http://mitworld.mit.edu/ MIT World media in category 'Business/Leadership'. en-us Tue, 24 Nov 2009 15:28:09 GMT Mon, 28 Sep 2009 00:00:00 -0400 http://mitworld.mit.edu/video/706 http://mitworld.mit.edu/video/706 In a lively discussion with Simon Johnson,
Lawrence Fish deconstructs the near collapse of the banking system and points out the multiple factors that have contributed to the financial crisis.

Topics in the discussion include the banks that did not fail, how Canadian and other countries' banking systems also did not fail, the political landscape of banking regulation, ethics, bonuses in the banking industry and the ethics oath signed by 50% of the students at the Harvard Business School. ]]> Tue, 11 Aug 2009 00:00:00 -0400 http://mitworld.mit.edu/video/697 http://mitworld.mit.edu/video/697 These panelists use the lens of systems engineering to focus sharply on some signature global challenges in finance, healthcare, energy and IT.

The system failure that undid the small but influential financial services industry was a few decades in the making, says John Reed. In the ‘80s, a sea change swept over firms trading hundreds of billions of dollars each day. The new mantra was “shareholder value.” Firms ditched time-honored rules of capitalizing trades and guaranteeing risk in order to build investor profits. The crystallization of this philosophy was the mortgage-backed security. Trillions of dollars went into “off-balance-sheet investment vehicles.” When the nation’s mortgage portfolio deteriorated, not just one node in the system collapsed, but all of them. To fix the financial sector, says Reed, “A systems view will be essential, including behavioral considerations, not just economics.”

There’s no point in saying U.S.healthcare is broken unless you can offer a vision. For Denis Cortese, this means designing a “learning organization.” Cortese maps out this organization’s goals: simple value, with “better outcomes, better safety, and better service at a lower cost over time.” His proposed system would focus on the patient’s needs in order to “raise the health of the entire population.”

Cortese doesn’t see a role for the government in his ideal organization. But there must be better metrics for determining value, coordination among large and small healthcare organizations, and “common principles in the payer domain.” Ultimately, we’ll need to define quality healthcare and set outcomes: “It won’t be perfect, but it will be better than where we are today.”

Nine billion people will inhabit the planet by 2100, and many of them will either be acquiring energy for the first time, or wanting more. This has “unpleasant if not catastrophic” implications for greenhouse gas emissions, says Steven Koonin. Powering up while securing affordable energy and minimizing emissions involves better modeling of the physical and biological climate system; overcoming the inertia of our current transportation and building industries; and improving the “patchwork” of our current energy grid. Koonin sees immediate opportunities to cut energy use in half in cities, but we “must bring policy up to speed” to make this happen.

Tackling global problems won’t be possible without an improvement in complex organizational systems, says Irving Wladawsky-Berger, which in contrast to physically engineered systems, haven’t progressed in the past century or so. Change is creeping in, though, as organizations manage increasing amounts of data with more integrated instrumentation and swelling computer capacity. Wladawsky-Berger sees new tools emerging such as cloud computing and networked data centers, leading to the standardization and customization of services for producers and consumers. He believes that the “merging of the digital infrastructure with the physical infrastructure” will lead to new ways of life, including smarter cities with smart traffic systems that reduce congestion and pollution. ]]> Fri, 17 Jul 2009 00:00:00 -0400 http://mitworld.mit.edu/video/690 http://mitworld.mit.edu/video/690 Cooperation may be making us “a little bit too nice” when it comes to innovation, suggests Fiona Murray. She believes there’s nothing like competition for injecting energy into the process of solving key innovation problems, whether in business or society.

Murray is convinced competition make ventures “more effective, more global, more inclusive and more democratic,” all important dimensions for business in a flattening world. She describes the rapidly expanding R&D expenditures of India and China, including the vast numbers of Ph.D.s these nations are producing in science and engineering. The corporate sector has found building global R&D organizations and collaborations difficult. In this challenging environment, where the advantage goes to those firms snagging the best scientists, Murray believes “prizes are complementary mechanisms” for attracting global talent. Just like historic rivalries among great artists (Nb., Titian, Tintoretto, Veronese), or the race to discover the structure of DNA, “fierce competition” can yield “dramatic productivity” and innovation, especially when the right rewards are at stake.

Murray cites the 18th century competition to invent a mechanism for determining a ship’s longitude, which offered a 20 thousand-pound prize. She jumps to the present, with the X Prize Foundation and its various competitions to solve engineering challenges and societal problems, such as the three-person reusable spaceship, and a 100-mpg car -- each with a $10 million prize purse. But it’s not just the money. Recent studies show that prizes prove alluring when they focus efforts and resources on a problem that people are already studying, offering fame and “putting fun back into innovation.” The fascination skews rational calculations, with competitors often spending well beyond the amount offered to the winner.

Corporations should adopt the prize mechanism, believes Murray, to help generate new ideas (such as new applications for Google’s phone); or to help solve very specific problems. Campus competitions are up markedly, she notes, which might be a distraction for students at places like MIT. Start small and inside the organization first, creating a shared bulletin board and offering small prizes, she advises, which will “generate energy.” Then take competition beyond the company. And don’t forget, “the work must be fun” in order to “get a richer set of people to participate.” ]]> Tue, 30 Jun 2009 00:00:00 -0400 http://mitworld.mit.edu/video/684 http://mitworld.mit.edu/video/684 There are ample opportunities for new energy entrepreneurs, these panelists agree, but motivation and certain kinds of know-how play key roles in bringing new ventures to fruition.

Idealism led Christina Lampe-Onnerud to “go into the energy space” at 23, but “inertia” surrounding the energy business may intimidate today’s entrepreneurs. Her Boston-Power company, which makes “green” lithium-ion batteries, has forged good relations with policymakers, and now hopes that these politicians will be “brave enough” to “put frameworks out 20 years.” In addition to long-term policy changes, Lampe-Onnerud is counting on a continuous influx of good scientists and engineers to drive her company forward. She encourages everyone with new ideas or the capacity to provide leadership to respond “to the biggest opportunity and threat we have.”

Jacques Beaudry-Losique warns would-be energy entrepreneurs they’re up against a highly regulated environment. An offshore wind turbine might require 39 different permits, and it can take as long as 14 years to get approval for a transmission line. Beaudry-Losique promises that government is now working “to better align interests so we can move faster bringing these solutions to the table.” Energy entrepreneurs should arm themselves with experienced staff who can navigate regulatory channels. They should also build consortia and partnerships with foundations, government and university labs, other manufacturers and buyers. The administration “is making a huge commitment to energy efficiency and smart buildings” and views wind, solar, geothermal, biofuels, as “all hot.”

Compared to entrepreneurial ventures in IT and life sciences, clean energy startups demand “more money, more time and more late stage risk,” says Matthew Nordan. Biomass or coal gasification technologies might require a billion dollars for a pilot plant, which “is a level of risk so high that …investors won’t sign that check.” Many technologies intended to solve one problem end up creating another, or encounter bottlenecks as they scale up, such as the limited supply of precious metals required for the magnets of wind turbines. Some entrepreneurs find success in unique niches, though, such as those seeking to recover waste metal byproducts of tar sand operations. But Nordan warns of a big shake up, as the recent discovery of a massive pocket of natural gas in the U.S. will make competition even steeper for new energy contenders like solar and wind.

Robert Metcalfe finds a lack of “human capital” in current energy ventures. The talented CEOs “who have started five companies” are in short supply in energy, which also haven’t widely adopted partnering as a useful model. To Metcalfe, the energy problem “looks more and more like a networking problem,” which demands a smart grid with lots of storage. This should present entrepreneurs with novel areas to explore. Large utilities may prove obstructive: “We must find ways to get around them, …either recruit them or destroy them.” He’s optimistic there will be breakthroughs in such technologies as fuel cells, and that “when we solve energy, it will be cheap and abundant, and we will use much more of it.” ]]> Tue, 16 Jun 2009 00:00:00 -0400 http://mitworld.mit.edu/video/680 http://mitworld.mit.edu/video/680 Linda Mason was originally going to make a case study of Bright Horizons, her $1.3 billion, early childhood care business, but reconsidered in light of the current economic crisis -- to the benefit of her audience. Instead, she takes up her own story as a recession-era entrepreneur who built several hugely successful, socially oriented ventures, navigating very real pitfalls and challenges along the way. Her “nonlinear path” yielded important life lessons, which she shares in this talk. Some highlights from her story:

Mason took a major detour from a planned career in management consulting when she and Roger Brown, who was to become her husband, left Yale in 1979 with their MBAs to work in Cambodian refugee camps. After a year, they returned to corporate life. But some time later, she and Brown experienced a watershed moment at a New Year’s Eve party, realizing their years of accumulating money and frequent flyer miles left them “depressed.” They determined that night to make a change.

