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Value Creation (Spring 2018)

Whatever your organization produces, one hard truth applies: your offering has zero value unless your customers perceive value in it. One of the core challenges for leaders today is to understand the nuances of creating value in the mind of the consumer. In this issue, we put value creation in the spotlight in an effort to define what it looks like and how to enable more of it.

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Feature Articles From this Issue

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Rotman Managment Magazine, Spring 2018: Value Creation
  • (FREE) Creating Value for Business and Society
    by D. Kiron, G. Unruh, N. Kruschwitz, M. Reeves, H. Rubel and A. Meyer Zum Felde
    The ‘business of business’ is no longer just business. In their conclusion to an eight-year study, authors from BCG and MIT discuss some of the principles required to jump-start sustainable business.
    Click on the title to read the article or here for a PDF version.
Rotman Managment Magazine, Spring 2018: Value Creation
Rotman Managment Magazine, Spring 2018: Value Creation
  • (FREE) The Paradox of Progress
    by András Tilcsik and Karen Christensen
    The co-author ofMeltdown: Why Our Systems Fail and What We Can Do About Itdescribes the common elements of systemic failures — and what they teach us.
    Click on the title to read the article or here for a PDF version.
Rotman Managment Magazine, Spring 2018: Value Creation
  • (FREE) The Future of Financial Services
    by John Hull
    What will financial services look like in 2035? Accurate forecasts are impossible, but one thing is certain: Banks that fail to adjust to new technology will fail.
    Click on the title to read the article or here for a PDF version.
QA with Michael Porter
  • Thought Leader Interview: Michael Porter
    by Karen Christensen
    Widely considered the founder of the modern strategy field, Michael Porter discusses his current work on the Social Progress Imperative and its accompanying Social Progress Index. He explains why social progress must be on the radar of every business executive. He also describes why Denmark (among countries) and America’s largest bank, J.P. Morgan Chase (among corporations) lead the world in terms of their commitment to social progress. In the end, he makes it clear that the most powerful way for any company to affect society is through its business model.
Rotman Managment Magazine, Spring 2018: Value Creation
  • The (Surprisingly) Simple Economics of Artificial Intelligence
    by Ajay Agrawal, Joshua Gans and Avi Goldfarb
    Re-framing a technological advance as a shift from scarce to abundant or from expensive to cheap is invaluable for thinking about how it will affect your business. Computers made arithmetic cheap, with vast implications for industries whose products could be digitized, such as photography and music. Artificial Intelligence, the authors argue, will be economically significant because it will make something very important a lot cheaper: prediction. The challenge will be to identify situations in which prediction will be valuable, and then figure out how to benefit as much as possible from that prediction.
Rotman Managment Magazine, Spring 2018: Value Creation
  • The Elements of Value
    by Eric Almquist, Jamie Cleghorn and Karen Christensen
    The amount of value in any given product will always lie in the eye of the beholder. Yet universal building blocks of value do exist. Two senior Bain & Company experts describe the ‘elements of value’ for both business-to-consumer and business-to-business products. They explain how they have organized these elements (30 for B2C and 40 for B2B) into a hierarchical pyramid inspired by Maslow’s Hierarchy of Needs—with basic value offerings at the bottom and aspirational offerings at the top. Apple’s iPhone, for instance, covers 11 of the 30 possible elements of value for consumers. The challenge for leaders today, they argue, is to compare their value offerings to their competitors; seek to close value gaps; and come up with innovative new combinations of value.
Rotman Managment Magazine, Spring 2018: Value Creation
  • Consumer Behaviour Online: A Playbook Emerges
    by Dilip Soman, Jessica An and Melanie Kim
    As consumer touchpoints increasingly migrate online, it is important to understand how human nature manifests itself in a digital environment. The authors—including the head of the University of Toronto’s Behavioural Economics in Action research institute—describe five behavioural biases brought on by a digital environment and present their research findings on three characteristics of digital behaviour: the ‘screen effect’; the choice-engine effect; and the connectivity effect. They make it clear that online decision making is not merely the digitization of decision making in a brick-and-mortar world: It is a playing field with completely different rules.
Rotman Managment Magazine, Spring 2018: Value Creation
  • Design Thinking for the Greater Good
    by Jeanne Liedtka, Randy Salzman and Daisy Azer
    The authors argue that innovation is a social process tied to human emotions and reliant on inexact methodologies in which humans collaborate and solutions emerge over time. The authors argue that Design Thinking is a key part of ‘innovation 2.0’—a new approach to innovation that involves a different set of participants in the process and uses a different approach. For example, in Innovation 2.0, the focus is on developing previously-unseen possibilities rather than starting out with existing options. They provide examples of organizations that are embracing innovation 2.0 and show what it looks like in practice.
Rotman Managment Magazine, Spring 2018: Value Creation
  • Putting Artificial Intelligence to Work
    by Philipp Gerbert, Martin Hecker, Sebastian Steinhauser, and Patrick Ruwolt
    Despite the increase in AI-enabled applications, significant adoption of AI in business remains low: According to a survey by the Boston Consulting Group, only 1 in 20 companies has extensively incorporated AI. Nevertheless, every industry includes companies that are ahead of the pack. The authors—all senior BCG consultants—present a wide variety of uses, from marketing to operations to support functions, that demonstrate just how effective AI can be in creating value.
Rotman Managment Magazine, Spring 2018: Value Creation
  • Impact Investing and the Promise of Real Assets
    by Rod Lohin
    Impact investments—those that seek a specific social or environmental impact alongside financial returns—continue to grow rapidly. As investor interest grows, many investment firms are building capacity in this area. The author argues that in a world of low interest rates and a desire to increase returns and decrease uncertainty, real assets—investments in real estate or infrastructure projects such as low-cost rental housing and seniors’ facilities—are a great starting place to try out impact investing.
Rotman Managment Magazine, Spring 2018: Value Creation
  • Can Twitter Help Predict Firm Value?
    by Partha Mohanram
    Investors have long relied on information intermediaries—from financial analysts and advisors to the business press, credit rating agencies and auditors—to acquire timely and value-relevant information regarding the prospects of stocks. However, with the rise of the Internet and social media, individual investors are increasingly relying on each other as peer-to-peer sources of information. The author describes his research, which indicates that Twitter is another embodiment of the wisdom of crowds and that the aggregate opinion from individual tweets does help to predict earnings.
Rotman Managment Magazine, Spring 2018: Value Creation
  • Redefining Work: Three Forces That are Reshaping Jobs
    by John Hagel, Jeff Schwartz and Josh Bersin
    The authors argue that three forces are creating a profound shift in the very nature of work: technology, demographics and the power of pull—which has made customers in every industry more powerful than ever before. After discussing each force in detail, they describe how technology will reshape every job and how alternative work arrangements will continue to grow. They then describe the key implications of all of this for individuals (including ‘engage in lifelong learning’), organizations (including ‘implement new models of culture and rewards’) and public policy (including ‘transition support for income and healthcare’). Their hope is that their framework will help people proactively navigate the future of work and come together to make the transition as productive and smooth as possible.

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Robo Advising 101 by Eric Kirzner
The Power of 'Onlyness' by Nilofer Merchant
Interviews and Ideas

From This Issue Spring 2018

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