Faculty & Research
Karim R. Lakhani

Karim R. Lakhani

Dorothy and Michael Hintze Professor of Business Administration

Dorothy and Michael Hintze Professor of Business Administration

Technology and Operations Management
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Karim R. Lakhani
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Featured Work Publications Awards & Honors

Karim R. Lakhani is the Dorothy & Michael Hintze Professor of Business Administration at the Harvard Business School. He specializes in technology management, innovation, digital transformation and artificial intelligence (AI). His innovation-related research is centered around his role as the founder and co-director of the Laboratory for Innovation Science at Harvard and as the principal investigator of the NASA Tournament Laboratory. Karim is known for his original scholarship on open source communities and innovation contests and has pioneered the use of field experiments to help solve innovation-related challenges while simultaneously generating rigorous research in partnership with organizations like NASA, Harvard Medical School, The Broad Institute, TopCoder, The Linux Foundation and various private organizations. His digital transformation research investigates the role of analytics and artificial intelligence (AI) in reshaping business and operating models. This research is complemented through his leadership as co-founder of the Harvard Business School Digital Initiative and as co-founder and co-chair of the Harvard Business Analytics Program, a university-wide online program transforming mid-career executives into data-savvy leaders.

Karim has published over 150 peer-reviewed papers in leading management, economics and natural science journals, executive-oriented articles in Harvard Business Review and MIT Sloan Management Review, and Harvard Business School case studies. He is the co-editor of two books from MIT Press on open and distributed innovation models including Revolutionizing Innovation: Users, Communities and Open Innovation (2016) and Perspectives on Free and Open Source Software (2005). He is the co-author of Competing in the Age of AI (2020) a book published by the Harvard Business Review Press. His research has been featured in BusinessWeek, The Boston Globe, The Economist, Fast Company, Inc., MarketWatch, The New York Times, National Public Radio, Science, The Wall Street Journal, The Washington Post, WBUR, WGBH, and Wired.

Karim has taught extensively in Harvard Business School’s MBA, executive, doctoral and online programs. He has co-developed new courses on Digital Innovation & Transformation, Digital Strategy and Innovation, and Laboratory to Market. He co-chairs the HBS executive program on Competing with Big Data and Business Analytics, various custom executive education offerings and developed the HarvardX online course on Technology Entrepreneurship.

Karim was awarded his Ph.D. in management from the Massachusetts Institute of Technology. He also holds an SM degree in Technology and Policy from MIT, and a bachelor’s degree in Electrical Engineering and Management from McMaster University in Canada. He was a recipient of the Aga Khan Foundation International Scholarship and a doctoral fellowship from Canada's Social Science and Humanities Research Council. Prior to coming to HBS he served as a Lecturer at MIT’s Sloan School of Management. Karim has also worked in sales, marketing and new product development roles at GE Healthcare and was a consultant with The Boston Consulting Group.

Featured Work
Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World

In industry after industry, data, analytics, and AI-driven processes are transforming the nature of work. While we often still treat AI as the domain of a specific skill, business function, or sector, we have entered a new era in which AI is challenging the very concept of the firm. AI-centric organizations exhibit a new operating architecture, redefining how they create, capture, share, and deliver value.

Marco Iansiti and Karim R. Lakhani show how reinventing the firm around data, analytics, and AI removes traditional constraints on scale, scope, and learning that have constrained business growth for hundreds of years. From Airbnb to Ant Financial, Microsoft to Amazon, research shows how AI-driven processes are vastly more scalable than traditional processes, drive massive scope increase, enabling companies to straddle industry boundaries, and enable powerful opportunities for learning--to drive ever more accurate, complex, and sophisticated predictions.

When traditional operating constraints are removed, strategy becomes a whole new game, one whose rules and likely outcomes this book will make clear. Iansiti and Lakhani:

Present a framework for rethinking business and operating models; Explain how "collisions" between AI-driven/digital and traditional/analog firms are reshaping competition and altering the structure of our economy; Show how these collisions force traditional companies to change their operating models to drive scale, scope, and learning; Explain the risks involved in operating model transformation and how to overcome them; Describe the new challenges and responsibilities for the leaders of these firms.

Packed with examples--including the most powerful and innovative global, AI-driven competitors--and based on research in hundreds of firms across many sectors, this is the essential guide for rethinking how your firm competes and operates in the era of AI.

