How Companies Should Invest in a Downturn
Technology firms’ stock prices have declined recently, bringing memories of the early 2000s’ dotcom bust. For example, the value of Cathie Wood’s Ark Innovation ETF has declined by 75% from its peak. This downfall is quite similar to the 78% decline in Nasdaq from March 2000 to October 2002, which was followed by a recession. Read the rest of the post on Harvard Business Review....
Posted by: Vijay Govindarajan - 06/20/2022 at 05:50 am
Higher Ed’s Next Great Digital Advantage
Universities today face two competing choices: Should we go back to the erstwhile campus-centric, face-to-face education? Or should we leverage the lessons from remote teaching during the COVID-19 pandemic to redefine it? Read the rest of the post on Harvard Business Review.
Posted by: Vijay Govindarajan - 06/14/2022 at 09:34 am
The Growing Imperative to Build Leadership in Fourth Industrial Revolution
With lockdown in Shenzen tech hub in China and shipping disruptions arising from Russia’s attack on Ukraine, some of us have lost hope that we will ever receive that new phone, webcam, or car that we ordered during the Covid pandemic, and have patiently waited for months. This situation is not an outcome just recent events, but a culmination of series of events that led to contrasting...
Posted by: Vijay Govindarajan - 06/02/2022 at 05:42 am
How Companies Can Prepare for a Long Run of High Inflation
Consumers, businesses, governments, and investors are particularly concerned about recent inflation news. Thanks to demand continuing to outpace supply and Russia’s attack on Ukraine and the West’s subsequent sanctioning of Russian goods and trade, inflationary pressures and supply chain issues are real and here to stay. It’s important to develop an in-depth understanding of these problems and create a...
Posted by: Vijay Govindarajan - 05/02/2022 at 12:48 pm
The Next Great Digital Advantage
In our HBR article, N. Venkat Venkatraman and I argue datagraphs as the next source of competitive advantage. Datagraphs must drive strategy because they help companies create new pools of value. Digital companies such as Amazon, Google, and Netflix have come to dominate the market with their Purchase Graph, Search Graph, and Movie Graph, respectively, but the...
Posted by: Vijay Govindarajan - 04/13/2022 at 11:02 am
The Rapid Rise and Fall of Biotech Stocks Adversely Impacts the Society
Recently, President Biden announced an ambitious goal to reduce cancer death rate by at least 50 percent and to improve the experience of living with and surviving cancer. Why has the society not made faster progress on cancer front? Why do discoveries in biotechnology sector occur in fits and spurts? We claim that this slow and sporadic progress has a lot to do with the vagaries of capital markets. Let’s...
Posted by: Vijay Govindarajan - 03/16/2022 at 08:00 am
How Working with Competitors Made Jio a Telecom Giant
More than a traditional telecom business, India’s Jio Platforms is proving to be a disruptor. Jio was launched as a “freemium” service, offering free internet services to price-sensitive Indian customers to increase the adoption rate and scale up the market. Previously, Indian customers, whose average income is about $150 per month, had never had access to such a high-speed internet...
Posted by: Vijay Govindarajan - 01/03/2022 at 12:46 pm
MBA Programs Need an Update for the Digital Era
I want your reactions after reading the Harvard Business Review article.
Consider three facts:
1. In the past two decades, there has been a major shift in value from industrial companies to the tech sector.
2. MBA program was invented in the 20th Century to produce managers for industrial companies.
3. We've introduced many innovations to the MBA curriculum in the last...
Posted by: Vijay Govindarajan - 11/11/2021 at 10:04 am
Winning The Right Game
My good friend and colleague Ron Adner is releasing an important book Winning The Right Game.
It is a rare book that fundamentally changes how I think about strategy. Ron has now done this twice.
If you haven’t read his first book, The Wide Lens, you are missing the big picture around innovation in ecosystems.
With his new book, however, Winning the Right Game, Ron has taken an even bigger leap:...
Posted by: Vijay Govindarajan - 09/21/2021 at 07:42 am
What Zomato’s $12 Billion IPO Says About Tech Companies Today
Zomato, a food delivery company, is aiming to transform the eating habits of 1.36 billion people in India. In mid-July, its initial IPO was oversubscribed 35 times, giving it a valuation of $12 billion. Despite operating a traditional food business, Zomato epitomizes a modern tech company, and its successful IPO can teach us what a modern tech company is — and what it isn’t. It can transform whole industries,...
Posted by: Vijay Govindarajan - 08/06/2021 at 08:44 am
What the edX Acquisition Means for the Future of Higher Education
In a recently announced transaction, 2U will acquire all edX assets, including the brand, about 3,500 digital courses, and the website — with its 50 million learners. This development should serve as a wakeup call for other colleges and universities, which must start thinking about how to unbundle the value chain and outsource areas where others possess superior core competencies By partnering and controlling...
Posted by: Vijay Govindarajan - 07/15/2021 at 12:26 pm
Resist Old Routines When Returning to the Office
In places where pandemic restrictions are easing, companies must embrace this unique opportunity to retain the beneficial practices they adopted during the crisis. To do so effectively, leaders must be thoughtful about identifying which have been successful and deliberate in ensuring that the changes stick. We present a four-step framework to help leaders identify, retain, and sustain the changes that have been successful...
Posted by: Vijay Govindarajan - 05/11/2021 at 09:14 am
Mind the GAAP
Is a company making profit or a loss? Surprisingly, this question is becoming increasingly difficult to answer.
