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Volume 05 | Issue 02 2011

EFMD Global Focus Volume 05 | Issue 02 2011

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Dean David Bach on selecting the best students

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DAVID BACH, DEAN OF PROGRAMMES, IE BUSINESS SCHOOL

The man who never stopped Andrzej Kozminski, founder and head of Kozminski University, one of Central and Eastern Europe’s foremost business schools, on his life and achievements

IE trains entrepreneurial leaders that promote innovation in organisations. Our graduates are exceptional people with exceptional skills and are in great demand by companies the world over.

That’s why we use the GMAT exam. It’s a powerful tool to help ensure that IE selects the right students for our rigorous programmes. The GMAT exam helps our admissions staff assess whether candidates have the skills we require and the corporate world requires too. At IE, we want students to excel in all aspects of our programmes and the GMAT exam is an important tool in helping select the best students with the greatest potential.”

To learn more about the GMAT exam and the products and services it makes possible, visit gmac.com/efmd INSIDE THIS ISSUE 2011 Graduate Management Admission Council© (GMAC©). All rights reserved. The GMAT© logo is a trademark and GMAC©, GMAT© and Graduate Management Admission Test© are registered trademarks of the Graduate Management Admission Council in the United States and other countries.

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Value driven How managers can shape the future

No business…

Is business schools’ business model still working?

Home runs Look at your own company for innovation

Leading edge Helping train leaders in the aid sector

The right thing Why doing right is good for business

Small is OK MBAs and SMEs can work for each other

/

Peter Drucker Society euroPe in co-oPeration with the Drucker inStitute PreSentS EUROPE

ecch the case for learning «A Quest for Legitimacy – How Managers Can Shape the Future»

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The 3rd Global Peter Drucker Forum will provide a unique platform to debate whether the creation of economic and social value can be effectively combined employing capitalism as the value creation engine. The «What» and the «How» will be discussed from a management perspective, in interactive sessions, with a high calibre group of CEOs and senior executives from companies such as Intel, General Electric, Haniel Group, Raiffeisen Zentralbank, Mazars, the Zurich Stock Exchange and Deutsche Telekom. The younger generation will also be involved, with winners of the Global Peter Drucker Challenge Essay Contest participating in various panels and breakouts.

Join us in viEnna

Corporate leaders and managers of institutions across all sectors are being called upon to engage in shaping the future.

We now have a once-in-a-lifetime opportunity to unleash the power latent in people and organizations for the benefit of both business and society. It is a quest for legitimacy suited to meeting the vital role of management in modern societies.

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They make sense only as means to a social end.

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For dEclaration of intErEst and rEgistration.

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1 EFMD Global Focus | Volume 05 | Issue 02 2011

Volume 05 | Issue 02 2011

In focus The main article in this issue of Global Focus (page 8) is a profile and interview with Andrzej Kozminski, soon to retire as Rector of Kozminski University in Warsaw, Poland. It is a compelling story of man who lived through some of the greatest horrors and privations of the last century but whose fortitude and character allowed him to establish one of the foremost business schools in Central and Eastern Europe.

In other articles in this issue, writers take on some of the key challenges that currently face corporations and business schools.

On page 18, for example, the EFMD’s Richard Straub argues forcefully that a management focus on shareholder value and short-term financial results will not be enough to deal with the challenges of the future. In a similar vein, though this time looking at business schools, Kai Peters and Howard Thomas (page 24) suggest that the current business model of business schools is financially unstable and probably unsustainable.

Perhaps a little more optimistically, on page 14 Georg Kell and Jonas Haertle look back at ten years of the UN Global Compact, reflecting on the successes and assessing the future, including the role of management education.

Encouraging innovation, creativity and entrepreneurship is a perennial concern of both management education specialists and business executives. On page 28 Thomas Hedner suggests one way they might be taught based on a successful programme at Sweden’s University of Gothenburg and Emmanuel Perakis argues (page 32) that the best place to find creativity and innovation is inside an organisation.

The issue of leadership and developing it is another recurring theme in these pages. On page 44 Rudi Plettinx and David Altman describe how the Center for Creative Leadership is helping international nongovernmental organisations improve their leadership skills while on page 48 Mark Anderson offers some practical tips on growing leadership within a company.

On pages 52 and 56 Mark Thomas and Julie Perrin-Halot offer a French perspective on the importance of business schools supporting their local and national communities and Anthony Buono and Rajendra Sisodia explain why companies that act with a conscious desire to do the right thing seem to do better than those that do not.

