From the freemium business model to an aggregation business model, the 21st century digital economy has shown that serving customers well may not necessarily provide sustainability for a company unless the firms actively find ways to capture value in the process. It sounds obvious, but many media and e-commerce companies have gone bankrupt, despite improving customer experiences through digital channels, simply because they neglected to capture value.
For instance, many startups emerged and provided cheaper or completely free means of making national and international calls via the web, but later collapsed when they struggled to capture value. A direct 30-minute traditional phone call from Lagos to New York may cost $10, but using an app, the same call may cost an equivalent of $1, where that dollar is the cost of mobile internet services spent on the call. If the app is free (and most are), it has destroyed a value of $9 for the traditional phone operator, even though the app maker has not captured any for itself. Read More >>
A pair of newly published research papers co-authored by Wharton management professor David H. Hsu benchmark and explore commercialization drivers of academic science. The papers find that university research has produced pathbreaking innovations across many disciplines, many of which have been commercialized successfully. Yet, on average, universities capture 16% of the value they help create through licensing revenues or equity stakes in the startups their research spawns. Furthermore, some researchers and universities are much better able to commercialize their discoveries compared to others, even holding constant the discovery itself.
The first research paper, which Hsu wrote with Po-Hsuan Hsu, Tong Zhou and Arvids A. Ziedonis, is titled “Benchmarking U.S. University Patent Value and Commercialization Efforts: A New Approach” and was published this month in Research Policy. The second paper, “Revisiting the Entrepreneurial Commercialization of Academic Science: Evidence from ‘Twin’ Discoveries,” co-authored with Matt Marx, is forthcoming in Management Science.
The results suggest that universities with policies and resources devoted to commercialization efforts, aided by academic staff with commercialization experience and which are more interdisciplinary, are much more successful at translating research for commercial outcomes. Consequently, Hsu and his co-authors make a case for universities to take a closer look at the value they are extracting by commercializing their patents and intellectual property. Read More >>
To accelerate core-business and new-digital-business growth, established companies should adopt the best practices of successful start-ups.
Even with considerable resources available, many big organizations find it challenging to achieve double-digit revenue growth for new products and services—a range that for many start-ups and scale-ups would be dangerously low. But established companies can expand the market reach of their new businesses quickly and effectively by gaining an understanding of how scale-ups and start-ups operate, from their team structures and tech setup to their cultural mindset. Florian Heinemann, founding partner at Project A Ventures, a leading venture-capital (VC) firm in Europe, discusses his insights with McKinsey’s Philipp Hillenbrand about how to incorporate a start-up-like approach to marketing, business intelligence, and building high-performing teams. Read More >>
Peloton co-founder Graham Stanton doesn’t want his employees to have all the answers.
During the early days of the stationary bike startup, the team’s inexperience was one of the company’s biggest assets, Stanton said Wednesday during a virtual interview hosted by Cedar, a health care technology company.
“When I look back at my journey of Peloton and my colleagues, the ones who really succeeded were the ones who put in all the effort to learn,” Stanton said. He added that asking questions such as “How do I do my job today, because the way I did it yesterday no longer applies?” is key to getting ahead.
Founded in 2012 in New York City, Peloton launched with a Kickstarter campaign for its at-home stationary bikes that stream virtual spin classes on monitors. The product tracks workout metrics that can easily be shared on social media. Peloton gained traction quickly from a loyal customer base and went public in 2019. The fast growth required the company to reinvent itself repeatedly. Read More >>
The human brain is a prediction engine. A lot of the knowledge that you gain from experience is used to figure out what is likely to happen next. When you walk into a conference room before the start of a meeting and see other people in attendance, you feel comfortable that the meeting is going to start soon. When you see a colleague walking up the hall who works in marketing, you predict that you’ll soon be talking about a new campaign.
When things go as you predict, you feel comfortable. At the start of that meeting in the conference room with your colleagues filing in, you can sit down relaxed and talk with the person sitting next to you. If, however, you walked into that same room and found it empty—or filled with people you didn’t recognize or expect to see—you would probably feel uneasy. You might pull out your calendar to see if the time or location of the meeting had been changed. You would pay a lot of attention to what was going on. Read More >>
In the wake of the COVID-19 pandemic, leaders are increasingly focused on organizational resilience. Organizational resilience is the ability of an organization to anticipate, prepare for and respond to incremental change and sudden disruptions.
While it’s easy to see the value of this concept, it’s more challenging to identify the concrete actions and skills necessary to make an organization more resilient.
People often associate organizational resilience with the ability to “pivot” and be “agile” (words we’re all sick of hearing after the last year). But resilience is about survival, which doesn’t always entail change.
Overreaction is as potentially damaging as underreaction, especially if leaders make 15 changes at once without a strategy to evaluate their individual impact. It’s usually smarter to flex just enough to weather the current scenario, rather than overhaul the entire organization.
APQC identified six capabilities that help organizations meet the current moment and build for the long-term. Read More >>
The Covid-19 pandemic has crammed a great deal of pressure into our lives, but it has also created an unprecedented opportunity to revisit our own assumptions about how we should live and work. Managers and leaders have had to balance optimism with realism and find new ways to connect although they manage their employees from afar.
These exaggerated tensions and pressures can be a double-edged sword. Research suggests that whether people struggle or thrive with tensions, or competing demands, largely depends on their mindset. With a paradox mindset, tensions can be transformed into new ideas and improved performance. The paradox mindset suggests an alternative perspective, one in which we accept and learn to live with the tensions associated with competing demands.
Over the last few months, for example, scientists and pharmaceutical companies raced to develop beneficial treatments and test kits for Covid-19. The limited availability of test kits was a challenge as medical workers needed to quickly survey large populations to trace asymptomatic Covid-19 carriers. Apparently, working under pressure is an impetus for creativity.Read More >>
In times of uncertainty, it is crucial for leaders to rally around the why behind their mission. There is a tendency to overlook the why when decisive action is needed, but it is essential to steering the course of the business. The why illuminates what needs to be done and how it can be accomplished. The why gives the whole team a sense of purpose. As Friedrich Nietzsche is quoted as saying, “He who has a why to live for can bear almost any how.”
Over the past decade, my perspective on leadership has been guided by one simple mantra: Start with why, inspired by the book of the same title by Simon Sinek. In my time as an engineer, starting with why was fundamental to tackling every new product or feature. Starting with why meant understanding the pain points of the user and defining the success criteria for addressing the pain points. From there, we could specify the functionality needed (the what) and set a plan for developing the product (the how). As I became a leader, I found that these same principles apply to management — always, but especially in turbulent times. Read More >>