Articles

This article presents frameworks for companies considering a shift to global product development.

The director of MIT's Laboratory for Energy and the Environment considers the decisions companies have to make if they want to be sustainable—and challenges some of the conventional wisdom.

MIT Sloan Management Review's first annual Business of Sustainability survey revealed much about what executives are thinking and doing about sustainability-driven concerns right now--as well as what's impeding their attempts both to capture opportunities and defend against threats. The most widely credited leading thinkers at the sustainability and management intersection, though, wanted to explore something else: the ways that many fundamental management and strategy practices will be transformed by the pressures that sustainability issues are already bringing to bear. This article identifies eight significant ways that current management expectations and practices will be affected by growing societal and economic understanding about sustainability. Among them: how labor productivity can be dramatically increased by sustainably designed workplaces; how companies "bump into" sustainability-related choices, even when they don't look for them; how a company's sustainability profile will become a proxy for the organization's overall management quality; how innovation results are improved by pursuit of sustainability-related outcomes; how sustainability efforts within an organization lead to more productive collaboration across typical organizational silos; and how transparency and trustworthiness will become increasingly consequential to competitive success.

Management is too often idealized as work that should involve detached planning and strategizing.

Many companies have trouble making the transition from a failing business model to one that works. Often, one culprit is an inability to experiment.

While the protection of intellectual property, or IP, seems to be at odds with a company's pursuit of open innovation, or OI--the selective use of research carried out elsewhere--businesses in the know can align these two approaches. An appropriate IP strategy can actually be an enabler of OI activities. In fact, an increasing number of companies, such as International Business Machines Corp., are involved in interconnected "ecosystems"--critically dependent on cooperating with other parties to generate innovations and profits. The authors' research has found that the enabling function of IP depends on the specific circumstances under which companies engage in OI. Two variables in particular have emerged as critical determinants: the technological environment in which the business is active, and the knowledge distribution among potential collaborators. Each variable is presented as having two possible values. The technological environment, for instance, is either calm or turbulent. Concerning the nature of innovative knowledge distribution, external knowledge can be thought of as residing either with the few (in puddles) or with the many (in oceans). By combining these two dimension sets, and thus creating four possible scenarios, we provide a better sense of a firm's most appropriate IP/IO strategy. Depending on the category into which the company falls, IP plays a different role as an enabler of OI.

When it comes to tapping into the passions of employees, the opportunities and threats that sustainability presents are two sides of the same coin.

As sustainability-related pressures change the competitive landscape, what kinds of capabilities and characteristics will that landscape demand of companies that aim to thrive? Here's what Business of Sustainability Survey respondents and sustainability thought leaders say.

In 1994, when Interface Inc.’s founder and CEO Ray Anderson began to think about his legacy, it made him uneasy. Deep down, Anderson realized that the business model of the commercial carpet manufacturing company he had founded 20 years before was based on “digging up the earth and turning petroleum and other materials into polluting products that ended up in landfills” — not something he wanted his grandchildren and great-grandchildren to remember him by. So at age 60 Anderson broke with the old model and began anew. Standing up to naysayers (whose ranks included associates, suppliers and Wall Street analysts), he set out to transform Interface from a traditional business built on consumption and waste to one whose focus — that is, beyond profitable growth — would be zero waste and restoring the earth. Since the start of the journey, Anderson and his associates have confronted technical barriers that no one could have anticipated. But inch by inch, kilowatt-hour by kilowatt-hour, recycled pound of carpet by recycled pound of carpet, Anderson’s vision has moved closer to reality. In addition to becoming increasingly efficient in its energy and materials usage — for example, 89% of Interface’s global electricity and 28% of its total energy come from renewable sources — Interface prides itself on its ability to turn an increasingly large percentage of its carpet into new product. It is also proud of the influence its sustainability efforts are having on other companies. This article presents a timeline showing how Anderson’s “mental model” changed and how he and his company moved along the road to sustainability.

Companies need to help telecommuters overcome workplace isolation and limited visibility.