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  • Are personal computers dead?

    An article on pronounces that the personal computer is dead. Year-to-year sales have fallen by 14% and hence the grim prognosis.

  • End of Saturday postal service may be good for Netflix

    Netflix stocks reacted positively to the news that the United States Postal Service (USPS) will be cutting its mail service from six days a week to five days a week. The rationale presumably is that the cuts in postal delivery could result in subscribers watching fewer DVDs thereby resulting in lower costs for Netflix.

  • Pro-Employee Talent Management: A Strategic View

    Joe Nocera, Op-Ed columnist of the New York Times, recently discussed some interesting research by MIT professor Zeynep Ton, which has been published in a book titled “The Good Jobs Strategy.” The central idea of the book echoes the logic I described in a previous blog post “Higher Minimum Wages? Company Strategy is Key!” See Nocera’s Op-Ed here.

  • Does Noise Help Creativity?

    While ambient noise is omnipresent, our understanding of its impact on human cognition, particularly creative cognition, has been limited. Hence, in a recent project we examined the effect of ambient noise on consumers’ creativity and determined how and why background noise can affect creativity.

  • Congratulations, Dave Washburn (EMBA 2009)

    Congratulations to David Washburn (EMBA 2009) for being named as the president of the University of Tennessee Research Foundation (UTRF). UTRF is responsible for commercializing technology created by the University of Tennessee faculty. Prior to his move to Tennessee in 2011, David was at the University of Illinois where he was Senior Technology Manager at the Office of Technology Management. 

    We’re very elated at David’s career progress and wish him continued success.

  • About the Blog

    Innovative Leadership in a Connected World

    Welcome to the blog created and run by the Executive MBA faculty at the University of Illinois at Urbana-Champaign in Downtown Chicago.

    The University of Illinois at Urbana-Champaign is long renowned for its achievements in pioneering some of the greatest inventions and educating legendary CEOs and entrepreneurs. The quality of our education is exemplified by the 600,000 loyal alumni around the world.

  • Great Universities Help Build Great Regional Economies

    Matt Yglesias at Slate has a great blog post on how Universities are the key ingredients to 21st century success. Matt suggests that great Universities create neighborhood retail clusters alongside medical facilities to create a vibrant regional knowledge-based economy that ensures survival of cities. He illustrates his point with an example from Pittsburgh that has enjoyed major job diffusion thanks to Carnegie Mellon and the University of Pittsburgh while Detroit has languished due to the absence of a great University in its midst(University of Michigan is located in Ann Arbor and not Detroit).

  • Higher Minimum Wages? Company Strategy is Key!

    Recently, we have seen a number of companies increase wages for their lowest paid employees. These changes are happening amidst a larger political debate about what constitutes a living wage, and whether workers have a right to expect a living wage for a full day's work.

  • Cash is King

    In a recent op-ed (co-written with Viral Acharya) in Financial News (registration required for access), I discuss the unpredictable future of US treasuries. It is estimated that corporations are sitting on about $2 trillion in cash which are typically held in bank deposits, money market funds and US treasuries. Does the recent downgrading of US debt by Standard & Poor distort the perceptions of these corporations that US treasuries are still safe havens? What are the other investing options for corporations in case there is another downgrading of US treasuries by another rating agency, political turmoil or increase in inflation? Where would these monies go?

  • Driverless Cars Are Here to Stay

    This week, California Governor Jerry Brown signed a bill to enable driverless cars to be operated and tested on the public roads of California. Google’s Sergey Brin expects that people will be able to drive these robot cars in the next few years. A few years ago, people were discounting the possibility of driverless cars and here they are. This innovation is a potential game-changer and is bound to change how several industries operate. 

  • Could More Transparent Accounting Increase Expected Mispricing in Equity Markets?

    Experienced equity analysts think so.  At least that is the answer provided by my recent research (with Brooke Elliott from University of Illinois at Urbana-Champaign).  We find that analysts expect more and longer lasting stock mispricing when the effects of certain business transactions are more transparently reported and a firm’s most important investors are transient rather than dedicated institutional shareholders.

