Sharmila Chatterjee says, “The price discount is one of my pet peeves. No, the academic major of the Enterprise Management (EM) track of MIT Sloan School of Management’s MBA program doesn’t have it for deal-seeking clients. Rather, it is a stitch in an ongoing thread of conversation about big-picture thinking honed by years of research.
Chatterjee is a Business-to-Business (B2B) marketing specialist and an award-winning case writer who examines issues in the areas of distribution, sales force management and relationship marketing. “Certainly no one should be too involved in pricing,” she says, “but get a similar return on value through your offerings, such that you can maintain the investment for your brand’s long-term success.” Huh.
Citing Millward Brown’s finding that brands account for more than 30 percent of the market value of companies in the S&P 500 Index, economist Acknowledged that for many companies, their brand is their most valuable asset. Consider United Airlines’ 2017 branding crisis, which resulted in their stock plummeting by $1.4 billion in just days after video footage emerged of a passenger being forcibly removed from an overbooked flight.
According to Chatterjee, brand is a function of customer experience. In the opinion piece for 2019 USA Today, Chatterjee underscored the importance of customer experience by examining the case of brick-and-mortar (B&M) retailers. When e-commerce emerged in the early 1990s, traditional retailers tried to compete by slashing prices. As a result, they were forced to cut costs elsewhere: They undervalued sales teams, neglected investment in training, and neglected merchandising and product development—all to the detriment of the personalized customer experience.
His misunderstanding of the situation resulted in a self-fulfilling prophecy. Customers flocked online for discounts, leaving big brands such as RadioShack, Toys R Us, and Sears to file for bankruptcy, among others. In an unexpected twist, the rise of the digital age highlighted the importance of the human interface. Today, savvy retailers recognize the benefits of combining e-commerce and B&M, integrating online and offline. “Technology is a great facilitator and enabler. Problems arise when we think of technology as a panacea,” warns Chatterjee. “Human capital is critical to successful results in most cases – reducing it comes at a great cost. “
For further evidence of the need for human-technology complementarity, we need look no further than the high rates of technology implementation failures experienced by businesses today. In 2001, Gartner reported a 50 percent failure rate of customer relationship management (CRM) implementations. Fast-forward to 2021, and those numbers have only grown. How to reconcile that with the fact that CRM spending shows no signs of slowing down, and for many businesses, CRM has become the biggest revenue segment of spending in enterprise software?
Meanwhile, a recent study conducted by MIT Sloan Management Review with Boston Consulting Group found that technology implementation failure rates of 70 percent or higher are ideal, and only 10 percent of companies report a significant return on their AI investment. “There is clearly a lot of potential for technology to provide value, but the potential is not being realized, and therein lies the role of human capital,” says Chatterjee.
In an effort to understand the high rate of technology implementation failures, particularly in the B2B context, Chatterjee conducted an empirical analysis of organizations purchasing and implementing business intelligence software. It found that the most important predictors of both successful technology assimilation and overall customer satisfaction were related to a set of abstractions that the buyer assigned to the software vendor; The “soft” service aspect reflects an overall understanding of the customer’s business context, value creation capability and the path of value.
She calls this a “value mindset.” Once a business has a competing product, they must be able to communicate how to best extract the potential value from the technology. This means, among other things, essential change management in legacy processes as well as best business practices and sharing lessons learned from failure with the buyer. According to Chatterjee, sellers who communicated a “value mindset” experienced higher rates of customer satisfaction—to the extent of a three-to-one effect. “Again, this demonstrates the incredible value of the human interface in spades—value not communicated, value not delivered. Again, technology and humans complement,” she explains.
Chatterjee’s research began with a fascination with information silos during his time as a graduate student at the Wharton School, where he first came across a statistic that found that only 30 percent of marketing leads were generated by sales teams. was followed. This revelation about differences in the sales-marketing interface was something that Chatterjee incorporated into years of research in the areas of sales lead management and customer retention. Focusing on this disconnect between human behavior and the rhythms of capitalism, she went on to conduct the first few studies in the important area of the sales-marketing interface, specifically sales leadership management, a study in which she and her colleagues Titled “The Sales Lead Black Hole: On the Follow-up to Marketing Leads of Sales Rip.”
A self-proclaimed empiricist in her research, Chatterjee surveys analysis with econometric methods that test models in the real world. This focus on real-world business challenges extends to his administrative role leading the EM track at MIT. All MBA programs deliver content, whether in finance, marketing, operations or leadership. But at the institute, Chatterjee stresses the importance of mindset. From the outset, the EM track encourages students to think like CEOs on the path to future leadership. In practice, this means training students to move away from muted thinking by adopting a holistic, cross-functional approach to problem-solving in order to transform organizations.
The best way to instill this leadership mindset is for students to work on real-life business projects and challenges with companies, while applying theoretical concepts and frameworks learned in classes. In their first year, students are thrown into the deep end. Through the Enterprise Management Lab (EM-Lab), EM track students are provided with the opportunity to work with large enterprises to solve business challenges. “My students’ work on real business challenges embodies the MIT motto “Men’s at Manus.” mind and hand,” she says.
Companies such as Procter & Gamble/Gillette, Amazon, BMW and IBM have participated in EM-Lab projects. “MNCs come back to us year after year because we provide useful findings that they can apply to their companies,” says Chatterjee. Plus, MIT students benefit from real-world experience, refining their research skills while developing the mindset of future business leaders. “It’s a very symbiotic relationship, a partnership that benefits everyone,” Chatterjee says.