Finally, Martine Plompen outlines the key factors that determine quality in the design and functioning of corporate learning organisations (page 36) and Valérie Claude-Gaudillat (page 64) shows how MBA graduates can find satisfying jobs within small companies – and contribute to their success.

2 www.efmd.org/globalfocus

Volume 05 | Issue 02 2011

Contents Global Focus The EFMD Business Magazine

1 In focus

Executive Editor

4 Talking Shop

Matthew Wood matthew.wood@efmd.org Advisory Board

Eric Cornuel Jim Herbolich Howard Thomas Consultant Editor

George Bickerstaffe bickerstaffe@btinternet.com Contributing Editors

David Altman, Mark Anderson, Anthony Buono, Valérie Claude-Gaudillat, Sylvie Deffayet, Anne Dhoquois, Jonas Haertle, Thomas Hedner, Georg Kell, Rafael Ortega de la Poza, Emmanuel Perakis, Julie Perrin-Halot, John Peters, Kai Peters, Rudi Plettinx, Martine Plompen, Rajendra Sisodia, Richard Straub, Howard Thomas, Mark Thomas Design & Art Direction

Jebens Design www.jebensdesign.co.uk Photographs & Illustrations

Jebens Design Ltd / EFMD unless otherwise stated

©

Editorial & Advertising

Matthew Wood matthew.wood@efmd.org Telephone: +32 2 629 0810 EFMD aisbl Rue Gachard 88 – Box 3 1050 Brussels, Belgium www.efmd.org/globalfocus ©

EFMD

Latest EQUIS accreditations The MBA as entrepreneur Ghemawat's World 3.0 Sustainabilty free download

8 The man who never stopped As a child Andrzej Kozminski hid in the rubble of the Warsaw Uprising and (just) escaped Auschwitz. Today, he is about to end his career as founder and head of one of Central and Eastern Europe’s foremost business schools. Interview by George Bickerstaffe

14 UN Global Compact and PRME – the next decades After ten years of the UN Global Compact Georg Kell and Jonas Haertle reflect on past successes and look forward to the future, including the role of management education

18 A quest for legitimacy: how managers can shape the future Continuing to focus only on shareholder value and short-term financial results will not be adequate to tackle the huge challenges of the future.

What we need, says Richard Straub, is for managers to create value while maintaining our values

24 A sustainable model for business schools?

Kai Peters and Howard Thomas argue that the current business model of business schools is financially unstable and probably unsustainable

28 How to implement an innovation and entrepreneurship curriculum Teaching students innovation and entrepreneurship is never easy. Thomas Hedner advocates a pragmatic and practical approach and offers some how-to suggestions based on a successful programme at Sweden’s University of Gothenburg

32 How to grow creativity and innovation in your company The best place to find creativity and innovation is inside an organisation.

Emmanuel Perakis offers some suggestions on how to make the most of that fact

36 Seeds of change: How corporate learning is taking the lead in corporate transformation Martine Plompen outlines the key factors that determine quality in the design and functioning of corporate learning organisations

3 EFMD Global Focus | Volume 05 | Issue 02 2011

Contents

40 It’s what you do after the sums that matters…

Aston Business School in Britain has introduced a new Executive MBA programme that aims to address some of the frequent criticism the MBA has faced in recent years. John Peters explains

44 Unlocking leadership talent in the humanitarian sector

32

In an era of war and natural disasters, the work of international nongovernmental organisations has never been more vital. But the sector lacks leadership resources. Rudi Plettinx and David Altman describe how the Center for Creative Leadership is helping the helpers

48 Leadership in practice Mark Anderson offers some practical tips on how to extend leadership skills throughout an organisation

52 Beyond the campus: How business schools can contribute to the community Supporting local and national communities has long been a criterion of the EFMD’s EQUIS accreditation system. Mark Thomas and Julie Perrin-Halot recount French experiences in this area

36

56 A conscious purpose Anthony Buono and Rajendra Sisodia explain why companies that act with a conscious desire to do the right thing seem to do better than those that do not – and how this can apply to business school teaching

60 Integrating Generation Y into the workforce Ensuring young people, particularly the much-vaunted Generation Y, have a positive first–time experience of the working world is essential to their future performance argue Sylvie Deffayet and Anne Dhoquois