  • Google Glass: More to it than meets the eye

    Google Glass is basically a smart pair of eye glasses that is location-aware with an inbuilt camera and GPS. One can use head movements to scroll and click on information but it will also use voice input and output. The eyewear is a standalone product that runs on Android and is connected directly to the cloud. Check out this incredible video on what Google Glass can do. Industry watchers think that a mainstream product is likely to be available sometime in late 2013 or 2014 for the price of a smartphone.

  • Why the Supreme Court Needs to Know Standard Error

    Can you be completely sure that someone is “mentally disabled”?  This is what the Supreme Court must decide for the case that was presented this past Monday March 3rd.  The case involves Freddie Lee Hall of Florida who is sentenced to die for raping and killing a 21 year old woman who was seven months pregnant. In 1978, he was arrested and sentenced to death penalty.

  • If you build it, will they come?

    Here is a story of how two electric car companies took two different roads to meet the recharging needs of their customers.

  • Did the 2007 Mortgage Market Crisis Affect Financial Policies?

    What is the real impact of the 2007 credit crisis? Are there sizeable effects of financial contracting on corporate financial policies following a shock to the supply of credit?  Murillo Campello, Bruno Laranjeira, Scott Weisbenner and I examined this issue.

  • Congratulations, Senator Mike Hastings!

    Many congratulations to our EMBA alumnus Michael Hastings (class of 2011) for being elected as the Senator from the 19th Senate District of Illinois.

  • The PC is Not Dead (Yet!)

    My friend, Andrew Stein (EMBA ‘ 11) has a great post on the premature obituaries for personal computers (PCs). His argument is that PCs complement mobile devices including tablets and smart phones by creating digital content.

  • Comparing Apples and Pennies

    J. C. Penney has embarked on a new pricing strategy by eliminating the constant discounting with its version of everyday low prices. Initial results are dismal. The number of people coming into J.C. Penney has dropped by 10 percent and sales have fallen by an average of 19 percent.

  • How Do We Expand Entrepreneurship?

    Insight labs, a Chicago-based agency, is using brainstorming as means to solving seemingly difficult problems in the non-profit . Check out the article in Fast Company. Jeff Leitner is the thought architect behind these panels. According to Leitner, these panels work because recruiting smart people to engage in brainstorming on problems that they do not have a direct interest in leads to higher levels of innovative thinking. Insight labs uses these ideas that come out of these mission-driven, not-for-profit work to their corporate gigs and have unearthed an innovative business development strategy.

  • Geography Matters!

    Many companies manage their business on some geographic basis—whether called districts, territories, markets, regions, or zones— and evaluate metrics and managers correspondingly. It is not uncommon to find large variations in market shares for brands across these geographic markets. These regional skews appear to be ubiquitous across most industries.

  • eyeing same-day delivery?

    Farhad Manjoo has an interesting article in Slate magazine about Amazon’s plan for same day delivery. Same day delivery will be made possible because Amazon has decided (not confirmed yet!) to invest in warehouses in large metropolitan areas in the country. Why invest in high cost warehouses now? Wouldn’t that strategy negate the price advantage of

  • Best Buy: The Beginning of the End?

    Farhad Manjoo has an interesting article in Slate about Best Buy. The essential argument that Manjoo makes is that Best Buy must prune its vast selection of electronic items. Manjoo contends that Best Buy’s selection cannot match that of Amazon and the other e-retailers. Going small with the selection would entail lower search costs for Best Buy’s customers, and enable Best Buy’s employees to become experts on a smaller selection. Intimate stores coupled with friendly staff will boost Best Buy’s sagging fortunes.

  • Should breakthrough innovations be designed to look like existing products?

    Breakthrough products, by definition, imply a sharp break from existing products. Should these products be designed so they look very different from existing products in order to communicate enhanced value to consumers and therefore succeed in the marketplace? The answer reflects an important innovation principle.

  • Innovation as Risk Management for Future Revenues

    Note from Raj Echambadi: The original title of this post was “Innovation is THE output not just means to the output.” I shared this post with Kurt Bock, CEO of COUNTRY Financial, who suggested this alternative title. Many thanks to Kurt for the title that I think best captures the intent of the post.

