THINKING+++ FORWARD
Ideas for your work from MIT Sloan School of Management | Office of Communications
+ THREE INSIGHTS FOR THE WEEK
1. The only certainty about supply chain disruptions is that they’re here to stay, even after pandemic-era shocks subside.
At the recent 2022 MIT Manufacturing Conference, a panel of experts said one way organizations can build supply chain resilience is through incremental investments — in people, in relationships, and in the mapping of key supply networks.
“Often, a moderate level of investment will give you surprisingly high gains when it comes to flexibility and resilience,” said MIT Sloan professor of operations management Retsef Levi.
When deciding where to invest, Levi recommended looking at three domains of disruption response:
- Long-term survival, or having enough inventory to ride out a lengthy disruption to regular operations.
- Quick recovery, which includes things like finding alternative supply sources.
- Managing exposure — taking action such as postponing deliveries if needed, for example.
From there, organizations can design a portfolio of interventions that allow for a quick response wherever a system is most vulnerable. At that point, the benefit of flexibility comes into play, Levi said. “If you’re able to detect a problem a week before your competitors, that might give you a huge competitive edge.”
2. Companies are striving to remove bias from their recruitment and hiring processes and their performance evaluations. But new research from MIT Sloan professor Emilio Castilla cautions that efforts to standardize hiring and promotion metrics may be undercut by managers’ own evaluation experiences as employees.
In a recent article, Castilla and co-author Aruna Ranganathan of Stanford University show that a manager’s prior career experience can become a “blueprint” for how they assess and apply merit.
The researchers found that managers who had mostly positive evaluation outcomes in their careers tended to include actions and traits they associated with those positive experiences into their merit considerations. Managers who experienced mostly negative outcomes as employees tended to exclude those actions and traits when they assigned merit.
Since no two managers’ careers are exactly alike, that leaves a lot of room for interpretation in an area that advocates say needs more transparency and equality.
Organizations can take action to standardize how managers assess and apply merit, Castilla said. A list of concrete standards will allow for a “much fairer and [more] diverse way of rewarding and advancing employees based on their talents,” he said.
3. Place-based business coalitions can have a strong local impact — particularly when CEOs of local organizations take a sustained interest.
“It used to be that when CEOs got involved in community projects, they used the ‘charity’ model, which involved donating money to fix problems,” MIT Sloan lecturer Kate Isaacs and co-author David Brodwin write in Harvard Business Review. “Today, however, an increasing number are embracing the ‘solidarity’ approach, which involves partnering with community leaders in a two-way dialogue about change.”
Isaacs and Brodwin studied more than 40 such regional coalitions, which, when successful, can bring about change for workers, customers, suppliers, local citizens, and the businesses themselves.
“In these regional coalitions, [CEOs] are inquiring more deeply into how they build on their communities’ strengths, riches, histories, and unique assets,” they write. “In short, they’re doing everything they can to maximize the potential of a particular place and its people.”