64 Why MBAs and SMEs should get together

52

Valérie Claude-Gaudillat argues that, contrary to general misconceptions, MBA graduates can find satisfying jobs within small companies – and contribute significantly to their success

66 Global Marketing Competition

MBA graduates can find satisfying jobs within small companies – and contribute significantly to their success page 64

ESIC Business and Marketing School and EFMD together with several institutions are running the 2011 world edition of the Global Marketing Competition. Rafael Ortega de la Poza explains what the competition provides for students and others

4 www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop

EFMD awards EQUIS accreditation to Keio Business School & CENTRUM Católica EFMD would like to warmly congratulate CENTRUM Católica, Pontificia Universidad Católica del Perú, Peru, and Keio Business School, Keio University, Japan, which were recently awarded EQUIS accreditation. The new schools become our first accredited schools in Japan and Peru and this takes the number of accredited schools to 130 across 38 countries.

"We are highly honoured to be the first school in Japan to receive EQUIS accreditation”, said Professor Kono, Dean, Keio Business School. “At the same time, this prestigious accreditation made us recognise anew that we, as a new member of the EQUIS community from Japan, need to continue further upgrading our management education and research. This accreditation is only the beginning of our way to contribute to the development of management education.Keeping this in mind, we sincerely declare that we will make every effort to prove the accreditation worthwhile for the names of both EQUIS and Keio."

Call for papers EFMD is organising its first Management Education Research Conference on 14 – 15 February 2012, hosted by The Lorange Institute of Business, Zürich, Switzerland.

The conference will serve as a platform for bringing together researchers with a focus on higher education and a specific interest in business schools to discuss their original work, particularly on the following general topic areas:

challenges of the changing contexts of business and management and of higher education internationalising business schools in a global context leading and changing business and management schools measurement and determinants of business On behalf of CENTRUM, Fernando D´Alessio, Director General, commented: school performance “CENTRUM Católica is proud to unite with the elite group of EQUIS-accredited value of business school rankings and institutions committed to the highest standards of programme and faculty quality. This achievement is of particular importance to CENTRUM Católica, accreditations innovation and entrepreneurship capacities as it is the only business school in Peru to have earned this prestigious in business and management schools. accreditation and to have been recognised as the 53rd business school in the world to obtain the “Triple Crown” accreditations of EQUIS, AACSB and AMBA. “The EQUIS accreditation affirms our commitment to the sustainable development of Peru and the crafting of responsible leaders through a global learning experience. CENTRUM Católica looks forward to growing with EQUIS to continually provide the highest quality education to members of today´s increasingly global and competitive business environment.”

The deadline for submissions is 15 September 2011. All contributions will undergo a doubleblind refereeing process and the best papers will be considered for publication in a special journal issue. Submissions must be made online.

For further information on EQUIS visit: www.efmd.org/equis

For more information follow the link on: www.efmd.org or contact research@efmd.org.

5 EFMD Global Focus | Volume 05 | Issue 02 2011

Talking shop

CENTRUM Católica looks forward to growing with EQUIS to continually provide the highest quality education to members of today’s increasingly global and competitive business environment.

Fernando D´Alessio, Director General, CentRum Católica, Pontificia universidad Católica del Perú

Tomorrow’s MBA study highlights the rise of the Entrepreneur In its second study of prospective mBas, CarringtonCrisp, an education marketing and market research specialist, in partnership with the association of Business schools and eFmD has found a growing demand for entrepreneurship in the mBa curriculum. entrepreneurship is now in the top five most valuable pieces of content according to a study of 476 prospective mBas in 79 countries.

In the report, Tomorrow’s MBA 2011, CarringtonCrisp found other signs that enterprise is on the rise. Career progression is still the number-one motivation when thinking of studying for an mBa but students recognise the changing job market is putting skills ahead of salary. andrew Crisp, one of the authors of the report, commented: “there’s evidence in the rankings that salary increase post-graduation is becoming less of a distinguishing issue between schools. students are reacting to this and the downturn in financial hiring in recent years has forced students to look at other career options.

“Whether they want control of their own careers by starting their own business or recognise the need to be able to manage a variety of projects in a large business in order to move up in their careers, entrepreneurship skills are increasingly valuable”. eric Cornuel, Director General and CeO of eFmD, added: “entrepreneurship in people and society is vital for future competitiveness. From new venture start-ups to the largest companies, having entrepreneurial skills mixed with the core components of an mBa enhances the value of the qualification for both students and employers.”