    Marc Andreessen of Netscape fame (an alumnus of the University of Illinois) said something great on the Charlie Rose show last week.

  • Saving Dell

    Dell computers has reportedly gone private. It is an interesting turn of events at Dell, once the darling of Wall Street. In a larger sense, this move to go private could be a good thing for Dell’s prospects.

  • A (gigapixel) picture is worth more than a million (?) words!

    Many of us are fairly comfortable with the 12-megapixel photos produced by our digital cameras.

    Researchers from Duke University and the University of Arizona have unveiled the world’s first gigapixel camera.  This camera is a major exercise in innovation. When we want a bigger picture, we use wide angle lenses that capture a wider visual field but form clear images as well. Increasing sizes of lenses create blurs and the best lenses tend to reduce these blurs as much as they can but they can get pretty expensive. Moreover high resolution lenses are huge in size limiting their practicality.

  • Congratulations to Alvin Roth, Winner of the 2012 Nobel Prize in Economics

    Note from Raj Echambadi: Many thanks to Larry DeBrock for writing this blog post about Alvin Roth. Larry and Al Roth were colleagues for a while at the University of Illinois. One of Larry’s early academic publications was with Al Roth entitled ”Strike-two: Labor-management negotiations in major league baseball” in the Bell Journal of Economics in 1981. It is an interesting paper that investigates the hyphenated strike in major league baseball in 1980.

    The 2012 Nobel Prize in Economics is being shared by two American professors, Al Roth and Lloyd Shaply.  We are particularly proud of one of these two gifted economists. Al Roth started his faculty career at the College of Business at the University of Illinois at Urbana-Champaign.  An undergrad from Columbia University, Al earned his Ph.D. from Stanford in 1974 and joined Illinois that same year, holding joint appointments in the Department of Business Administration as well as the Department of Economics (which at that time was part of the Business school).  In 1977 he was promoted to Associate Professor and in 1979 to Full Professor.  That remarkably rapid progression from brand new Assistant Professor to the top ranks of the professoriate was an early predictor of his tremendous abilities.  In 1982, Al moved to the University of Pittsburgh. 

  • Does the Market Always Work for Public Services? Advocating a Balanced Approach

    There is much discussion of government administration versus privatization in recent years ranging from the discourses of academic economists to that of TV News commentators.   For some, the issue may seem settled with the incantation of “let the market work.” Although receiving less media attention, business school research has much to offer and with nuanced real-world institutional detail to inform the conversation. As an example, consider the case of prison privatization, which poses particular ethical, legal, and empirical challenges. While some research suggests that competitive pressures will lead to efficiency in the operation of private prisons such as Corrections Corporation of America (CCA) and the GEO Group, Inc., other research maintains that competition for prison beds occurs in a constrained market that parallels the contracting problems that have been identified in the defense industry.

  • Business Model Change Prompts Government Lawsuit

    Last week, the Department of Justice (DOJ) sued five book publishers and Apple for colluding to sell e-books together and shifting to an “agency” pricing model to collectively raise e-book prices. Three of the five publishers (HarperCollins, Simon & Schuster and Hachette) have agreed to settle the case whereas Macmillan and Penguin have vowed to fight the lawsuit. Apple has been charged with keeping all publishers informed of the status of their negotiations to sell e-books on ipad and ensuring identical deals to all publishers. Interestingly, Random House, a major publisher, is not part of the law suit because they did not agree to the agency model in the initial stages.

  • What can we learn from J.C. Penney''s firing of its CEO?

    J. C. Penney fired its CEO Ron Johnson earlier this month and brought back the former CEO.  The firing is not surprising given J.C. Penney’s performance slide in the past year. Johnson, the architect of Apple retail stores, was never able to replicate his magic at J.C. Penney’s. Now J.C.Penney’s survival is at stake.

  • Walgreens + Johns Hopkins = Innovative Health Care Delivery

    In the heels of discussions in this blog that pharmacy-based health care has a bright future (for example, see link, link), comes news that pharmacies are experimenting with partnerships with health organizations. For example, Walgreens is partnering with Johns Hopkins to create a retail hub for community-based care and CVS recently announced a partnership with Parkridge Health System to run seven clinics near Chattanooga, TN.

