When companies are considering a deal, they rely on fairness opinions to ensure that a transaction meets a threshold level of financial fairness. (Litigation can arise in mergers if the shareholders of target companies believe the transaction price was too low.) In related research, Verdi, Yost, and co-authors found that target companies choose lower-valued “peer comparables” for these valuations — doing so specifically when the risk of litigation is higher.

 

3. We asked eight creators and leaders how they keep track of new ideas. A sampling of their techniques:

Before the COVID-19 pandemic, Yancan “Lydia” Li took notes and created lists on yellow legal pads or whiteboards. But since she and her colleagues at Generate Capital started working from home, Li, MBA ’19, said she’s switched to digital tools that allow for easier remote collaboration.

Shalanda Baker, the first-ever deputy director of energy justice at the U.S. Department of Energy, keeps track of new ideas on sticky notes on her desk. “I just have them out and sometimes will need to refer to them — and I’m like, ‘Oh, yes. I had that flash of brilliance!’ I track them on small pieces of paper,” Baker said.

Kerry Bowie, SB ’94, MBA ’06, is trying to cut back on his paper usage in an effort to be more sustainable. “I have a glass whiteboard. I’m starting to use Trello a lot more digitally,” said Bowie, founder of Browning the Green Space. “However, every now and again I take an 8.5 x 11 sheet of paper, and I fold and fold, and make it into fours,” Bowie said. “I just try to go through them and I rip them apart.”

Content from the: MIT Sloan Office of Communications Building E90, 9th Floor 1 Main Street, Cambridge, MA 02142

Questions and Comments: thinkingforward@mit.edu

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