Harvard Business School's Digital Initiative, led
by professors Marco Iansiti and Karim Lakhani,
brings an interdisciplinary approach to studying
how digital technology has transformed business
and innovation.
©iStock.com/RichVintage
The study of innovation and business is still in its
infancy.
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25 FEB 2015 LESSONS FROM THE CLASSROOM
Scholars and
Students Unpack
the Digital Business
Revolution
by Julia Hanna
Think of Harvard Business School's recently
launched the Digital Initiative (D/I) as a giant
laboratory, where leading scholars and
practitioners convene to research, teach, and put
into practice new understandings about the
relentless digital transformation of business.
Launched in 2013, D/I focuses on the economics
and strategy of digital: how organizations need
to adapt and change in this new environment,
and the individual skills required to succeed in a
digital economy.
“THERE’S A SECULAR SHIFT IN THE
ECONOMY, AND FROM A RESEARCH
PERSPECTIVE, MORE OF THE
SCHOLARS HBS IS ATTRACTING ARE
STUDYING DIGITAL”
"You know that a significant change has taken
place when you can have the same conversation
with an analyst at a hedge fund, an Amazon
employee focused on retail data, and a
forecaster at General Electric," says HBS David
Sarnoff Professor of Business Administration
Marco Iansiti , who serves as faculty chair of the
initiative and head of the Technology and
Operations Management unit.
D/I is one of 13 initiatives and projects created
by the School to foster interdisciplinary research
on the great problems and opportunities facing
society—including such topics as business and
the environment, health care, US
competitiveness, social enterprise, and
leadership.
DRIVING FORCES
For businesess, the transformation to digital is
being driven by two primary factors, according to
Iansiti: the explosion of connected devices and
expanded computing capacity in the cloud.
"There's a secular shift in the economy, and
from a research perspective, more of the
scholars HBS is attracting are studying digital,"
says Associate Professor Karim R. Lakhani, a
member of D/I'sw faculty who also serves as
principal investigator of the Crowd Innovation
Lab at Harvard's Institute for Quantitative Social
Science. "The Digital Initiative gives us the
space to collaborate and build a scholarly
community that reflects what is happening in the
broader world while creating new learning
materials for students and practitioners."
Iansiti and Lakhani's MBA elective course Digital
Innovation and Transformation is a direct
reflection of the organizing impetus behind D/I.
In it, students get a hands-on sense of what is
unique about digital economics and business
models, from new businesses like 3-D printing to
"classics" like Facebook.
They also do a deep dive into data analytics.
"There are datasets available now that simply
weren't possible a decade ago," says Lakhani.
But access to data is not the same thing as
understanding the data correctly. "Many of the
tools available now make it easy to look at
correlations between two factors and draw
incorrect conclusions; that can drive exactly the
wrong decisions."
Students also consider the expanding practice of
leveraging crowds for innovation and how
crowdsourcing models have played out in
different business environments. Lakhani notes,
for example, that digital innovation has changed
the models and mechanisms around financing.
"We always thought (innovation financing) would
be a hierarchical, top-down model like venture
capital," he says. Companies like Kickstarter-a
crowdfunding site that anyone can access and
participate in—have changed that view.
An additional course focus is digital
transformation, or how companies across all
industries are evolving, from music to advertising
to industrial products. (A course segment on
organizations that tried to change and failed—
like Nokia—is also included.)
"We talk about why Google would buy Nest—a
thermostat company—and how it is also getting
into the car business," says Iansiti. "Ford is
realizing that its future competitors are likely to
be Facebook and Google and not BMW and
Toyota."
“WE TALK ABOUT WHY GOOGLE
WOULD BUY NEST—A THERMOSTAT
COMPANY—AND HOW IT IS ALSO
GETTING INTO THE CAR BUSINESS”
Students use the HBS Open Forum platform to
file assignments, for example posting short
essays (with the option to include graphics, data,
and video) to describe a company that is
exceling at digital transformation. Participants
are encouraged to comment on other posts and
engage with the wider community, resulting in a
cross-pollination of ideas that broadens the
overall conversation. (HBS Professor Clayton M.
Christensen leveraged the same platform for a
new approach to research by reaching out to
over 5,000 alumni of his Building and Sustaining
a Successful Enterprise course. As a result, 126
participants contributed insights included in his
June 2014 Harvard Business Review article The
Capitalist's Dilemma .)