  • Google’s Latest (Uber) Investment

    Uber, the technology start-up, reports that it has raised $258 M in financing from a variety of investors including Google Ventures.  Uber’s software allows anyone to request a taxi ride from drivers who turn their downtime into a money-making opportunity. Uber started off as a convenient limo service but has now morphed into a ride sharing company through its UberX service. Uber’s ride (no pun intended) has not been smooth so far and it has engendered hostile responses from taxi cab services and local regulators. Some of these expressed concerns including safety and liability issues need to be sorted out.

  • Crowdfunding: A Win for Startups?

    The Academy for Entrepreneurial Leadership (AEL) at the University of Illinois, in partnership with the Illinois EMBA program, hosted a forum on crowdfunding on May 10th. A panel of experts from the Chicago entrepreneurship community answered questions from faculty moderators before a group of nearly 100 people at the Illini Center. The insights generated were tremendous.

    For insights on the potential impact of equity based crowdfunding on entrepreneurship, check out this short video.


  • Constitutionality and the Affordable Care Act

    The news media is, correctly, abuzz with the monumental issue going before the Supreme Court this week. Indeed, people started lining up on Friday night for the right to get into the chambers today for the start of the three day hearing (the three days the justices have allotted this case is in itself a is the longest "hearing" granted to any issue in over 40 years at the SC).

  • Retail Clinics: Bad for Health care?

    With rising health care costs, retail clinics, typically staffed by nurse practitioners, have increased in popularity (about 6 million visitors in 2009) due to easier access. These clinics are usually located in convenient locations and patients can visit these clinics after hours. Most importantly, these retail clinics are significantly cheaper than regular primary care physician visits. Most patients visit these clinics for simple acute conditions and these clinics are usually appropriate (and cost efficient) for diagnosing these ailments rather than visiting larger hospitals. Interestingly, a new RAND study of health insurance records, finds that these retail clinic visits reduce visiting primary care for subsequent acute new conditions by about 27% and that continuity of care is hampered leaving some health experts worried.

  • Microsoft Surface: A Wise Move?

    Microsoft unveiled a new tablet “Surface” last week. This is Microsoft’s first major foray into developing serious computer hardware and a serious attempt to stem the rising dominance of Apple that holds a commanding 62% share in the tablet industry through its iPads. Surface is to run on either Windows RT or Windows 8 that promises a seamless experience from the desktops to the mobile devices including smartphones and tablets. Surface also has a keyboard and a kickstand that makes it easier to prop the tablet on the table and work.

  • How to avoid becoming dinosaurs of the future?

    Google has just announced a mind boggling statistic: in a given day, their Google translate service translates in a single day roughly as much text as you would find in one million books. Wow!

  • Life's Cruel Irony: Google Wins USA Today's Print Advertisement Prize

    Google Creative Labs won the first prize in a contest to encourage creativity in print advertising. The prize was $1 million worth of full-page ad space in USA Today, the organizer of the contest. Among other things, Google Creative Labs is known for Google News, a free online aggregator of news. Interestingly, Google out-earned the entire newspaper industry in 2011.

  • Congratulations to the Graduating (EMBA) Class of 2012!

    This Saturday marks the graduation ceremony for the EMBA 2012 class. Hearty congratulations to the class for choosing to invest in themselves, and accomplishing a major educational milestone. We are all extremely proud of all their achievements. We would also like to congratulate the spouses and significant others, families and friends of our students for being the wind beneath their wings, and enabling them to pursue their dreams.

  • Congratulations, Joe DiPietro (EMBA 2012)

    Our heartiest congratulations to Joe DiPietro for being named as the Vice President, Parts, NA for AGCO Corporation. Joe holds a B.S. in Industrial Distribution and an Executive MBA from the University of ILLINOIS. He was most recently Director, Supply Chain within the parts division in North America.

    We’re so proud of Joe’s accomplishments. Please join us in congratulating Joe on his promotion and best wishes for continued successes in the future.

  • Lesson in Strategic Innovation, Brought to you by Dr. Dre

    Here is a pop quiz for you. Who’s the market leader in the $ 2.4 Billion U.S. head phones category?