Soon after, Save the Children called, looking for help dealing with the terrible famine sweeping western Sudan. Mason and Brown had 24 hours to make up their minds: There was “no time to make a list of pros and cons. It was a fork in the road, and we knew it was the path we were to take,” says Mason. This experience taught her, “It’s sometimes important to leap before you look.”

Management skills came in handy as the team set up a complex food distribution operation, one that challenged relief organization orthodoxy. This experience, which at the time “seemed crazy and risky,” fueled Mason and Brown’s next move in 1986: addressing the shortage of high quality child care in the U.S. The couple turned their Cambridge home into a start up headquarters, and developed a business plan, which they sold to enthusiastic VCs. But corporations balked at buying in, viewing the fledgling Bright Horizons team as “flaky Peace Corps types.” Mason, reflecting on this period, counsels “do your homework extremely well, then be very, very stubborn.”

As New England sank into a recession, and their idea faced collapse, the duo transformed crisis into opportunity. They summoned all their energy for a final effort, marketing onsite childcare to real estate developers looking to attract businesses. In 1990, four years after starting, Bright Horizons was in the black. The two ran the business for 15 years, when they moved onto other interests. “Discover your passions,” Mason advises, and combine them with your skills “to give your life meaning.” ]]> Mon, 08 Jun 2009 00:00:00 -0400 http://mitworld.mit.edu/video/676 http://mitworld.mit.edu/video/676 As old media die, new forms are emerging, but it’s not clear they will serve such vital civic functions as “helping people form publics,” as Pat Aufderheide puts it. These panelists point to promising experiments in “Public Media 2.0,” but caution that new media are not guaranteed to shore up democracy or invigorate public culture.

After two years of research, Jessica Clark has reframed the notion of public media as “outlets that provide context/content that allows publics to form around shared issues without political or corporate interference.” Instead of a centralized producer (old media), user-producers collaborate, forming networks with the use of digital tools. Some novel ventures that “break out of the old zones:” cell phone reporting in forbidden areas of war-torn Gaza, and streaming iPhone feeds of local news from U.S. cities.

Ellen Hume faults traditional journalism to some degree for its own demise, because it did not “connect the dots between news and action.” It stirred up emotions with stories but didn’t give people “a place to go” with their passion. In contrast, new civic medium SeeClickFix.com enables the public to report a problem in a community (from potholes to graffiti), spurring government response. HeroReports.org encourages people to report instances of kindness. Says Hume, “These new media offer enormous opportunity for creativity, and unleash the ability to participate in public.” But we haven’t yet entered the era of full media literacy, where people become “part of the public, rather than cruising through.”

Persephone Miel has been searching for “all that democracy we were supposed to get.” In spite of the proliferation of new types of reporting media, including news aggregator, author- and audience-driven web sites, Miel believes the “old media model still does unique things for us.” As traditional journalism fades, there’s no new media replacement yet for its “editorial intelligence,” its persistent, watchdog functions. Miel sees no evidence that “the volunteer energy of the blogosphere” will step into these roles. She notes several attempts at hybrid journalism forms: websites Spot.us, a nonprofit project for community-funded reporting; Global Voices, where correspondents in developing nations send out web dispatches; and Town Meeting 2009, a New Hampshire public radio web venture that reported on local governments’ budget process.

On the technology front, Dean Jansen has developed a free open source HD video player, Miro, so people don’t have to go through proprietary gateways or load specialized software to access web video content. He hopes to swell the ranks of user-producers in a more inclusive, participatory webspace.

Jake Shapiro’s public radio exchange, PRX.org, invites independent radio producers to connect with local public radio stations through his aggregating site. Citing the “current collapse of traditional forms,” particularly public television, Shapiro hopes to reconfigure public broadcasting. He says his marketplace enables content creators to find an audience, receive royalties from interested public radio buyers, create social networks, and potentially find alternative channels of distribution via podcasting. ]]> Thu, 21 May 2009 00:00:00 -0400 http://mitworld.mit.edu/video/672 http://mitworld.mit.edu/video/672 Susan Hockfield states that science journalism “is now, and in the decades ahead, absolutely indispensable.” As we confront global warming and health pandemics, science reporting must be sustained, Hockfield says, “in its rightful place, at the top of the profession and in the thick of the national conversation.” But dismal economic times throw doubt on this aspiration, as these journalists attest.

At the nation’s flagship newspaper, The New York Times, there’s a relentless commitment to high-quality journalism, whether print or digital, Jill Abramson maintains. “The fact that people have come to expect news on the web to be free has certainly challenged journalism’s business model,” she acknowledges, but The Times is better positioned than other publications to weather the changes. Indeed, “decades from now, the quality newspapers left may not be on paper, but journalism will continue to thrive,” Abramson asserts. In particular, this means ramping up science coverage, whether examining climate science or common medical treatments and health policy.

Abramson draws a clear distinction between science blogs, which are “often for the deeply engaged,” and “coverage pitched to the intelligent general reader.” Penetrating reporting with great breadth comes at a steep price: the paper must support reporters who dig deep into protected government files, are on perilous assignments, or must take a year to glean all dimensions of a complex story. She asks, “How do we prevent the collective muscle of investigative journalism from being gutted?” Whatever the answer (and one solution may involve nonprofit funding), Abramson sees a robust, continuing appetite for “trustworthy information on the world we live in.”

Cristine Russell sees a “best of times, worst of times” scenario for science journalism, with a glut of opportunities beyond print to chat and blog about science, or more frequently, health and fitness, and deep cutbacks in print science departments. Andrew Revkin admits the days when The Times could bring in $1 billion a year in ad revenue are gone forever, and hopes its staff “won’t be in a museum of recently extinct journalists.” But holes in science coverage mean “scientists have a greater responsibility to take the bull by the horns…and engage more fully in a conversation with society.” Ivan Oransky characterizes some online science sites as a kind of “curation,” with “a lot of people covering single events periodically.” He cites Twitter as a positive example of “democratizing coverage,” getting a new generation “to get back into science.” Evan Hadingham suggests we might be “in a golden age of popular science communication on TV.” Yet, in a 500-channel world, public TV science producers face “the ghettoization of science,” worried about how to mix serious science with entertainment. ]]> Wed, 13 May 2009 00:00:00 -0400 http://mitworld.mit.edu/video/668 http://mitworld.mit.edu/video/668 William Gerstenmaier knows the U.S. space program inside out -- both literally and figuratively. As a 30-plus year veteran of NASA, Gerstenmaier has managed the operational dimensions of the space shuttle, international space station, and other space flight missions. For this talk, he dissects a problem that recently grounded the shuttle, coming at it from the perspective of both an engineer, and a top-level manager with responsibility to the highest levels of government.

Gerstenmaier presents his case “as it unfolded,” for a behind-the-scenes view of how NASA keeps its aging shuttles aloft. His account begins in 2008, after a shuttle flight revealed something wrong with flow control valves essential to the shuttle’s hydrogen system. These valves are connected in a closed loop to the main engines, via a 170-foot length of pipe, through all manner of twists and turns, and frequently subjected to very high pressures. Gerstenmaier describes the series of tests his engineering teams performed, over long days, weekends and holidays, to determine what precisely had gone wrong, and the risks posed by potentially faulty equipment.

NASA engineers ruled out wiring problems, but discovered during an “x-ray of the plumbing” a chunk missing from one of the valves. They examined the problem from a structural dynamics standpoint: could the “flow through the plumbing” have made the valves vibrate violently? The same valves had been in use since 1981, but perhaps a “failure associated with an extremely resonant condition that could occur periodically” was responsible.

Gerstenmaier’s team shot particles through a simulated piping system and then used a scanning electron microscope to detect valve damage. They also analyzed historical failure data, which suggested that valve cracks might be a “high cycle fatigue problem,” and could therefore possibly occur during any flight. Gerstenmaier felt bound to “ground the fleet,” until engineers figured out a way of screening for damage in the valves pre flight.

A flash of unorthodox thinking led engineers (unbeknownst to Gerstenmaier) to buy a common bolt tester, which permitted them to get a comprehensive picture of the valves in working shuttles without removing or damaging them. After running numbers around flight risk, and many discussions with his engineers, Gerstenmaier felt they’d arrived at a rationale to resume flying.