Other trends highlighted in this year’s study include: – most valuable course content among prospective mBas is strategic management, Leadership, and managing People and Organisations.

– Less than 10% of the sample has become more negative about the mBa qualification over the past year.

– Only in north america do more than 50% of the sample indicate that they want a traditional two-year mBa programme. across the sample, more respondents want blended learning rather than traditional academic terms and office hours.

The Executive Summary of the study is available on the EFMD website: www.efmd.org or by contacting andrew@carringtoncrisp.com

5 Entrepreneurship is now in the top five most valuable pieces of content according to the recent study

476 The study, Tomorrow's MBA 2011, was conducted with of 476 prospective MBAs from 79 countries

– When asked what had the greatest impact on their perception of the mBa, the answer was most likely to be people, either when visiting business schools, meeting mBa alumni or working with mBa graduates. Information gathering may be dominated by electronic media, but decision making still tends to only take place after a conversation with an alumnus or school staff member.

Less than 10% of the sample has become – there is a continued focus on embedding ethics and CsR rather than more negative about the MBA qualification teaching as stand-alone components of a mBa. over the past year

<10%

6 www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop Free–to-download book: New Standards for Long-Term Business Survival the word sustain is defined as to keep something in existence for a prolonged period of time (or the capacity to continue into the long term).

In business, this begins with two fundamental principles, both of which contribute to long-term wealth generation, job creation and reduced environmental degradation: first, the elimination and prevention of waste; and second the optimisation of resources (labour, energy, raw materials, commodities and so on).

New Standards for Long-Term Business Survival is a free, 30-page, easy-to-read, introductory booklet that briefly explains what sustainability is, why it is important and how it is being successfully implemented in businesses around the world.

It includes: – a brief history of contemporary sustainability (in a business context) – an overview of the subject areas that sustainable-thinking encompasses – examples of the innovations and financial benefits that derive from sustainable initiatives, – a 10-page checklist designed to help businesses pinpoint their weaknesses in regard to long-term thinking and constant market-force changes.

Over 20 international business and environmental organisations have now joined together to distribute New Standards for Long-Term Business Survival in a bid to help raise business and living standards in communities and industries around the world. among them are: eFmD, Green Cross International, CsR europe, the Globally Responsible Leadership Initiative, the World Wildlife Federation, the Responsible Business Forum, Kozminski university and the Product-Life Institute.

To download a copy please visit: www.efmd.org or email matthew.wood@efmd.org

Global strategy Pankaj Ghemawat, scourge of globalisationistas around the, well, globe, is back with a new book, World 3.0.

Ghemawat, Professor of Global strategy at Iese business school in spain, is probably best known for his debunking of the idea that globalisation is creating a “single market” in which companies can follow globally standardised strategies. (Professor Ghemawat was interviewed in Global Focus Volume 2 Issue 3 October 2008.)

In World 3.0, Ghemawat uses this observation as a springboard to explaining why the potential gains from globalisation are much larger than even pro-globalisers tend to believe. he also addresses a broad range of market failures and fears—such as job losses, environmental degradation, macroeconomic volatility, and trade and capital imbalances —that opponents of globalisation often invoke.

Drawing on a broad range of evidence, Professor Ghemawat shows that increased integration can actually alleviate some of these problems—although targeted regulation may, in some cases, constitute a useful complement. hence the title of the book: World 3.0 involves moving beyond the dichotomies of a protectionist, regulated world (World 1.0) and a globalised, deregulated world (World 2.0) to a vision of a world in which cross-border integration and regulation are both needed and not mutually exclusive possibilities.

In the concluding part of his book, Ghemawat focuses on how a wide range of players—businesses, policy makers, citizens, media—can help open up flows of ideas, people and goods across borders, but in ways that maximise the benefits and minimise the potential side-effects.

World 3.0: Global Prosperity and How to Achieve It was published by Harvard Business Review Press May 2011

7 EFMD Global Focus | Volume 05 | Issue 02 2011

International recognition and cash awards for the best doctoral research

The 2011 Emerald/EFMD Outstanding Doctoral Research Awards Have you completed a PhD in the last three years?

Submit a brief summary of your doctoral research for a chance to win a cash prize sponsored by Emerald Group Publishing Limited and the European Foundation for Management Development (EFMD).

Categories:

Award-winning entries will receive a cash prize of €1,500 (or currency equivalent), a certificate, a winners’ logo to attach to correspondence and the prospect of an offer of publication in the sponsoring journal – either as a full paper or an executive summary – at the discretion of the Editor(s). In addition, a number of Highly Commended Awards will be bestowed.