Revolutionizing Innovation: Users, Communities, and Open Innovation
by Dietmar Harhoff (Editor), Karim R. Lakhani (Editor)

The last two decades have witnessed an extraordinary growth of new models of managing and organizing the innovation process that emphasizes users over producers. Large parts of the knowledge economy now routinely rely on users, communities, and open innovation approaches to solve important technological and organizational problems. This view of innovation, pioneered by the economist Eric von Hippel, counters the dominant paradigm, which cast the profit-seeking incentives of firms as the main driver of technical change. In a series of influential writings, von Hippel and colleagues found empirical evidence that flatly contradicted the producer-centered model of innovation. Since then, the study of user-driven innovation has continued and expanded, with further empirical exploration of a distributed model of innovation that includes communities and platforms in a variety of contexts and with the development of theory to explain the economic underpinnings of this still emerging paradigm. This volume provides a comprehensive and multidisciplinary view of the field of user and open innovation, reflecting advances in the field over the last several decades.

The contributors -- including many colleagues of Eric von Hippel -- offer both theoretical and empirical perspectives from such diverse fields as economics, the history of science and technology, law, management, and policy. The empirical contexts for their studies range from household goods to financial services. After discussing the fundamentals of user innovation, the contributors cover communities and innovation; legal aspects of user and community innovation; new roles for user innovators; user interactions with firms; and user innovation in practice, describing experiments, toolkits, and crowdsourcing, and crowdfunding.

Motivating Effort in Contributing to Public Goods Inside Organizations: Field Experimental Evidence
We investigate the factors driving workers’ decisions to generate public goods inside an organization through a randomized solicitation of workplace improvement proposals in a medical center with 1200 employees. We find that pecuniary incentives, such as winning a prize, generate a threefold increase in participation compared to non-pecuniary incentives alone, such as prestige or recognition. Participation is also increased by a solicitation appealing to improving the workplace. However, emphasizing the patient mission of the organization led to countervailing effects on participation. Overall, these results are consistent with workers having multiple underlying motivations to contribute to public goods inside the organization consisting of a combination of pecuniary and altruistic incentives associated with the mission of the organization.
The Challenge of Digital Transformation
The ubiquity of digital technology and internet connectivity is driving both new and old players across all industries to invest in new capabilities, define new business models, and compete in new ways. From software to automobiles, from healthcare to financial services, models for value creation and value capture are evolving rapidly. In the Summit’s opening session, Prof. Karim R. Lakhani will give you insight into how organizations are transforming — to go far beyond simply remaining relevant, and to become innovative leaders in new and varied industries.
Digital Ubiquity: How Connections, Sensors, and Data Are Revolutionizing Business
by Marco Iansiti and Karim R. Lakhani

When Google bought Nest, a maker of digital thermostats, for $3.2 billion just a few months ago, it was a clear indication that digital transformation and connection are spreading across even the most traditional industrial segments and creating a staggering array of business opportunities and threats.

The digitization of tasks and processes has become essential to competition. General Electric, for example, was at risk of losing many of its top customers to nontraditional competitors—IBM and SAP on the one hand, big data start-ups on the other—offering data-intensive, analytics-based services that could connect to any industrial device. So GE launched a multibillion-dollar initiative focused on what it calls the industrial internet: adding digital sensors to its machines; connecting them to a common, cloud-based software platform; investing in software development capabilities; building advanced analytics capabilities; and embracing crowd-based product development. With all this, GE is evolving its business model. Now, for example, revenue from its jet engines is tied to reduced downtime and miles flown over the course of a year. After just three years, GE is generating more than $1.5 billion in incremental income with digitally enabled, outcomes-based business models. The company expects that number to double in 2014 and again in 2015.

Using the Crowd as an Innovation Partner
by Kevin J. Boudreau and Karim R. Lakhani

From Apple to Merck to Wikipedia, more and more organizations are turning to crowds for help in solving their most vexing innovation and research questions, but managers remain understandably cautious. It seems risky and even unnatural to push problems out to vast groups of strangers distributed around the world, particularly for companies built on a history of internal innovation. How can intellectual property be protected? How can a crowdsourced solution be integrated into corporate operations? What about the costs?

These concerns are all reasonable, the authors write, but excluding crowdsourcing from the corporate innovation tool kit means losing an opportunity. After a decade of study, they have identified when crowds tend to outperform internal organizations (or not). They outline four ways to tap into crowd-powered problem solving—contests, collaborative communities, complementors, and labor markets—and offer a system for picking the best one in a given situation. Contests, for example, are suited to highly challenging technical, analytical, and scientific problems; design problems; and creative or aesthetic projects. They are akin to running a series of independent experiments that generate multiple solutions—and if those solutions cluster at some extreme, a company can gain insight into where a problem’s “technical frontier” lies. (Internal R&D may generate far less information.)

 

Open Innovation – How can I use the crowd?
February 26, 2016, Entrepreneurship and Small Business Research Institute
Innovation has become an urgent imperative for entrepreneurial and established organizations. Over the last decade, in industries as diverse as fashion design, media software, life sciences, pharmaceuticals and automotive, the most cutting edge organizations have started to externalize their innovation process by working actively with communities and sponsoring contests – so called open innovation. At this lecture, Karim Lakhani from Harvard Business School will provide best practice examples and a framework for using communities and contests to solve the most pressing innovation problems.