Says Gerstenmaier, “I can tell you, I wasn’t looking out the window in Florida. At the shuttle launch, I was looking at data of the flow control valves and watching the pressures … I knew what I needed to look at in terms of the data. An engineer’s tendency comes through.” ]]> Wed, 06 May 2009 00:00:00 -0400 http://mitworld.mit.edu/video/666 http://mitworld.mit.edu/video/666 Climate change poses perhaps the premiere threat to coming generations, says Martin Madaus, but to avoid its worst impacts, we must confront the issue now. To that end, Madaus exhorts business leaders to focus immediately on building environmental sustainability into their operations, as he has begun to do at Millipore.

The challenge is figuring out how to stabilize greenhouse gas emissions at safe levels while expanding economies worldwide. In practice, reconciling these objectives involves squeezing more productivity out of each ton of carbon by a factor of 10. “The good news,” says Madaus, is that “this is actually doable.” Reaching this level of “carbon productivity” entails major public/private spending, but, says Madaus, “This is certainly a good investment, particularly when you consider the mitigation cost of climate catastrophe, which would be unbelievably expensive for all of us.”

While government must play a role in establishing regulations and incentives -- especially by imposing an unpopular but essential higher carbon tax -- industries of all kinds must integrate sustainability as a business practice. Madaus offers Millipore as an example of how “being at the cutting edge of environmentalism is a good business idea.” His company has focused on changes in products and packaging, and reducing waste in energy, water and waste.

In its biotech tool research and production facilities, Millipore figured out how to upgrade boilers, generators, lighting systems, compressed air piping, and use wind energy to reduce its emissions of greenhouse gases by 15% since 2006. “The amazing part of this, it was so doable, because there was so much inefficiency and waste of energy.” Millipore’s return on new infrastructure investment came in less than two years.

Millipore also developed compostable bio-plastic lab devices, recycling programs for customers, and paradoxically, a disposable product (replacing a large, stainless steel vessel), which ends up saving energy and water throughout its lifecycle. Beyond innovations in product lines and operational efficiency, Madaus says he wants “to make an impact on people’s lives so their habits change.” Millipore offers incentives for employee to use hybrid vehicles and to make their homes energy efficient, and encourages staff to come forward with ideas for sustainable living. “I wish we could make energy saving and eco-efficiency really cool and interesting; today it’s still viewed as a tool, a behavior change.”

These small steps are just the start, and Madaus sees a 20% reduction in greenhouse gases as entirely feasible -- and not just at Millipore. “If anyone tells you it can’t be done because they’re growing their company, they’re full of it.” ]]> Wed, 29 Apr 2009 00:00:00 -0400 http://mitworld.mit.edu/video/665 http://mitworld.mit.edu/video/665 In 1986, Hyundai’s first export to the U.S, the $4995 Excel, developed embarrassing quality problems, and the company found itself grist for late night talk shows. But John Krafcik recounts with pride Hyundai’s turnaround, from laughingstock of the American auto market back in the 1980s, to seventh best-selling brand in the U.S., and fifth largest car maker in the world.

By 1998, Hyundai’s name was so tainted in the U.S. that its market share fell to .4%, and the company was on the verge of pulling out altogether. But instead, says Krafcik, Hyundai determined to redeem itself, and win back car buyers with a focus on quality design and manufacturing, and with “America’s best warranty.” The 10 year, 100 thousand mile power train guarantee the company put in place, says Krafcik, was “an incredible clarifier for the engineering team,” forcing them to design systems for “infinite life.” Hyundai’s “top down, hierarchical management approach” proved critical, too. Chairman Chung Mong Koo combines “Bill Gates, Barack Obama and the Pope,” and “when he says we must do something, the company aligns well around that goal.” In 2001, Chung declared that Hyundai needed to beat Toyota’s quality standards in five years.

Unlike BMW’s approach of challenging the car owner, says Krafcik, the more “humble” Hyundai engineers focused on ergonomic engineering. An “obsessive customer focus” meant getting cars at early stages in the hands of real drivers, and using feedback to improve designs. Indeed, unlike Toyota, which imposes an engineering freeze at a certain point in development, Hyundai resolved to adapt to suggestions even late in the car development game: “If there’s an imperative for a late quality change, the system is adaptable to that change.” Also, Hyundai chose to design and build cars where it sells them. The result speaks for itself, say Krafcik: Hyundai’s achieved strong, consistent quality performance, rivaling the industry leaders globally.

Current challenges for the company involve developing a proprietary hybrid solution (with a novel lithium polymer battery) to achieve 35 mpg by 2015; and confronting “residual brand issues.” The economic crisis, which has reduced the world’s appetite for cars, could prove advantageous for “agile” Hyundai, believes Krafcik, which has been positioning itself prominently in the downturn, by, for instance, saturating the Super Bowl and Academy Awards with ads. Huge recent gains in “brand perception” have “Hyundai on a roll”, and Krafcik expects that the company’s persistence and passion will pay off, despite the grim times. ]]> Tue, 28 Apr 2009 00:00:00 -0400 http://mitworld.mit.edu/video/664 http://mitworld.mit.edu/video/664 A West Point start, army career, and a disciplined approach to distilling key life experiences has guided Robert McDonald through his 20 years at Procter & Gamble. McDonald recommends a deliberate system of self-examination that results in an articulation of beliefs, which he sees as essential to strong leadership.

McDonald describes an ongoing process of “getting in touch with my culture, experiences, education, family” to discover his values, which he writes down, and revises over time. He believes that “people in an organization like to work for a leader who’s predictable,” and whose expectations they understand. Some of McDonald’s key beliefs, drawn from such early experiences as the Boy Scouts, and the military academy, continue to hold true to this day. He feels that “leading a life driven by purpose leads to a more meaningful and rewarding life than meandering without direction.” This has meshed nicely, he says, with P&G’s statement of purpose: to improve the lives of the world’s consumers. Says McDonald, “I think my purpose in life is to help other people.”

Some other key beliefs: “Everybody wants to succeed, and success is contagious.” Nobody wants to fail, and a good leader puts people in the right jobs, doing work they are good at. This also means that leaders “take responsibility for things even when they’re beyond our control,” when plans go awry or collapse. McDonald also believes that “organizations have to renew themselves,” which means leaders must provide development opportunities, and recognize that success comes not just from being strong but being adaptable, prepared for change. The final belief he offers is that a true test of a leader’s character “isn’t what happens in an organization when you’re there, but when you’re not there.” Good leaders build sufficient capability around them, so the organization “can withstand your leaving.” Charismatic is fine, but “we don’t like heroic leaders.”

For those searching for purpose, McDonald recommends this practical written exercise: list organizations to which you belong, and their dominant values; note lessons learned from your family, memorable life and educational experiences; then turn this into a set of beliefs. ]]> Mon, 13 Apr 2009 00:00:00 -0400 http://mitworld.mit.edu/video/661 http://mitworld.mit.edu/video/661 The same institutional tenets guiding innovative management during good times needn’t waver during a downturn, even the present one, says Emmanuel Maceda. After two decades at Bain, one of the world’s premiere management consulting businesses, Maceda feels confident in his company’s practices and principles, which have guided both Bain and its clients through earlier economic booms and busts.

Bain constructs innovative leadership around three pillars: customers (clients), people and products, Maceda says. His company seeks a winning edge by establishing warm and lasting client relationships. At Bain, this means even top executives commit to working directly with clients, and assigning teams to the “client interface.” Clients are solicited for feedback through surveys and interviews, and come back to Bain for repeat business, finding satisfaction in its “collaborative culture,” says Maceda.

Bain’s organization has evolved around unique recruits, tapped from just seven elite business schools (including MIT Sloan). New staff are carefully trained and begin team building, which they continue throughout their careers, at all levels of the company. This costs Bain a great deal, but it’s necessary, says Maceda. The firm encourages activities that build “esprit de corps,” and touts a compensation model tied to the profitability of the firm. Bain also rewards the development of client products, whether in strategy, organization, M&A, which can be tested elsewhere then scaled up to produce new revenue.

This type of innovative leadership, says Maceda, could “apply broadly to most service-based organizations who want to make people the heart of a sustainable, competitive advantage, and to translate better products that meet clients needs better.” Such an organizational model holds true even or especially during times of crisis. “If you believe you have a strong competitive advantage, usually during times of crisis you can harness that and win.” Clients’ needs change “a bit” under economic duress. They may require help figuring out new strategies (such as cost reduction vs. aggressive growth), and seek new products in areas like cash management, and “quick hit revenue tools.”