  • Do Price Controls Work?

    In my Exec MBA microeconomics course, one of the first things we learn is how the “market” works to find a price that correctly matches supply with demand.  At this equilibrium, the amount consumers desire to buy is exactly equal to the amount producers are willing to offer to the market.

  • P&G is customer-centric but what about the rest of the detergent industry?

    There is a fascinating article in the Wall Street Journal about the shrinking laundry soap industry (h/t: Surajit Dutta, EMBA 2014). The significant decline is attributed to P&G’s new laundry product—Tide Pods capsules with fixed detergent quantities and hence prevent customers from over-pouring detergents. As a result, detergent manufacturers are upset with P&G about the sales decline and wonder whether the new product is worth it if it hurts the whole industry. Retailers are also not too thrilled because the margins on the Tide pods are lower than liquid laundry and hence success of Tide pods is equated with shrinking retailer revenues.

  • Why Barnes and Noble's Strategy Makes Perfect Sense?

    A few months ago, Netflix separated the DVD-by-mail and video streaming services into two companies. Netflix reversed the decision quickly and abandoned the decision to spin-off the DVD-by-mail business. Rajshree Agarwal and I wrote an op-ed piece in the Baltimore Sun opposing this decision from a strategy point of view.

  • Innovation Lessons from Erstwhile Ahabs

    I came across an amazing article about the rise and fall of the Whaling industry by Derek Thompson in the Atlantic magazine. Whaling was very popular worldwide in the 1800s and the United States was the dominant player in the whaling industry, the fifth largest sector in the U.S. economy. The main products of whaling were whale oil used as fuels for lamps and whale bones used as stiffeners for ladies clothes.

  • New Wal-Mart: Save Money and Live Healthier?

    There is an interesting graphic from Minute Clinic’s (owned by CVS) presentation to investors. They expect a shortage of 45,000 primary care physicians by 2020 and physician supply is years away from catching up. On the demand side, the health care law is expected to add about 32 million new patients into the system.  So what should we do to provide affordable and convenient health care access for all?

  • Creativity is the Residue of Time Wasted

    After my talks on innovative leadership, I’m often asked whether innovation can be taught. My answer is always an unequivocal “yes.” Of course, innovative leadership is a complex concept with many underlying dimensions but you can train to ensure that these specific dimensions get better. Think of the personal trainers in the gym where they can devise specific exercises for specific parts of the body. Training to be an innovative leader is exactly just like that.

  • Congratulations, Andrea Ruedi (EMBA 2013)

    We’re delighted to announce that Andrea Ruedi (EMBA ’13) has taken up a position as CEO at Fox Development Corporation. This is her second stint with FDC. While previously at FDC, Andrea was instrumental in marketing the Research Park to prospective companies, successfully garnering state funding for infrastructure to allow for the Research Park’s expansion, and developing the I Hotel and Conference Center at Champaign.  Prior to taking the job at FDC, Andrea served as Deputy Director of the Illinois Center for Transportation (ICT) at the University of Illinois at Urbana-Champaign, one of the world’s premier transportation research centers. In that role, Andrea was responsible for strategic planning and business development and also managed ICT’s $30 million research program.

  • Deepak Somaya Wins Best Article Award

    Congratulations to our own Deepak Somaya for winning the California Management Review’s annual Best Article Award for his article “Innovation in Multi-Invention Contexts: Mapping Solutions to Technological and Intellectual Property Complexity.”  This article was co-authored with David Teece and Simon Wakeman. The award is given each year to an article that has made the best contribution to business practice, as judged by a distinguished panel of senior executives.  Deepak Somaya teaches the IP Strategy elective during the EMBA immersion week in Champaign and the Strategic Human Capital course for the second years.

  • Innovative Leadership through Connected Commerce: Lessons from eBay

    John Donahoe, CEO of eBay, delivered the Hallene Lecture at the University of Illinois campus at Champaign last week. Mr. Donahoe, a native of Illinois, was previously managing director at Bain and Company before moving to eBay in 2005. In February, Fortune magazine named eBay in its list of most admired companies in the world.