He is the Principal Investigator of The Crowd Innovation Lab at Harvard's Institute for Quantitative Social Science, which has worked closely with strategic partners at NASA, Harvard Medical School, Scripps Research Institute, various US government agencies and private sector partners. The idea is to solve innovation problems while simultaneously driving social science insights on the optimal organization of crowd-based innovation. Professor Lakhani will also discuss the Lab's experience in working with its strategic partners to drive change in the organization of innovation.
The push to legalize crowdfunding

Legislation in Congress could make it easier for everyday people to become investors in small companies. Harvard Business School’s Karim Lakhani and entrepreneur Slava Menn tell Kara why “crowdfunding” is all the rage.

OCT TechNovation: Accessing the Ideas Cloud
Through a renewed focus on innovation and technology, NASA seeks to be an important catalyst for intellectual and economic expansion for the nation. Our inaugural TechNovation Speaker Forum gathered NASA employees from across the agency to listen to our special presenter Karim R. Lakhani, an assistant professor at Harvard Business School who specializes in management of technological innovation and product development in firms and communities. Lakhani discussed innovative approaches to solving problems by leveraging the knowledge of virtual communities, known as "the cloud" and by using distributed or open innovations. The program was carried live on NASA Television with Q&A from participating NASA centers.

MIT Communications Forum, October 4, 2007

For the forum's topic of collective intelligence, Karim Lakhani participated as a speaker in "a conversation about the theory and practice of collective intelligence, with emphasis on Wikipedia, other instances of aggregated intellectual work and on recent innovative applications in business."  A podcast and a webcast are available through the forum's website.

Harvard Business School Case on Wikipedia: Wikipedia (A)
by Karim R. Lakhani and Andrew P. McAfee, Harvard Business School Case, January 30, 2007
wikipedia

On August 24, 2006, the "Enterprise 2.0" entry in the Web-based encyclopedia Wikipedia was made a candidate for deletion. Wikipedia was an unusual encyclopedia because virtually anybody could start a new article or edit an existing one. This egalitarian philosophy had enabled very rapid growth but also led to the creation of some articles that did not meet established standards. Wikipedia's "articles-for-deletion" (AfD) process was an attempt to deal with this problem. Anyone could nominate an article for deletion; nomination caused a notice to be placed on the article's page alerting readers to the deletion request and pointing them to a special page where they could debate it. An AfD process lasted five days, after which a Wikipedia administrator reviewed the arguments and made a decision on the fate of the article.

In the spirit of Wikipedia we have released this under a GFDL license, and we will teach it in Andrew McAfee's second year MBA course on Managing in the Information Age this Spring to get students familiar with the inner workings of a distributed community and to grapple with issues related to authority, decision making, expertise and norms of behavior in a community setting.

Perspectives on Free and Open Source Software
Edited by Joseph Feller, Brian Fitzgerald, Scott A. Hissam and Karim R. Lakhani
Perspectives on Free and Open Source Software

What is the status of the Free and Open Source Software (F/OSS) revolution? Has the creation of software that can be freely used, modified, and redistributed transformed industry and society, as some predicted, or is this transformation still a work in progress? Perspectives on Free and Open Source Software brings together leading analysts and researchers to address this question, examining specific aspects of F/OSS in a way that is both scientifically rigorous and highly relevant to real-life managerial and technical concerns.

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Awards & Honors
Winner of the 2015 Case Centre Award in the Production and Operations Management category for “Open Innovation at Siemens” with Katja Hutter, Stephanie Healy Pokrywa, and Johann Fuller (HBS Case 613-100).
Finalist for the 2013 McKinsey Award for the best article in Harvard Business Review for “Using the Crowd as an Innovation Partner” with Kevin J. Boudreau (April 2013).
Finalist for the 2013 Best Paper in Management Science from the Manufacturing and Service Operations Management Society for “Incentives and Problem Uncertainty in Innovation Contests: An Empirical Analysis” with Kevin J. Boudreau and Nicola Lacetera (May 2011).
Winner of the 2008 TUM Research Excellence Award in Innovation and Leadership from Technische Universität München and the Peter Pribilla Foundation.
Received the 2011 Innovative Management Partner (IMP) Excellence in Innovation Research Award from Innsbruck University School of Management.
Finalist for the 2006 Best Dissertation Award from the Technology and Innovation Management Division of the Academy of Management.
Recipient of the 2006 Brad W. Hosler Outstanding Student Paper Award at the Portland International Conference on Management of Engineering and Technology.
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