Maceda points out significantly that in recent economic downswings Bain kept hiring, and its leadership took lower dividends, as the firm sought to retain key client and supplier partnerships. It’s not easy, but try to “nurture those relationships, even if you have to cut back in other places,” counsels Maceda. He concludes, “The fundamentals of being innovative leaders around client, people and products don’t change in a crisis.” ]]> Mon, 30 Mar 2009 00:00:00 -0400 http://mitworld.mit.edu/video/655 http://mitworld.mit.edu/video/655 The 2008 presidential campaign may have fused politics and entertainment once and for all. Three panelists and moderator Henry Jenkins discuss the nature and implications of this convergence.

To Johanna Blakley, political candidates who understand the meaning of style “can communicate volumes,” and to her eye, Barack Obama “has amazing skill.” His campaign, dubbed “brand Obama,” engaged celebrities and pop music, utilized the internet, broadcast and cable TV, and “rarely made a misstep,” says Blakley. In fact, McCain “desperately tried to make Obama look bad for being in synch with popular culture…but it ended up biting him on the ass.” Blakley also discusses her survey work with Zogby International, which creates political “typologies” of the American public not simply by asking about political affiliation but examining the intersection of political beliefs and entertainment preferences. The partisan divides among Red, Blue and Purple hold up in people’s cultural affiliations. Whatever the ideology, the “entertainment experience… always ends up leaking into real lives.”

While at the Democratic Convention, David Carr was conversing with Craigslist founder, Craig Newmark and found “a kid to my right live blogging our conversation. I thought, it doesn’t get any more meta than this.” The “miracle” of the Obama campaign, Carr believes, was how it “organized itself,” through an “adhocracy self-assigned by geography and expertise.” People picked tools provided by the campaign that suited them. Blogging, videos, and mash-ups emerged without much campaign oversight. Says Carr, it “became kind of a style thing, an expression of who you are.” People didn’t call and ask for support so much as ask, “Have you seen this video by will.i.am. --let me send it to you.” Watching Saturday Night Live and Tina Fey’s Sarah Palin became an “expression of cultural identity which became a part of political identity. “ Citizen-generated content took over this campaign, and isn’t going away for the next election cycle. But, warns Carr, this “mass niche of like minds,” can be “a tool for marketing democracy and/or fascism.”

Stephen Duncombe recalls a brilliant move by Obama after a bruising debate with Hillary Clinton: he brushed the shoulder of his suit jacket, quoting a music video by rapper Jay-Z, “Dirt Off Your Shoulder.” He instantly distanced himself from Clinton on the cultural level, and was embraced by American youth, who remixed the Obama moment, and unleashed it on the Web. To Duncombe, this moment crystallized how politicos “can start to think about popular culture in a productive way.” Pop culture is a “unique laboratory of fantasy that can be explored, understood, mobilized and actualized through political practice.” Obama succeeded by imbibing a variety of pop culture icons and ideals and said, “I’m a mixed race, latte-sipping urban guy who likes basketball and hip hop.” Duncombe says that the conflation of politics and culture need not degrade politics, if people “do it with integrity, with honor.” ]]> Sun, 22 Mar 2009 00:00:00 -0400 http://mitworld.mit.edu/video/654 http://mitworld.mit.edu/video/654 “Paint it Black” is all about red -- the mountain of debt challenging the viability of all the nation’s institutions. James Poterba takes a scholarly approach to moderating this detailed discussion of the unfolding economic collapse, its ramifications on business and the possible impact of governmental remedies.

“From the standpoint of economic analysis,” says Poterba, “this appears to be a once-in-a -generation or perhaps longer global storm.” He expands on this statement throughout, with forays into macroeconomics, credit and equity markets, the tools historically and currently wielded by government to interfere with economic crises, and an occasional joke (at the expense of economists). He engages his speakers in their areas of expertise.

Alan Cohen discusses how the practice of “shadow banking” helped trigger the subprime mortgage crisis. Non-financial institutions invented ways to package mortgages, slicing and dicing them into securities that could be traded without oversight. These credit derivative instruments existed without adequate capital backing, and so were exceedingly risky. Cohen also blames rating agencies for becoming complicit in the game, talking to investment bankers “about what was necessary to get AAA.” There were warning signs, says Cohen, as early as 2006 of “deteriorating housing numbers, but … the rating agencies didn’t downgrade.” Suddenly, in 2007, these packaged, unregulated securities lost their value, and banks, faced with debt, ended up selling assets under pressure.

Cohen says that TARP funds won’t necessarily free up credit for small business or the mortgage market, since banks and other institutions are still trying to pay off vast debt. In this over-leveraged environment, no financial institution trusts another, and companies seeking loans must demonstrate they represent extremely low risk. Some lenders worried about “getting hurt by entrepreneurial activity” may ask for rights, or participation, in the venture. “To attract the more disciplined lender, you must provide more bang for the buck,” says Cohen.

David Tabak reckons that volatility poses the premiere challenge for small business. At a time of great flux for all markets, firms must attempt to calculate what their patents and investments will be worth months and years down the road. He remains guarded about whether government intervention will calm the waters. For one thing, bank stress tests must decide how much value actually exists in different tiers of assets held by banks -- including loans to small business. Some banks may be partly nationalized if they fail to meet capital reserve requirements. This won’t fuel stability and growth in the private sector. Also, Tabak sees some businesses holding out for a second round of government funding, or for investment tax credits.

Tabak’s advice for the government: “Put in an option clearing corporation, and ban credit default swaps for speculators.” To businesses, Tabak says, “Get your financial statements right,” and “ask, ‘What do I need in the short and long run, what are the differences between the two, and plan out.’” There are strong opportunities for those who survive. ]]> Mon, 09 Mar 2009 00:00:00 -0400 http://mitworld.mit.edu/video/652 http://mitworld.mit.edu/video/652 Cellphone and mobile communication aficionados (not to mention the rest of us) appreciate that our favorite tech gadgets increasingly resemble props from Star Trek. A shout out then to Irwin Jacobs and Qualcomm, the company perhaps most responsible for such astonishing gear.

In his talk, Jacobs narrates his journey from MIT, as a faculty member in the early 60s, to California and his initial entrepreneurial venture, Linkabit. Jacobs and other MIT talent applied information theory to projects for NASA and JPL, including coding for deep space probes, and processor designs. Before Jacobs moved on, Linkabit had come up with the idea for satellites that enabled live data communications between headquarters and retail stores for both Wal-Mart and 7-11. The company’s designs led to the direct broadcast satellite systems for XM and Direct TV. Its digital scrambling system fed digital technology into TV transmissions.

The even bigger story for Jacobs (and the world) involves his next venture, Qualcomm (for Quality Communications), launched in 1985. This fruitful collaboration among MIT and Linkabit graduates launched the wireless telecommunications revolution. Qualcomm first gave the trucking industry OmniTRACS, a satellite-based commercial mobile system, and then dreamed up a technology for wireless and data devices -- Code Division Multiple Access (CDMA) -- that has revolutionized business and personal communications.

Qualcomm made it possible for a multitude of users to share a confined spectrum space, and then for high speed data to fit comfortably alongside voice applications. There are four billion mobile subscribers around the world, says Jacobs, of which 100 million users get voice plus data. Even in these dire economic times, new subscribers are growing, and he predicts six billion subscribers by 2013.

Qualcomm’s hard at work optimizing how data and voice share transmissions, making new applications possible (and affordable) worldwide. The goal: wireless broadband connectivity for all, and to each his or her own Smartphone or Kindle. As cellphones proliferate and merge with mobile computing, we’ll be able to keep tabs on each other via GPS, says Jacobs. He believes phones “will quickly replace credit cards, even replace money.” He sees particular opportunities in telemedicine, where phones armed with sensors can transmit patient information to specialists in hospitals, who then zip back treatment recommendations. Jacobs takes pride in Qualcomm’s efforts to leverage wireless cellphone tech for social benefits: helping Indonesian women in business ventures; bringing farmers and fishermen a way of determining market prices for their goods without a middle man; and bringing in 3G phones for kids without computer capability in China. ]]> Fri, 06 Mar 2009 00:00:00 -0500 http://mitworld.mit.edu/video/651 http://mitworld.mit.edu/video/651 MIT President Susan Hockfield hails a new era of collaboration between the Institute and China, and Zhou Wenzhong, Ambassador Extraordinary and Plenipotentiary of the People's Republic of China, discusses the larger relationship between his country and the U.S., particularly in light of the economic crisis enveloping the world.

Chinese students have been matriculating at MIT, says Susan Hockfield, since 1876 -- almost as long as the university has been around. But the 1990s saw the start of a broader and deeper institutional commitment, with Mandarin courses at MIT, and a program to send MIT students to intern with Chinese companies. Now, the relationship is deepening, with an MIT-China initiative to spark research ideas and collaborations, particularly around energy and sustainable development, robotics, and healthcare; and a China Forum Lecture series. Hockfield believes partnerships between MIT and the People’s Republic of China “are virtually unlimited.”