Limitations in financial reporting will only increase with time, and changes in accounting rules to mitigate those limitations will not occur soon. We support the view that whenever appropriate, managers must report pro-forma earnings while detailing and explaining the reason for each exclusion. Using that...
Posted by: Vijay Govindarajan - 05/04/2021 at 09:13 am
I’ll Take the Case
In I’ll Take The Case, long-time litigator Jonathan D. Plaut shares true law stories that he has handled in his career. Some are funny, some are poignant, some are heartbreaking, and some are just wild. They range from criminal law, civil litigation, and sports law to international disputes and family battles. Attorney S. Chernoff has this to say about the book: “I’m trying to be objective...
Posted by: Vijay Govindarajan - 04/26/2021 at 09:14 am
Should Midsize Companies Play Offense or Defense in a Downturn?
Recessions are tough for midsize companies who usually play defense. Playing offense could be a better choice for midsize firms than playing defense.
Read the rest of the post on Harvard Business Review.
Posted by: Vijay Govindarajan - 03/17/2021 at 02:39 pm
The U.S. Economy Is Leaving Midsize Companies Behind
Despite low interest rates and a generally stable economic environment, 2010–2019 saw the slowest growth among midsize companies and a continual deterioration of their financial performance. That may have to do with the last decade’s winner-takes-all economy. Bankruptcy filings shows that the pandemic made this trend even worse. It’s never been more important for midsize businesses to understand that a...
Posted by: Vijay Govindarajan - 02/17/2021 at 08:52 am
The Uncertainty of Middle Management Jobs - And How to Stay Relevant
While it is widely accepted that automation, robots, and AI have caused or will cause large scale job losses among low-skilled workers, their effect on middle-management jobs is not that well understood. In this article, we claim that even middle management jobs are being replaced by machines and AI at an alarming rate. COVID has only accelerated this trend. We provide some suggestions to middle managers on how to stay...
Posted by: Vijay Govindarajan - 01/27/2021 at 08:34 am
U.S. Financial Reporting Is Stuck in the 20th Century
One of the most important uses of financial statements is to enable investors to make timely decisions about buying and selling stocks. In the simplest analysis, an investor makes money by buying shares cheap and selling when it becomes overpriced. Value investors rely on multiple, often complicated, methods to make trading decisions. One way relies on income statement (profits) and balance sheets (assets) to identify...
Posted by: Vijay Govindarajan - 12/17/2020 at 07:41 am
The Analytics and AI Opportunity for Business Schools
Based on our experience working with CEOs and management teams to drive innovation and implement digital technologies, we have witnessed not only the rise, but also the mismatch in supply and demand, of A/AI analytics talent. As educators, we firmly believe that business schools have a paramount role to play in bridging this gap. We propose a strategic framework for business schools to consider when evaluating,...
Posted by: Vijay Govindarajan - 12/07/2020 at 12:03 pm
Private sector. Don’t just stand there, do something BIG!
The Gap Persists and is Getting Wider. There is no doubt that the U.S. has come a long way since the Jim Crow South, racial segregation, and the disenfranchisement of the early 20th century. However, recent racial tensions and civil unrest has put a spotlight on the persistent economic inequality between people of color and whites. A previous article, based on meta-analysis from field experiments on...
Posted by: Vijay Govindarajan - 10/13/2020 at 07:33 am
COVID-Imposed Opportunity to Selectively Unlearn Past Practices
The Three-Box Solution suggests a three-pronged framework for creating successful organizations: to discover and adopt new business models, to transform and improve existing business practices, and to selectively forget old habits that don’t work anymore. For an automobile company, these prescriptions would imply: developing electric cars with mobility as a solution, making production and distribution more...
Posted by: Vijay Govindarajan - 10/13/2020 at 07:29 am
Tech Giants, Taxes, and a Looming Global Trade War
Pre-pandemic, you might remember, the U.S. government threatened to impose 100% tariffs on French goods, including champagne and cheese, in retaliation for France’s planned 3% tax on revenues generated by large digital companies in its territory. France agreed to postpone these taxes until the end of 2020 to avoid a trade war, while hoping that the Organization for Economic...
Posted by: Vijay Govindarajan - 08/25/2020 at 08:03 am
What businesses can do to reduce income inequality
Recent racial tensions and civil unrests have put a spotlight on the persistent economic inequality between people of color and whites. We propose creating a sweeping process where companies would tackle this terrible situation that has ensnared so many of our young people, who, through no fault of their own are caught in a multi-generational downward economic spiral. We believe firmly that the private sector must...
Posted by: Vijay Govindarajan - 08/03/2020 at 08:50 am
No, WeWork Isn’t a Tech Company. Here’s Why That Matters
This article ran in HBR China's print edition, June 2020.
Last week, WeWork, the coworking space now known as The We Company, released its S-1 filing to go public. That spurred numerous concerns about the company’s large valuation ($47 billion at last count), given its hefty losses ($1.6 billion on revenues of $1.8 billion) and despite its rapid growth (86% year-over-year revenue...
Posted by: Vijay Govindarajan - 06/19/2020 at 09:58 am
A Post-Pandemic Strategy for U.S. Higher Ed
Universities have many pressing short-term issues to deal with right now: large budget cuts, a growing reluctance among students to pay full tuition fees for online education, demands for reimbursement of already-paid fees, the possible disappearance of international students who pay full fees, the large-scale deferral of admissions, a sharp spike in the need for financial...
Posted by: Vijay Govindarajan - 06/02/2020 at 08:37 am