Human resource management Personnel Review

This year there are 12 categories, listed to the right.

Eligibility To be eligible for the Awards, the research must address an issue that is of importance to one of the various subject areas listed opposite. The Awards are open to those who have completed and satisfied examination requirements for a Doctoral award, or will do so, between 1 October 2008 and 1 October 2011, and have not applied previously for one of these Awards.

Submission requirements Researchers must apply online using the application form at: ww2.emeraldinsight.com/awards/odra.htm

Educational leadership and strategy Journal of Educational Administration Hospitality management International Journal of Contemporary Hospitality Management

Information science Journal of Documentation Interdisciplinary accounting research Accounting, Auditing & Accountability Journal Knowledge management Journal of Knowledge Management Leadership and organisation development Leadership & Organisation Development Journal Logistics and supply chain management International Journal of Physical Distribution & Logistics Management Management and governance Management Decision

Full details of submission requirements and judging criteria can be viewed online at: www.emeraldinsight.com/research/awards/odra.htm

Marketing research European Journal of Marketing

Further information The deadline for applications is 1 October 2011. Winners will be announced in January 2012. Winners will be listed on the web sites of both Emerald (www.emeraldinsight.com) and the EFMD (www.efmd.org).

Operations and production management International Journal of Operations & Production Management

To view this information online, please visit www.emeraldinsight.com/awards

Property Investment and finance Journal of Property Investment & Finance

8 www.efmd.org/globalfocus

9 EFMD Global Focus | Volume 05 | Issue 02 2011

The man who never stopped: Andrzej Kozminski interview by George Bickerstaffe

As a child Andrzej Kozminski hid in the rubble of the Warsaw Uprising and (just) escaped Auschwitz. As a young adult the Communist Party tried to thwart a brilliant academic career. Today, after living through war, persecution, repression and revolution he is about to end his career as founder and head of one of Central and Eastern Europeâ&#x20AC;&#x2122;s foremost business schools. Interview by George Bickerstaffe

the man who never

stopped There are many people across Europe, indeed the world, with stories of courage and resilience in the face of persecution and horror. But few tell them so well or as matter-of-factly as Professor Andrzej Kozminski, the founder and Rector (until he retires from that post next August) of Kozminski University (formerly the Leon Kozminski Academy of Entrepreneurship and Management) in Warsaw in his native Poland. the story of his life has had a profound effect on his major contributions to management development both in Poland and the wider world as both a teacher and scholar. now 70 (he celebrated his birthday in early april this year) he has a huge legacy and has thought deeply about the role of management education, which he talks about in detail on page 11.

But first the story.

Professor Kozminski was born in 1941 in the midst of a one of the most catastrophic period in even Polandâ&#x20AC;&#x2122;s troubled history.

his father Leon (after whom the academy was named) was an eminent professor of economics and entrepreneurship at the Warsaw school of economics, where he spent his entire career. During the war he served in the Polish underground army while also striving to maintain the school of economics as an ongoing but secret underground entity. at the age of three andrzej Kozminski and his family, including grandparents, survived the Warsaw uprising, an attempt by the Polish resistance to liberate Warsaw from nazi occupation before the arrival of the soviet Red army.

It is estimated that about 16,000 Polish resistance fighters and as many as 200,000 civilians were killed. nazi troops systemically razed much of the city before withdrawing as the Red army entered it in January 1945. the Kozminski family survived by hiding in the rubble of the destroyed city but before the end of the uprising they had been captured and placed on a train bound for auschwitz.

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In 1970 Kozminski won a Senior Fulbright Scholarship and was accepted as a visiting scholar at Carnegie Mellon University in Pittsburgh

At Auschwitz, as Professor Kozminski notes dryly, Nazi efficiency (or the lack of it) saved them. After waiting outside for 24 hours the train was refused entry to the camp and the family was able to leave it and join local peasants, with whom they lived for nearly a year before the Red Army overran the area.

After the tragic end of the Warsaw uprising Leon Kozminski was taken prisoner of war and transported to the western front in the Ardennes. He escaped and joined his family near Krakow but when Warsaw became accessible again he almost immediately joined a group of faculty rebuilding and restarting his beloved Warsaw School of Economics in the middle of a desert of ruins. He never joined the Communist-controlled Polish Army.