In the 30 years since China began economic reforms, Zhou Wenzhong recounts, its domestic economy has grown roughly twice as fast as the world economy. Its GDP has expanded from the equivalent of $216.5 billion to $3.28 trillion. The ambassador reminds his audience that in spite of such gains, China remains a developing country, with an enormous population whose per capita GDP is less than 1/17th of that of U.S. citizens’. It is “a long way from basic modernization and prosperity for all.”

Much of China’s growth stems from a quadrupling of international trade. But intense globalization, an “irresistible reality” for all nations, poses major challenges, especially now with the rapid onset of profound economic malaise. China is moving to respond to this crisis, and looking beyond it, to help “establish a new international financial order that is fair, just, inclusive and orderly, fostering an institutional environment conducive to sound global economic development.” The government has set out a comprehensive package of reforms to keep the country’s economy running in hard times. The remedy, loaded as it is with tax cuts, social investments, restructuring of major industries, and energy conservation measures, may ring a bell for the U.S. public.

China also looks to its global neighbors in facing the immediate economic challenge, says Zhou Wenzhong, and in responding to such other pressures as terrorism, proliferation of WMD, climate change, epidemic diseases and national disasters. He hopes for a strengthening of U.S.-China relations, predicated on an approach steeped in the “long-term and strategic perspective.” The U.S. and China should “shoulder greater shared responsibilities,” promote common interests in trade, counterterrorism, law enforcement, science, technology and young people. China asks that the U.S. treat it as an equal, and respect such core interests “as the Taiwan question and Tibet relation matters.” With mutual trust and dialog, he concludes, “A new era offers unprecedented opportunities…to build a better future.” ]]> Tue, 10 Feb 2009 00:00:00 -0500 http://mitworld.mit.edu/video/644 http://mitworld.mit.edu/video/644 A trio of graduates from MIT’s Technology and Policy Program (TPP) discuss their career paths, bumps and all, and offer guidance to current students.

Having studied as a mechanical engineer, Eric Amundsen “never in life thought (he) would be an attorney.” Then he “stumbled across patent law.” He attended a graduate student seminar where he was forced to rank his likes and dislikes. When he analyzed his priorities, he discovered that engineering was not the best fit, while patent law “matched up close to 100%.” Amundsen feels vindicated in his choice. He continues to put his technical expertise to good use, enjoys helping clients “get value out of their IP,” offers strategic advice, and negotiates difficult problems. Whatever the situation, Amundsen notes that “it often comes down to relationships: You can be the best attorney in the world but if (clients) don’t like talking to you, you’re not going to serve them well.” From Amundsen, this parting lesson for career-builders: “Pay attention when you get a sure gut feeling that something’s not right.”

Karina Funk “went from engineering, to dabbling in policy, explaining science to policy-makers, to business and operations, to finance and investing.” Funk credits MIT with her ability to open doors to many fields, because “unlike other academic environments,” the MIT culture encourages combining disciplines. After developing an interest in health and the environment, and realizing she was not going to make a difference in the policy world, Funk turned to business. She describes an early experience that resulted in an important insight she’s since carried with her. Two weeks before starting a graduate degree in physics at Berkeley, she realized she “didn’t want to be a lab rat.” (She found the TPP program instead.) She tells her listeners: “You figure out what you don’t want to do. I’m not kidding when I say some of my best decisions have come very quickly when I’ve been literally stopped dead in my tracks, disgusted or disappointed by the path ahead of me. I know I have to make a change.”

Within the context of an “elevator pitch” to launch an entrepreneurial business school in Asia, Ajit Kambil describes some milestones in his career, and his philosophy. A cancer survivor, Kambil has learned “you live every day; make the most of it.” For him, this means less emphasis on success, and more on “what you are going to give.” His TPP focus, around information technology, engaged him in further studies of how information systems affect organizations. Kambil has been in academics; started various companies, “some duds, some successes;” and written a book on auctions and markets, looking at why the Dutch “are so good at flowers.” He learned that certain problems that crop up in life take a long time to answer. His recommendation: “Persist.” He also suggests “setting bold goals” to stretch yourself and others to a higher purpose, building a network with a few good people, and preparing before taking the lead on a new challenge.]]> Sat, 07 Feb 2009 00:00:00 -0500 http://mitworld.mit.edu/video/643 http://mitworld.mit.edu/video/643 W.L. Gore’s products alone, such as the eponymous GORE-TEX® water- and windproof fabrics, and a multitude of unique medical, electronic and industrial materials, might seem to assure the company’s success. But Terri Kelly attributes the 50-year-old company’s achievements not just to engineering prowess, but to its singular culture.

This privately held company, with $2.5 billion in revenue and 8500 staff worldwide, began as an electronics company in Bill and Vieve Gore’s basement. In 1969, their son, Bob, discovered a polymer that was strong, chemically inert, biocompatible and water repellant, with nearly infinite applications. But as Kelly recounts, the Gore family determined not just to develop technology but to grow their company around a set of fundamental beliefs. This philosophy underlies Gore’s flow of innovations and sterling business results, says Kelly.

Gore encourages belief in the individual, organization around small teams, recognition that people are in the same boat, and that all must “take the long view.” Bill Gore “hated policy manuals and bureaucratic ways of telling the organization what to do,” says Kelly. In practice, this means, among other things, that employees are equals (associates), who decide what projects to work on based on “their passion,” says Kelly. The company discourages plants with more than 250 associates, to promote intimate communication and team work, and though others “look at this as an unbelievable expense, we see this as a catalyst of growth,” says Kelly.

At Gore, new hiring can last for months, because teams conduct interviews; and “everyone has dabble time.” Rather than encourage chaos, these methods lead to discipline, insists Kelly, leveraging the strengths of Gore’s core technology. The discretion to explore “is earned over time,” and associates commit to the success of a product. They are empowered to experiment, and not punished for failing. Compensation is determined by peer review, and is based on contribution to projects.

Kelly is one of the few individuals at Gore with an actual title; leaders emerge by expressing a vision in clear enough terms to inspire others to follow. Leaders must also do a lot of explaining about decisions and actions. All this talk might seem an encumbrance, but upfront work makes complex projects run much more smoothly, assures Kelly. She says the key question is, “Do people like to be part of something greater than their individual contribution? If they get that part right, all other pieces fall into place, which helps us create an innovation cycle at Gore.”

]]> Fri, 30 Jan 2009 00:00:00 -0500 http://mitworld.mit.edu/video/641 http://mitworld.mit.edu/video/641 Ellen Hume predicts a “good news conversation” with her MIT Museum crowd about the future of news, but all participants end up working very hard to find a silver lining in the dire situation facing newspapers and other traditional forms of journalism.

The business model, Hume explains, is deeply broken for newspapers, big and small, and other mainstream media that people count on. Advertising -- the very idea of the classifieds -- is going extinct, vanquished by sites like Craigslist and Cars.com. The important work that journalists do, collecting, analyzing, contextualizing and disseminating information, and providing common frames of reference, has begun to migrate to the web and elsewhere.

This isn’t all bad, believes Hume, because instead of relying on experts who deliver information in a “top-down form,” we get participatory journalism, where users can respond to and exchange information. This “changes power relationships.” Agency has shifted from elites who create the flow of information, to citizen journalists. Users stirred by a news story have opportunities to react via social networks, videos, blogs, “creating a sense of community.” This, says Hume, enables “a new sense of public space.”

But there are dangers in relying exclusively on these new sources of information. Not all citizens have the expertise of a professional journalist, who’s spent years learning about subjects and sources. “We may lose verification....context….transparency….a sense of independence…and the big megaphone of mainstream media.” Yet we may also gain some things: authenticity, from eyewitnesses; continuity of attention to a story; and verification, via crowd sourcing. Hume thinks it’s possible to replace some of the functions of traditional journalism with the resources of new media, which can build massive online archives, collect from continuously expanding sources, visualize data in arresting ways, and engage its users.

