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
As Covid-19 Disrupts Global Supply Chains, Will Companies Turn to India?
America’s relationship with the two most populous countries in the world, China and India, is undergoing a stark, rapid and perhaps permanent transformation. In April, a Pew Center survey found that two-thirds of Americans say they have an “unfavorable” view of China; according to Pew it was “the most negative rating for the country since the Center began asking the question in...
Posted by: Vijay Govindarajan - 06/01/2020 at 10:18 am
Important New Book By Tuck School Professor Kusum Ailawadi and Darden Professor Paul Farris
Selecting and managing multiple distribution channels is one of the thorniest challenges facing managers today. How do you make physical and digital channels, independent and company-owned ones, platform and pipeline retail, work together? How do you achieve the market coverage you need while preserving your brand’s equity? And how do you do this in a way that is sustainable for all the partners in the distribution...
Posted by: Vijay Govindarajan - 05/04/2020 at 05:59 am
What the Shift to Virtual Learning Could Mean for the Future of Higher Ed
Tectonic shifts in society and business occur when unexpected events force widespread experimentation around a new idea. During World War II, for instance, when American men went off to war, women proved that they could do “men’s” work — and do it well. Women never looked back after that. Similarly, the Y2K problem demanded the extensive use of Indian software engineers, leading to...
Posted by: Vijay Govindarajan - 03/31/2020 at 11:18 am
Becoming A Better Corporate Citizen
Capitalism is under pressure. People all over the world believe that CEOs manage companies for the short term because of a single-minded focus on shareholders. The emergence of activist investors, who focus on quickly extracting outsize returns, has created even more angst about how companies are run. To address these issues, academics, think tanks, corporate leaders, and NGOs have started talking about how to reform the...
Posted by: Vijay Govindarajan - 02/20/2020 at 06:16 am
We Are Nowhere Near Stakeholder Capitalism
If you read the headlines coming from the 2020 World Economic Forum at Davos, you may start believing that public corporations have fundamentally changed their raison d’être: from creating value for shareholders to benefiting society-at-large. In our opinion, this conclusion is premature. We haven’t seen real change yet, and we won’t without first...
Posted by: Vijay Govindarajan - 01/30/2020 at 07:39 am
Understanding India’s Chilly Reception of Jeff Bezos
Developing nations normally welcome CEOs of large multinationals who promise to invest in their countries and generate jobs. However, Jeff Bezos’s recent visit to India was marred by protests, an antagonistic remark by the Indian finance minister, and a refusal to meet by the Indian prime minister — all despite Bezos’s promising to spend a billion dollars and generate millions of jobs...
Posted by: Vijay Govindarajan - 01/23/2020 at 05:12 am
How India Plans to Protect Consumer Data
The Indian government looks set to legislate a Personal Data Protection Bill (DPB), which would control the collection, processing, storage, usage, transfer, protection, and disclosure of personal data of Indian residents. Despite its regional nature, DPB is an important development for global managers. The digital economy in India is expected to reach a valuation of $1 trillion dollars by...
Posted by: Vijay Govindarajan - 12/18/2019 at 06:30 am
Midsize Companies Are Growing, But Struggling to Earn Profits
This summer, we published an analysis showing that the gap between large and small firms has grown over the past 15 years, with large companies becoming more likely to maintain their dominance and small ones less likely to become big and profitable. Several readers wrote to us asking about what’s happened to medium-sized firms — those not included in the top 30% or the bottom 30% of firms as measured...
Posted by: Vijay Govindarajan - 11/05/2019 at 06:56 am
The Vijay Govindarajan Video Series
My Three Box Solution Video Series launches on:
Harvard Business Review
Posted by: Vijay Govindarajan - 10/09/2019 at 06:17 am
To Lower Health Care Costs, Look to International Innovations
It’s hardly surprising that health care is shaping up to be a central issue of the 2020 U.S. presidential campaign. Despite several plans floated by Democratic candidates, much of the debate still comes down to one question: Who will get stuck with the bill?
Read the entire post on Fortune
Posted by: Vijay Govindarajan - 09/26/2019 at 01:04 pm
No, WeWork Isn’t a Tech Company. Here’s Why That Matters
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 growth). It also renewed questions about WeWork’s claims of being a...
Posted by: Vijay Govindarajan - 08/21/2019 at 07:55 am
The Gap Between Large and Small Companies Is Growing. Why?
Research and news headlines are replete with the idea that traditional large companies can’t innovate, and that smaller digital companies will render many larger ones extinct. While we’ve seen numerous startups of the last thirty years not only disrupt businesses but become the megacorporations of today, we wondered whether this disruption is accelerating with the momentum of digital...
Posted by: Vijay Govindarajan - 08/16/2019 at 07:21 am
Thinkers 50 nomination for Geoffrey Parker, Marshall Van Alstyne, and Sangeet Choudary
I strongly endorse three thought leaders for Thinkers 50 2019 List. Please send your nominations for Geoffrey Parker, Marshall Van Alstyne, and Sangeet Choudary by going to this link: https://thinkers50.com/nominate-2019/
It is easy to make the case for Geoff, Marshall, and Sangeet. Consider a few highlights:
They are the co-authors of the best-selling book Platform Revolution, with nearly 200,000 copies sold; now...
Posted by: Vijay Govindarajan - 08/15/2019 at 07:32 am
The Problem with France’s Plan to Tax Digital Companies
France recently approved a 3% tax on revenues generated by large digital companies in its territory, a move that is now being investigated as a potentially unfair trade practice by the U.S. government.
The French legislation, which would invariably affect U.S. tech giants such as Alphabet, eBay, and Facebook, is the kind of tax that the European Union has wanted to impose for years. Emboldened by the...
Posted by: Vijay Govindarajan - 07/17/2019 at 06:08 am
R&D Spending Has Dramatically Surpassed Advertising Spending
In February, 3G-owned Kraft Heinz Co. wrote down the value of its Kraft and Oscar Mayer brands by $15.4 billion. 3G co-founder Jorge Paulo Lemann described 3G’s mistake of not spending enough to sustain brands: “We bought brands and we thought they would last forever.
Read the entire post at Harvard Business Review>>
Posted by: Vijay Govindarajan - 05/20/2019 at 07:04 am
Vote For Ravi Ramamurti For Thinkers 50
I strongly recommend that you nominate Ravi Ramamurti, University Distinguished Professor and founding Director of the Center for Emerging Markets at Northeastern University, as one of the Top 50 Management Thinkers for Thinkers 50: https://thinkers50.com/vote/
Ravi has done pioneering research on strategy and innovation in emerging markets. His influential contributions include an award-winning article on “reverse...
Posted by: Vijay Govindarajan - 05/07/2019 at 08:31 am
Venkat Venkatraman—Thinkers 50 Vote
I strongly recommend that you vote for Boston University Professor Venkat Venkatraman for Top 50 Management Thinker for Thinkers 50 Rankings as well as for the Distinguished Award for Digital Thinking: https://thinkers50.com/vote/
Venkat has been working at the intersection of IT strategy and business strategy since 1986 when he started his career at MIT. He wrote a seminal paper on IT-induced business...
Posted by: Vijay Govindarajan - 05/07/2019 at 08:30 am