At that time the Warsaw School of Economics was still a private educational institution, something it had always been. But in 1949 it was nationalised and brought into the hard-line Communist system then established in Poland.

In the 1980s he was also a professor at the School of Law, Economics and Management of the University of Orleans in France As early as 1971 he became involved in the creation of a new Warsaw University School of Management, an experimental and fairly revolutionary attempt to create what was probably the first Western-style business school in a Communist State.

The 1980s were the era of the anti-Soviet Polish trade union movement known as Solidarity, which at first considerably lightened state control over academia and allowed Professor Kozminski to be elected (on a Solidarity “ticket”) as the dean of the new School of Management.

He was re-elected in 1984. However, much of his time was spent resisting political pressure and persecution under the state of martial law imposed by the Communist government in the early and mid 1980s.

Eventually the government was forced into negotiations with Solidarity and by August 1989 a Solidarity-led As he grew up Andrzej Kozminski followed his father’s interest coalition government was formed and in December in economics, management and entrepreneurship, gaining 1990 Solidarity leader Lech Wałesa was elected President postgraduate degrees from both Warsaw University (in sociology) and the Warsaw School of Economics and received of Poland. a PhD by the time he was 24.

By then Communism had virtually collapsed across Central

At that time his position in the Department of Political Economy at the School of Economics came under pressure because he was not a member of the Communist Party. Since he declined to join, he was forced to move to the Department of Management and Organisation.

In 1970 he won a Senior Fulbright Scholarship and was accepted as a visiting scholar at Carnegie Mellon University in Pittsburgh. In Pittsburgh he met the legends of Management and Organization Theory: Herbert Simon, Richard Cyert and other proponents of the behavioural theory of the firm.

and Eastern Europe.

In 1989 Professor Kozminski and colleagues from Warsaw University launched Poland's first MBA programme via their private management development provider International Business School, the forerunner to the Kozminski Academy.

But by the early 1990s he had ambitions to create “something bigger” and left Warsaw University to set up the private School of Entrepreneurship and Management (pictured opposite), which initially could only grant undergraduate degrees but eventually became a fully fledged university with 6,000 students, a quarter of them foreign, and offering a full range of degree programmes including doctoral programmes in Polish and English.

The US Department of State organised for him a tour of the most prominent American business schools such as Harvard, MIT, Berkeley, Stanford and UCLA. In the following years he returned several times to America as visiting professor in several American universities. His last appointments were The School, which became an Academy and now a University, was set up in 1993, the same year that Leon at Anderson Graduate School of Management at UCLA where he taught a semester a year between 1990 and 1997. Kozminski died. Sadly, he did not see the School open.

The man who never stopped: Andrzej Kozminski interview by George Bickerstaffe

11 EFMD Global Focus | Volume 05 | Issue 02 2011

What do you think of the current state of management education generally? Is it, as some say, in crisis?

For the moment I do not think there is a crisis. Most schools are doing relatively well. Applicants for MBA and other masters degrees are quite high.

But in the future I think that in management the leading role will be taken by leaders and entrepreneurs and that managers as such will be reduced to just an executive role. I think the challenge for business schools in the future will be how to train entrepreneurs and leaders, people who are capable of understanding the complexity of social structures. That’s why I strongly believe in this broader profile of a business school that includes teaching the humanities and even art.

A few years ago I co-wrote a book called The Three Faces of Leadership: Manager, Artist, Priest (Wiley-Blackwell 2004) that was later translated into Chinese. The Chinese are very interested in training their leaders along these lines.

That’s why at Kozminski we offer a relatively large range of degrees, including management, finance, economics, public administration and business law. They are all business related but our concept of a business school is that it should have a broad profile and also include sociology, psychology and political science. I don’t believe that business people should be trained as narrow technocrats. They should have broad horizons.

This is an approach and way of thinking I have heard in many business schools in Central and Eastern Europe. Do you think that schools from the region have a particular contribution to make in this area?

In my opinion yes. We went through a very difficult and turbulent process of transition and as a result we probably have more sensitivity to social, human and political complexity compared to business schools that had been operating for decades in well-ordered and predictable markets. So I think that some schools in Central and Eastern Europe can make a unique contribution.

How do you see management education developing in the next decade of so? Do you think it will change very much?

First, I think that in terms of numbers of providers it is likely to grow exponentially. Last year the Global Foundation for Management Development came up with the number of 12,000 “legitimate”, government-licensed business schools in the world.