Web journalists must accept the responsibility of “separating wheat from chaff, paying enough attention to know if something’s credible or not, when it’s awfully hard to tell.” It’s going to be essential, Hume says, to “figure out how to build media literacy skills into all curricula.” At the same time, there may be some hope for newspapers: Hume cites website Spot.Us that permits people to make micropayments to cover worthy community stories; ProPublica, a consortium of heavy-hitting print journalists funded by philanthropy; and The New York Times multimedia venture. Ultimately, we may have to pay a premium for a good newspaper, on or off the web, while “the dynamic and exciting future of news…moves to the internet, cellphones and mobile devices.” ]]> Sun, 18 Jan 2009 00:00:00 -0500 http://mitworld.mit.edu/video/636 http://mitworld.mit.edu/video/636 In his unassuming way, Craig Newmark believes his eponymous website might just help nudge people toward greater civic engagement. While Craigslist.org “is a simple platform where people help each other out,” focusing on everyday needs like getting a job or an apartment, it is also a profoundly collaborative venture, with political potential.

Newmark outlines the Craigslist success story, which began as a hobby for him in the early 1990s. Newmark quickly detected the Internet’s social networking possibilities, and built an email list for friends “to get the word out on cool events, arts and technology.” He developed an instant fan base, with people suggesting new items to add to the list like “stuff to sell,” and he soon felt encouraged to expand. His name for the site was “SF Events,” but friends nixed that title, infinitely preferring their own version: “Craig’s List.” Says Newmark, “I had a brand already, and it was personal and quirky. I didn’t know what a brand was at that point, but I learned and they were right.”

By the end of 1997, the site was receiving one million page views per month, but was still being run on a volunteer basis. Newmark was doing software and customer service, and recognized he could not also provide strong leadership. As a self-professed nerd who “lived the Dilbert life,” Newmark grasped that his hobby had grown too big to manage on his own, so in 2000, after having formally incorporated, he hired a CEO, and threw himself into customer service, corporate governance, and staying on top of technological innovations that could enhance the website. Craigslist is now approaching 13 billion page views per month.

Through this explosive growth, Newmark has remained true to his business values: “We can do well as a company financially by doing good stuff for people.” He has no plans to sell Craigslist. “There’s nothing altruistic, noble or pious about it. We figure once we make enough money to live comfortably and provide for the future…it’s more satisfying to change things.” He’s been involved for years “with a guy named Barack” and views himself as a “community meta organizer,” using the internet to allow face to face communication on a scale of tens of millions. Some prominent interests: using social networking to spark volunteer national service; making government more transparent; shining a light on campaign financing, and helping out returning Iraq and Afghanistan vets and their families. ]]> Mon, 05 Jan 2009 00:00:00 -0500 http://mitworld.mit.edu/video/630 http://mitworld.mit.edu/video/630 “I’ve drunk kava in the South Pacific and rubbed noses with natives,” says William Fallon. “I’ve enjoyed tender baby camel as a delicacy. I’ve met presidents, kings, prime ministers and many ordinary folks. I’ve done a lot of things. That was yesterday. What matters is today and tomorrow.” Now, says Fallon, is the time for all Americans to get down to business addressing the key crises confronting them. And he does mean ordinary Americans, not just the next president.

As a naval man with 45 years of experience dealing with conflicts all over the world, Fallon figures that the major challenges facing the nation will be at minimum “daunting,” but they are not beyond our collective capability. There’s the financial crisis; nuclear and other threats from Iran, North Korea and wide-ranging terror organizations; the competition for resources and the issue of climate change; and the ongoing conflicts in Iraq and Afghanistan. All these issues are global, and increasingly interconnected, notes Fallon, and addressing them will require “close cooperation with other nations.”

The problem is that the U.S. has lost much credibility internationally in recent years, says Fallon, and so our leaders will have to reestablish the trust and confidence the rest of the world once had in our country. While top politicians can begin a process of diplomacy and cooperative engagements with other nations, Fallon thinks it’s equally or more important for ordinary Americans “to get our domestic house in order.” He’s of the opinion that the individual behaviors of Americans “have contributed to a general malaise,” and only by addressing these on an individual basis will our nation be able “to reestablish its prestige and influence for the betterment of a very interdependent world.”

Fallon focuses on the U.S. education system, which apart from world class universities like MIT, “wallows in underperformance … releasing millions of alleged graduates who can neither read nor write, understand math beyond elementary levels, find any place on a map….” Add to this “mediocrity” the fact that Americans feed their “self-indulgence in personal material goods” while starving such critical infrastructure as bridges and roads, which enable daily activities. Our critics rightly view us as “increasingly self-centered and heedless of the interests of others,” notes Fallon. It’s time to set our priorities straight. The U.S. has the “human capital, traditional values and the immense resources to take on and fix any of these problems.” What remains is the “willingness to do the job. Let’s get going,” he concludes. ]]> Mon, 08 Dec 2008 00:00:00 -0500 http://mitworld.mit.edu/video/624 http://mitworld.mit.edu/video/624 The 2008 U.S. Presidential election was in many ways a watershed event, including the impact of religion on candidates and voters.

Shaun Casey finds some parallels to 2008 in 1960, when John F. Kennedy eventually overcame enough Protestant resistance to become the first Roman Catholic president – just as Obama campaigned to overcome American racism and become the first African-American president. Kennedy applied a “technical rationality to most problems,” says Casey, so he hired staffers to help him present his faith in an unthreatening way. Obama also put together a staff to deal with such “religion problems” as Reverend Wright, the notion that he was a “Manchurian Meccan candidate,” or even worse, “a secular Harvard Law School educator who’s really an atheist.”

Alan Wolfe observes that in the 1960 election, people were tired of eight years of Republican power, and found a young Democratic challenger appealing. The candidate with the real religion problem then was Richard Nixon, who “essentially had to hide his religion: he was Quaker.” Says Wolfe, “What a horrible embarrassment” for a party that “believes in aggressive military posture.” What Wolfe finds of greater interest is the emergence, after the ‘60s, of “the religious litmus test.” He hypothesizes that Jimmy Carter introduced the concept, offering himself up as a man of God in whom a post-Watergate era America could trust. One of the Democrats’ more “admirable” candidates thus “opened the Pandora’s box for Republicans.”

Catching up to current times, Wolfe debunks Karl Rove’s mystique as master manipulator of the religious right, claiming that Bush actually lost the 2000 election, and that Rove was “simply lucky” in 2004. McCain deployed the Rove strategy in 2008, and “it’s been a disaster for him…” Also, McCain is simply “awkward speaking about religion…he’s tone deaf.” In contrast, “Obama the ‘Muslim’ is steeped in the Christian language.”

Casey believes Rove and George Bush “elevated religious outreach to an art form not seen in American politics,” marketing a candidate who was “a specific kind of Christian possibility independent of the reality in that candidate’s life.” Wolfe thinks conservative Christians gravitate to the Republican Party now because they’re “working in big corporations…they’re wealthier.” They see themselves as a marginalized minority group. Wolfe says the “real inheritors of the ‘60s are the Christian right. They’re victimized, oppressed, and …they’re a movement of insurgency.”

Both panelists discern a new sensibility emerging in the evangelical movement. Young people don’t clothe themselves as much in what Wolfe calls the “highly Calvinistic, punitive approach,” and instead embrace openness around such issues as poverty, climate change and genocide. Casey believes this new religious cohort, raised in public schools, has been exposed to ethnic diversity, and interracial and interethnic dating: “They’re far more cosmopolitan,” he says. They’re attracted to Obama, and less likely to oppose things like civil rights and sex education. “A kid in a suburban high school won’t get exercised about gay rights; it’s more live and let live.” ]]> Thu, 04 Dec 2008 00:00:00 -0500 http://mitworld.mit.edu/video/619 http://mitworld.mit.edu/video/619 While the ongoing world economic crisis has left many business leaders sweating (or worse), John Chambers is rolling up his sleeves in anticipation of an eventual recovery. After every economic challenge, he says, Cisco has come out with dramatic gains in market share. This time won’t be different, if Chambers’ bets pay off.

In the 1990s, he predicted that networks would transform the way the world works, becoming platforms for communications and other IT, and Chambers placed Cisco at the center of that transformation. Today, he envisions a Web 2.0 premised on collaboration and social networking that will similarly transfigure all business life. Since 2001, he’s been positioning Cisco to catch this massive market transition, and indeed, is “betting the company’s future on it.”

In “phase two of the Internet,” says Chambers, “Content will find me; I will not search for it.” Any device, anywhere, will be able to receive any kind of content. We will be dealing with licenses for things like music, rather than worrying about compatibility issues between our digital tools and what’s streaming through them. Web 2.0 will also bring “effective collaboration,” by which Chambers means network-enabled visual tools, which will make “working together for a common goal truly possible.” Expect much faster business processes and revved up productivity, says Chambers.