More recently, HBS's Health Care and Digital
initiatives collaborated on the Health
Acceleration Challenge to identify proven
innovations that, if scaled, would dramatically
enhance health care value. They netted almost
500 entrants, reaching 20,000 visitors and
engaging 2,500 commentators, ultimately
selecting four finalists who will benefit from an
advisory network of health care industry leaders
(including many HBS alumni), be the subject of a
teaching case, and receive a cash prize of over
$35,000.
An upcoming D/I event—one of a number offered
throughout the year—also ties into Iansiti and
Lakhani's Digital Innovation and Transformation
course, giving MBA students, faculty, and
practitioners a chance to explore and address
digital challenges and opportunities.
The #digHBS Summit, to be held March 30, will
engage D/I advisors, friends, and faculty in
interactive discussions, tighten the feedback loop
between scholarship and practice, and
complement students' academic coursework with
tales from the proverbial frontlines of practice.
Participants will take on a range of issues
affecting businesses that have been transformed
by digital, such as those in the music, news, and
entertainment industries. The gathering will look
at the emerging collaborative and sharing
economies, explore organizational change in a
digital context, consider the implications of new
technologies for health care, and ask hard
questions about the promise and peril of big
data.
The emphasis in all of this, Iansiti and Lakhani
point out, is on doing, whether in teaching,
learning, or research. "There is a direct
engagement with the world that is bringing HBS
closer to the medical school or engineering
school model," says Lakhani. "The costs of
engaging with the world and having an impact
have dropped dramatically."
Iansiti points out that there is also, unfortunately,
a downside to this new reality. "We are just
beginning to appreciate the implications of this
highly connected environment and how quickly
risk pools across different parties," he says.
However its impact may be felt, technology can
no longer be shunted along to segregated
departments or individuals. It has become
fundamental to even the most traditional aspects
of management, from building competitive
advantage to understanding customers to
forecasting trends and boosting productivity.
"The genie is out of the bottle," says Lakhani.
"As a result, we need to educate, train, and
inform."
ABOUT THE AUTHOR
by professors Marco Iansiti and Karim Lakhani,
brings an interdisciplinary approach to studying
how digital technology has transformed business
and innovation.
©iStock.com/RichVintage
The study of innovation and business is still in its
infancy.
Name
Position
Organization
Add a Comment
By hitting “Submit” you agree that your
comment, in whole or in edited form, may be
posted online. Comments are selected on the
basis of relevancy and variety; not all will be
posted.
25 FEB 2015 LESSONS FROM THE CLASSROOM
Scholars and
Students Unpack
the Digital Business
Revolution
by Julia Hanna
Think of Harvard Business School's recently
launched the Digital Initiative (D/I) as a giant
laboratory, where leading scholars and
practitioners convene to research, teach, and put
into practice new understandings about the
relentless digital transformation of business.
Launched in 2013, D/I focuses on the economics
and strategy of digital: how organizations need
to adapt and change in this new environment,
and the individual skills required to succeed in a
digital economy.
“THERE’S A SECULAR SHIFT IN THE
ECONOMY, AND FROM A RESEARCH
PERSPECTIVE, MORE OF THE
SCHOLARS HBS IS ATTRACTING ARE
STUDYING DIGITAL”
"You know that a significant change has taken
place when you can have the same conversation
with an analyst at a hedge fund, an Amazon
employee focused on retail data, and a
forecaster at General Electric," says HBS David
Sarnoff Professor of Business Administration
Marco Iansiti , who serves as faculty chair of the
initiative and head of the Technology and
Operations Management unit.
D/I is one of 13 initiatives and projects created
by the School to foster interdisciplinary research
on the great problems and opportunities facing
society—including such topics as business and
the environment, health care, US
competitiveness, social enterprise, and
leadership.
DRIVING FORCES
For businesess, the transformation to digital is
being driven by two primary factors, according to
Iansiti: the explosion of connected devices and
expanded computing capacity in the cloud.
"There's a secular shift in the economy, and
from a research perspective, more of the
scholars HBS is attracting are studying digital,"
says Associate Professor Karim R. Lakhani, a
member of D/I'sw faculty who also serves as
principal investigator of the Crowd Innovation
Lab at Harvard's Institute for Quantitative Social
Science. "The Digital Initiative gives us the
space to collaborate and build a scholarly
community that reflects what is happening in the
broader world while creating new learning
materials for students and practitioners."