Most of them are located in Asia and BRIC countries, places where they were not present until very recently. So I think the numbers of schools located in these new emerging economies will grow.

And these schools will certainly have their own “flavour” of management education.

They will try to imitate the leading American and European schools but you know very well that though the American model was transplanted to Europe in the early 1960s European management education is today clearly different to that in America.

12 www.efmd.org/globalfocus

I am absolutely certain that Asian, Brazilian, Chinese and Russian business schools will develop distinctly different models because of the fact that the cost of management training in the most advanced countries is astronomical So I think a new phase of differentiation is coming. I am absolutely certain that Asian, Brazilian, Chinese and Russian business schools will develop distinctly different models. This will also happen because of the fact that the cost of management training in the most advanced countries is astronomical. And most of the schools that are located in other, less affluent, places simply cannot afford it.

So they will have to do something about it and provide a cheaper, more flexible and more pragmatic type of management education. In the next few decades we will witness the full emergence of these new models that are just now starting to appear.

What has been the greatest influence on your life?

I would say first of all I was influenced by the Polish tradition of economic and management education that started between the wars, which was represented by my father, who died in 1993, the same year we opened the school. He didnâ&#x20AC;&#x2122;t see the school open but he was the inspiration behind it.

Second, I was very strongly influenced by my years in America and in American business schools and by some of the academic ideas that were around in America at that time, for example the behavioural theory of the firm and the bounded rationality idea of Herbert Simon, who I worked with at Carnegie Mellon for a time. I was organising my own research for some time along these lines.

And third I was, of course, strongly influenced by the transition process, by the process of liberation that took place in Central and Eastern Europe after 1989 and which I would say has produced some very impressive results.

These are the three factors that have really influenced me.

What has been your greatest achievement so far? Has it been the creation of Kozminski University Yes I would say so. But I am also proud of some success I have had in research. I have published 36 books. But I suppose the school is the greatest achievement and I hope it will continue to grow and develop, especially internationally. That is my hope and ambition for it.

Will you still be involved in it in the future?

Well, I am stepping down as Rector of the school at the end of August but from September I will join the Board of Trustees of the school as President and Chairman. It is a bit like a Supervisory Board. I have served on a number of those and I firmly believe that a Supervisory Board can contribute strongly to the success of a company. So I will be able to continue to contribute to the success of the school in a supervisory capacity.

I do mean to concentrate on the supervisory role but I also intend to continue my research and to continue teaching. I never stop!

13 EFMD Global Focus | Volume 05 | Issue 02 2011

Congratulations to the winners of the 2010 EFMD Case Writing Competition Corporate Social Responsibility

Entrepreneurship

Family Business

Finance and Banking

Sponsored by:

Sponsored by:

Sponsored by:

Sponsored by:

Agility: A Global Logistics Company and Local Humanitarian Partner INSEAD Luk Van Wassenhove, Margaret Hanson, Rolando Tomasini

JME Soundboard: Crossing The Mercks of Darmstadt The Sound Barrier Series

Hyflux Ltd: Progressive Project Financing

IMD Benoit Leleux, Laure Le Hardy De Beaulieu

IMD Benoit Leleux, Anne-Catrin Glemser

INSEAD Pierre Hillion, Jean Wee

Supply Chain Management

African Business Cases

Inclusive Business Models

Emerging Chinese Global Competitors

Sponsored by:

Sponsored by:

Sponsored by:

Sponsored by:

The Yogyakarta Earthquake: IFRC’s Experiences with the Regionalized Supply Chain INSEAD Aurélie Charles, Luk Van Wassenhove, Aline Gatignon

M-PESA (Kenya)

Euro- Mediterranean Managerial Practices and Issues

Public Sector Innovations

Responsible Leadership

Sponsored by:

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Management Principles and the Washington, DC Public Schools (A): Choosing a Chancellor Management Principles and the Washington, DC Public Schools (B): Race to the Top MIT Sloan School of Management Leigh Hafrey Cate Reavis

Veragua Rainforest: Bio Innovation & Responsible Leadership INCAE Business School Andrey M. Elizondo Solano, Juan Carlos Barahona + Corruption at Siemens (A) & (B) IMD Anna Eckardt Stewart Hamilton

Fabio Rosa “Bridging the Shanghai Automotive and Electricity Divide in Brazil” Ssangyong Motor: A Tale of Two Dragons (A)(B)(C) ENPC School of International IBS Center for Management CEIBS/Tsingua University Management Research Leiping Xu, Stephanie Ludwig, Vivek Gupta Steven White Tawfik Jelassi Harish Aytha

Sponsored by:

Novartis, Commercial strategy for success IE Business School Claire Bastien Teresa Serra

The 2011 EFMD Case Writing Competition is now open.