Based on Cisco’s own experience in the past several years, organizations will completely restructure around these new capabilities. Indeed, he offers up his company as a paradigm of this vision. Once a hierarchical, command and control-based organization, Cisco is now much flatter, a company running “off of social networking groups.” Councils with cross-functional responsibilities suggest and take on many more projects (from emerging markets, to video, and smart grid boards); from one to two major ventures per year, to this year’s 26 launches. The next generation company is “built around the visual.” Cisco employees do non-stop teleconferencing with collaborators around the world. The company hosts 2500 such virtual meetings per week. It also employs Webex, Wikis and blogging to move work along.

With this kind of communication and carefully managed process to match, “operations can be turned on a head,” says Chambers. It’s the recipe for market-dominating speed and scale. Chambers is “loading the pipeline” with projects that assume other companies will want what Cisco has and makes. “If we’re right, we’re developing a huge wave of revenue opportunity.” Perhaps this is one reason why he’s “an optimist on global productivity, global economy and our ability to handle the challenges.”

]]> Mon, 01 Dec 2008 00:00:00 -0500 http://mitworld.mit.edu/video/617 http://mitworld.mit.edu/video/617 There’s “just exactly enough time, with no time to lose” to address the massive challenge of climate change and renewable energy, says moderator John Sterman. With this sense of urgency, MIT faculty, administration and students have taken to heart the mission of rendering their campus and the larger world more sustainable.

Sterman describes a triumph of green construction rising on campus, Building E62, the product of a decade of design and negotiation, which many hope will set the standard for future MIT development. The building features lighting that will use half as much power as existing campus buildings, and heating and cooling that will reduce energy use by one-third. But this is a success story with lessons: green construction requires higher up front costs, and MIT executives were not immediately sold on the benefits of lower operating costs.

Theresa Stone lays out the fundamentals of MIT’s environmental stewardship: be comprehensive and involve the entire community; consider behavioral as well as engineered solutions; and think about return on investment. These principles have guided a thorough ongoing review of energy use, leading to improving radiators in half the Institute’s academic buildings; and getting researchers to close the sash on the 1000 chemical fume hoods on campus, which Stone characterizes as a major MIT “energy hog.” In some cases, MIT examined whether its safety standards were excessive, and consuming excessive energy.

The Sloan School’s Jason Jay outlines the complex network of MIT student-based sustainability initiatives, some of which have coalesced under the rubric MIT Generator. As an analyst of organizational change, Jay noted that in MIT’s unique culture, petitions and rallies were less likely to galvanize people than collaboration across disciplines, and the “engineering-hacking aesthetic of hands-on projects.” There are dozens of unique projects underway after just two years, including an experiment in using waste heat from MIT’s cogeneration facility for electric power.

One student club, Sustainability@MIT, has built a membership of 780, and hosts conferences, high profile speakers, and symposia. Representative Adam Siegel sees his group working with community organizations, and revving up voter interest in clean energy during political campaigns. His group recruits faculty mentors, and solicits corporate support to bring practitioners on campus, and to discuss jobs in sustainability. One sign of this movement’s success: There’s a wait list for Sloan’s Sustainability Lab.

Since her return from the World Solar Challenge, Anna Jaffe has been very busy creating the Vehicle Design Summit Project, an attempt to produce a car that’s 20 times more sustainable in its life cycle than the Prius. She’s developed an international consortium of students, worked with master auto makers in Turin, Italy, and has finished prototyping the first car. Beyond this vision lies a grander goal: acting as a catalyst for others with big ideas, and serving as a flashpoint for fellow MIT students. “We’re surrounded by so much genius, so we sometimes look to peers for answers,” she says. ]]> Mon, 17 Nov 2008 00:00:00 -0500 http://mitworld.mit.edu/video/614 http://mitworld.mit.edu/video/614 In what Dean Dave Schmittlein bills as a master class, Ronald A. Williams discusses how an emphasis on new technology and application of basic values helped turn around the health care giant Aetna.

Williams’ case study begins in 2001, when he arrived to find a corporation bleeding out -- having lost $280 million in the past year. He diagnosed key areas of failure and opportunity in Aetna’s vast enterprise: orchestrating medical, dental and other health and insurance benefits in a network of 843 thousand health care professionals with 37 million members. Williams shaped a path to recovery focusing on a better understanding of Aetna’s current customers, from small employers to the largest corporations, and the best way of expanding into new markets such as retailers, banks and law firms. To do this, Aetna needed to build products and services suited for those groups, and Williams’ strategy involved developing integrated information systems for both employers and consumers, to ensure cost-effective, and high quality health care delivery.

Williams repeatedly made the his case for this new strategy directly with Aetna’s staff. He pressed the issue of values: integrity, employee engagement, excellent service and high quality healthcare, and put in place employee surveys and biannual performance reviews. Employees were invited to answer whether they believed their supervisors held true to Aetna’s values and whether they were proud to be working with the company. Williams has noted a marked improvement in responses over just a few years. External benchmarks reflect positive growth as well: Aetna has reached the number one spot as Fortune Magazine’s most admired health care company, after occupying the rock bottom position.

Williams invested a great deal in technology he believes will “shape the future of health care.” He describes a Care Engine, containing an individual member’s personal health record and up-to–the-minute journal information and health guidelines that are “converted into computer algorithms.” This system can detect and fill gaps in care for patients -- conditions that go undetected, tests that should be administered, medicine that should not be prescribed. Williams has also given consumers the ability to find and compare the costs of tests and doctor visits. He believes we can check the trillions of dollars in health care spending through smart technology. For him, health care reform means we “get and keep everyone covered; maintain the employer-based system… reorient the system toward prevention, value, and quality of care; and use market incentives to improve coverage, drive down costs and make the system more consumer-oriented.” ]]> Mon, 27 Oct 2008 00:00:00 -0400 http://mitworld.mit.edu/video/608 http://mitworld.mit.edu/video/608 When a global corporation implements sustainability standards, it pays to work closely with supply chains, as these panelists attest.

From his research, Richard M. Locke knows that the traditional methods of achieving decent labor conditions don’t work well. When Locke examined years of records gathered by Nike and other companies concerned with employee treatment in overseas factories, he found the conventional compliance route -- auditing, policing and enforcement -- just hadn’t brought about consistent improvements in child labor, or excess hours.

What does work, Locke discovered, are collaborative approaches -- when the corporate buyer offers to show the way, sharing know-how and resources with its suppliers. For instance, when one of Nike’s Vietnamese apparel factories -- an under-performer in productivity and labor standards -- inquired about adopting Lean manufacturing, Nike helped retrain its workforce. After a few months, says Locke, the plant’s quality and output improved, and it boosted workers’ wages, lowering the turnover rate. Says Locke, “Good things can go together.”

When Wal-mart acquired a majority share in his family’s Central American business, Fernando Paiz admits he worried about Wal-Mart’s reputation in the U.S. Instead, he was delighted when Wal-mart actually raised the bar on environmental and labor standards. Says Paiz, “Wal-mart has pushed us beyond expectations of what compliance really means.”

Paiz describes how the corporation is pressing vendors and customers to reduce waste (the CEO wants none produced by 2011) and to become energy efficient. Among the innovations: Big box stores capture the frozen slush from thousands of refrigerator units to cool store interiors during the day; solar panels on Wal-mart rooftops produce electricity not just for stores but for neighbors. Wal-mart has challenged suppliers to come up with the least bulky products and sleekest packaging possible for everything from detergent to electronics. Consumers go for these big-time, says Paiz. The question is, “How can we do the same with other industries?”

Hewlett-Packard recently doubled in size with a major acquisition, adding 175 thousand more employees, which makes Bonnie Nixon-Gardiner’s job even more challenging. She’s now charged with establishing “global citizenship” standards within a sprawling network of staff and suppliers spanning nearly every continent. This means communicating H-P’s way of handling ethics, environmental sustainability, human rights and labor, privacy and social investment to managers and partners in nations not known for a keen concern in these areas.

In Mexico, a CEO of a factory told her that he doesn’t hire homosexuals, people with tattoos, pregnant women, people with lawyers in their families or people associated with unions. Says Nixon-Gardiner, “I said we need a conversation on hiring practices…We’re your partner; this is a risk for us.” Enforcing codes of conduct makes perfect business sense, she says. “Having been a manufacturer so long, it’s obvious to us, we treat people as our greatest asset. …It’s just a matter of helping partners in developing nations to understand…” ]]> Mon, 27 Oct 2008 00:00:00 -0400 http://mitworld.mit.edu/video/609 http://mitworld.mit.edu/video/609 All that’s required to achieve sustainability, says Rebecca Henderson, is to clean up your current operations and/or rethink the business. “That’s easy,” she says -- with a smile. Henderson has spent much of her career trying to help firms embrace and survive such transformations. She and her colleagues have analyzed why businesses get stuck in their ways, and how they can break free to act boldly around the challenge and opportunity of sustainability.