Iansiti and Lakhani's MBA elective course Digital
Innovation and Transformation is a direct
reflection of the organizing impetus behind D/I.
In it, students get a hands-on sense of what is
unique about digital economics and business
models, from new businesses like 3-D printing to
"classics" like Facebook.
They also do a deep dive into data analytics.
"There are datasets available now that simply
weren't possible a decade ago," says Lakhani.
But access to data is not the same thing as
understanding the data correctly. "Many of the
tools available now make it easy to look at
correlations between two factors and draw
incorrect conclusions; that can drive exactly the
wrong decisions."
Students also consider the expanding practice of
leveraging crowds for innovation and how
crowdsourcing models have played out in
different business environments. Lakhani notes,
for example, that digital innovation has changed
the models and mechanisms around financing.
"We always thought (innovation financing) would
be a hierarchical, top-down model like venture
capital," he says. Companies like Kickstarter-a
crowdfunding site that anyone can access and
participate in—have changed that view.
An additional course focus is digital
transformation, or how companies across all
industries are evolving, from music to advertising
to industrial products. (A course segment on
organizations that tried to change and failed—
like Nokia—is also included.)
"We talk about why Google would buy Nest—a
thermostat company—and how it is also getting
into the car business," says Iansiti. "Ford is
realizing that its future competitors are likely to
be Facebook and Google and not BMW and
Toyota."
“WE TALK ABOUT WHY GOOGLE
WOULD BUY NEST—A THERMOSTAT
COMPANY—AND HOW IT IS ALSO
GETTING INTO THE CAR BUSINESS”
Students use the HBS Open Forum platform to
file assignments, for example posting short
essays (with the option to include graphics, data,
and video) to describe a company that is
exceling at digital transformation. Participants
are encouraged to comment on other posts and
engage with the wider community, resulting in a
cross-pollination of ideas that broadens the
overall conversation. (HBS Professor Clayton M.
Christensen leveraged the same platform for a
new approach to research by reaching out to
over 5,000 alumni of his Building and Sustaining
a Successful Enterprise course. As a result, 126
participants contributed insights included in his
June 2014 Harvard Business Review article The
Capitalist's Dilemma .)
More recently, HBS's Health Care and Digital
initiatives collaborated on the Health
Acceleration Challenge to identify proven
innovations that, if scaled, would dramatically
enhance health care value. They netted almost
500 entrants, reaching 20,000 visitors and
engaging 2,500 commentators, ultimately
selecting four finalists who will benefit from an
advisory network of health care industry leaders
(including many HBS alumni), be the subject of a
teaching case, and receive a cash prize of over
$35,000.
An upcoming D/I event—one of a number offered
throughout the year—also ties into Iansiti and
Lakhani's Digital Innovation and Transformation
course, giving MBA students, faculty, and
practitioners a chance to explore and address
digital challenges and opportunities.
The #digHBS Summit, to be held March 30, will
engage D/I advisors, friends, and faculty in
interactive discussions, tighten the feedback loop
between scholarship and practice, and
complement students' academic coursework with
tales from the proverbial frontlines of practice.
Participants will take on a range of issues
affecting businesses that have been transformed
by digital, such as those in the music, news, and
entertainment industries. The gathering will look
at the emerging collaborative and sharing
economies, explore organizational change in a
digital context, consider the implications of new
technologies for health care, and ask hard
questions about the promise and peril of big
data.
The emphasis in all of this, Iansiti and Lakhani
point out, is on doing, whether in teaching,
learning, or research. "There is a direct
engagement with the world that is bringing HBS
closer to the medical school or engineering
school model," says Lakhani. "The costs of
engaging with the world and having an impact
have dropped dramatically."
Iansiti points out that there is also, unfortunately,
a downside to this new reality. "We are just
beginning to appreciate the implications of this
highly connected environment and how quickly
risk pools across different parties," he says.
However its impact may be felt, technology can
no longer be shunted along to segregated
departments or individuals. It has become
fundamental to even the most traditional aspects
of management, from building competitive
advantage to understanding customers to
forecasting trends and boosting productivity.
"The genie is out of the bottle," says Lakhani.
"As a result, we need to educate, train, and
inform."
ABOUT THE AUTHOR
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