Overload proves the single greatest obstacle for many organizations, Henderson says. Too many projects and too little time result in “toxic effects, including making it difficult to undertake creative thinking and purposeful redirection” that responding to sustainability requires. Single-minded focus on short term financials can put unbearable pressure on individuals, who then can’t focus successfully, leading to failures in their projects. In an ugly loop, employees receive blame for poor performance, leading to greater pressure, and more degradation. Henderson sees a “fundamental tradeoff between working smarter and working harder.”

There’s no magic bullet for getting unstuck, and warns Henderson, whatever you do, don’t rely on vision models or simple blueprints for change. Rather, businesses must undergo a painful process of behavior change, “building muscle memory.” Henderson offers some tips for organizations to break out of ruts successfully. CEOs need to get a real fix on capacity (so they don’t throw one initiative after another at employees), and track performance historically. They must understand that significant change will be costly, and likely mean cutting out other projects – so perhaps “pick low-hanging fruit,” biting off “little chunks, addressing areas that make a big difference.” Managers must clearly state strategy and values, then live by them, and respond to problems as systems dynamics issues -- “don’t beat up employees.”

Henderson acknowledges these strategies are “easy to put on a slide, but hard to do.” Yet she feels that if organizations develop the ability to have real conversations, put aside an exclusive focus on the current quarter in favor of the long-term health of the company, a focus on sustainability “gives us the emotional power and moral juice to do these things.” ]]> Mon, 20 Oct 2008 00:00:00 -0400 http://mitworld.mit.edu/video/606 http://mitworld.mit.edu/video/606 If “organizations are the way that ideas change the world,” as MIT Sloan Dean Dave Schmittlein puts it, then look to institutions like MIT, which has wrapped its arms around the issues of energy and climate change, to help make sustainability real and attainable. The Dean describes some showcase work launched at MIT, including a long-lasting battery for electric cars, and MIT’s own green campus efforts.

For MIT Sloan, explains Richard Locke, sustainability is not an “in vogue concept” that is about environment or climate change. Rather, it is “an incredible opportunity for new business, and for existing enterprise to reinvent their practices.” He invites panelists and audience at Convocation sessions to engage in dialog about moving beyond theory to meet the challenges of sustainability.

Forget the notion that the climate challenge is primarily a technical one, and can be solved with the help of 21st century know-how, says John Sterman. A more useful response would combine the distributed leadership of a civil rights movement with the technological daring of a Manhattan project. There are huge obstacles to overcome: According to Sterman, while a vast majority of people have heard of global warming, believe it poses a threat, and believe in reducing greenhouse emissions, a majority also oppose any changes that would “put the true costs of energy in front of you at the pump and in your electric bill.” There’s widespread belief that we can “wait and see” whether climate change is really that bad.

Sterman is working on providing policy makers and the public with interactive models that demonstrate just how immediate the climate threat is and how a slack response will only make things worse. He wants people to perceive that they must reduce greenhouse gases dramatically, but he also wants to destroy the myth that doing so will “kill the economy.” Sterman says “addressing this issue will pay dividends—that if we can cut the use of fossil fuels, it puts money in our pockets.”

Vladimir Bulovic wants to make the climate issue personal and immediate: the arboreal forests of the world produce 2/3rds of the planet’s oxygen, and due to warming (and the diseases that accompany it), trees are dying off. This image of our world choking on its own waste is motivating MIT scientists to find alternatives to polluting energy sources. He cites in particular efforts to harness the sun’s energy, including improving silicon technology, engineering photons to make electricity, and advancing ways of concentrating and storing solar power.

British telecom BT has managed to reduce its carbon footprint by 58% since 1996. Imagine what would happen if other global corporations followed suit, queries
Kevin Moss. He challenges his commercial peers to scour their business processes to reduce real estate and transportation usage, improve energy efficiency (e.g., by raising operating temperatures at data centers), and to purchase renewable energy. BT’s next goal: an 80% reduction of carbon emissions, and to secure 25% of its energy needs by wind energy by 2016. ]]> Mon, 20 Oct 2008 00:00:00 -0400 http://mitworld.mit.edu/video/607 http://mitworld.mit.edu/video/607 GM knows you’ll be skeptical, says Gary Cowger, but this icon of American business has committed to transforming itself via a comprehensive regime of environmental sustainability. Cowger offers proof of the corporate giant’s efforts to date and even more ambitious plans for the future.

From its headquarters in Detroit, to 185 manufacturing sites around the world, to the cars and trucks people drive out of a dealership, GM sees “environmental sustainability more and more ingrained in our operating culture every day.” Cowger says employees in every plant, in every language around the world must embrace environmental metrics along with safety and quality.

This means, for instance, that GM is installing giant solar panels at sites in Europe and the U.S., in some cases, sending electricity back to the grid. It’s harnessing the energy of landfill gases to fire boilers and generate electricity. There are water reduction and reuse initiatives in thirsty spots like Mexico, and habitat enhancement and restoration projects in North America and Brazil. What’s more, GM has pledged to eliminate all waste at its operations worldwide; to date, 43 facilities are landfill free (your bag of trash accounts for more waste than all these plants put together, says Cowger.) He projects that renewable initiatives will amount to savings in excess of $75 million within a few years.

GM is pursuing a comparably diverse strategy with its cars and trucks, providing consumers with options to increase fuel economy, reduce emissions and “displace petrol.” In the next few years, expect more than 20 diesel engine variants, and biofuel-driven cars feeding on switchgrass, forest and farm residues and trash -- “the landfills we used to hate are becoming gems,” notes Cowger. GM is producing 20 versions of cars than can run on such flexfuels. The company is also developing a variety of hybrids, rear and front-wheel drive. The piece de resistance, what Cowger calls “the gamechanger,” will be the GM Volt. This is GM’s version “of how the auto will be reinvented,” a car that uses only electricity to power the wheels. If you don’t drive more than 40 miles per day, “you’ll never need to buy gasoline again,” says Cowger, because this car plugs in each night to recharge its lithium ion battery. Transforming the industry, he concludes, is good for business and “it’s the right thing to do.” ]]> Sun, 21 Sep 2008 00:00:00 -0400 http://mitworld.mit.edu/video/599 http://mitworld.mit.edu/video/599 This informative roundtable provides useful tips to wanna-be small biz entrepreneurs on snagging government dollars. Through conversation and Q&A, moderator
Bruce Gellerman elicits some key dos and don’ts from a National Science Foundation small business program officer, and from tech CEOs who have benefited from the government’s programs.

Thomas Allnut says that NSF is but one of 10 agencies that distribute money to small businesses, and that his program is “in the middle of the pack, with $110 million per year to give away to responsible small businesses to get technology into the market place.” All told, in 2007, the government gave away $2.5 billion to businesses of fewer than 500 employees. While some agencies, like Department of Defense, have mission-driven solicitations (e.g., better bullets or vests), NSF has a broader mandate.

While NSF’s first phase grants of $100 thousand and second phase grants of $750 thousand per year may seem small potatoes to some entrepreneurs, Allnut says, “We want to take small companies without…capitalization, who can’t afford to take a huge risk on technology and give them a little boost to try something they wouldn’t try otherwise.”

For Milton Chen, an assortment of small business grants at vital times during his company’s evolution “let me sleep a little easier.” His real-time video conferencing software company, VSee, had begun shipping its product, and cash flows were zooming up and down. “Having extra money helped; we hired some extra people.” Looking back, he says, it was a good move not seeking venture capital funding at this time, since they expected a rapid ramp up to profitability, and government funding bought VSee the time to work on “subtle, hard science issues” before facing the vicissitudes of the marketplace.

Christopher Loose began a company out of the MIT 100k Competition, developing “cutting edge functional surfaces to prevent infections.” He’s completed NSF first phase funding, which enabled Semprus Biosciences to develop a broad package of data about safety and efficacy. He recommends talking to program directors before writing a grant application, in order to “work within the spirit of SBIR.” He also thinks the very process of applying is “a good exercise,” forcing you to “think through your development plan critically.”

Bill Townsend has been building his business for 20 years, and credits SBIR grants with “helping out tremendously.” His robotics company “had a hard time raising money. Robotics might look interesting on the outside, especially to engineers, but it’s 1/3rd the size of the scented candlestick market.” His was “not a compelling story for VC.” He sold the government on the “long term bet” of robotics. Small business grants prove perfect for medium growth, he says –“it’s one of the few ways to get money other than credit cards.” ]]>