Please visit us at: www.efmd.org/case

14 www.efmd.org/globalfocus

After ten years of the UN Global Compact Georg Kell and Jonas Haertle reflect on past successes and look forward to the future, including the role of management education

UN Global Compact and Principles for Responsible Management Education: the next decades

UN Global Compact and Principles for Responsible Management Education: the next decades by Georg Kell and Jonas Haertle

Last year marked the tenth anniversary of the United Nations Global Compact.

As we embark on the initiative’s next decade, we have reached a critical juncture in the history of the global economy.

In some ways, the current atmosphere is unnervingly similar to that of a decade ago: national barriers are rising in the aftermath of painful financial adjustments; public discontent over corporate mismanagement and investor greed is widespread; and there is a pervasive mood of uncertainty over the course of globalisation.

As a result, efforts to reach global climate and trade agreements, to eliminate poverty and hunger, and to safeguard against systemic market failures have yet to come to fruition.

Yet, over the past ten years fundamental shifts have occurred, and we are convinced that corporate responsibility – defined as a company’s delivery of long-term value in financial, social, environmental and ethical terms – can address some of the current challenges.

And as corporate responsibility moves to the mainstream, the implications for management education are significant.

Let us look at corporate responsibility first. This is a dynamic field and many trends have shaped the agenda over recent years. Throughout the past ten years, the Global Compact has witnessed a number of critical developments:

Corporate responsibility has gone global » Beginning with only 44 companies at its launch in 2000, the Global Compact has today become the world’s largest corporate responsibility initiative with over 6,000 business participants and non-business stakeholders from over 130 countries. » Participating companies represent nearly every industry and sector and are based in developed, emerging and developing economies. Emerging economies, especially China, Brazil and India have entered the corporate responsibility universe and started to build localised knowledge and best practices.

From morality to materiality » While working for the common good remains integral to the corporate responsibility agenda, it is no longer the only selling point. Today, corporate responsibility has turned into a strategic and operational concern of companies, whether small suppliers or large transnationals. Corporations join the Global Compact to better recognise and mitigate risks and to seize opportunities. » The two most recent Global Compact Implementation Surveys further show that many have begun integrating corporate responsibility issues into their corporate strategies while driving implementation through their value chains.

15 EFMD Global Focus | Volume 05 | Issue 02 2011

The link between financial markets and corporate responsibility is growing stronger » Until a few years ago there was no framework to mobilise investors around environmental, social and governance (ESG) issues. Yet the recent global financial crisis has reinforced the need for long-term, sustainable investment strategies over short-term considerations. » Today, through the Principles for Responsible Investment (PRI), more than 800 institutional investors representing roughly $20 trillion in assets are placing ESG considerations at the centre of their investment analysis and decision making. Collectively, they are leveraging their influence to encourage improvements in corporate sustainability performance. » Improved governance of financial markets cannot only rest on voluntary initiatives such as the PRI. It must be backed by legislation. But there is no doubt that the recognition of ESG issues by the investment community has acted as a strong driver for the corporate responsibility agenda.

The environmental and corporate responsibility agendas are conflating While a few years ago social issues largely dominated the corporate responsibility field, environmental issues are increasingly recognised as being an integral part of corporate responsibility.

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370 PRME, launched in 2007 is now endorsed by over 370 institutions from over 60 countries In sum, what began as a peripheral movement around business ethics has evolved into mainstream corporate practice around the world. today, there is growing recognition that embedding human rights, labour standards, environmental stewardship and anti-corruption measures into strategy and operations is good for business and society.

Consequently, management education has to adapt to this new reality. the Principles for Responsible management education (PRme), launched in 2007 and now endorsed by over 370 business schools and management-related academic institutions from over 60 countries, serve as guidelines for management education providers to enhance curricula, pedagogy, research and incentives to prepare organisational leaders who will balance economic with societal goals.

PRme participants are challenged continuously to improve their efforts to incorporate sustainability and corporate responsibility issues in curricula and research. as a network of networks, PRme relies on the actions of its partner organisations such as eFmD, aaCsB International, amBa, Ceeman, CLaDea, aspen Institute’s Business and society Program, the Globally Responsible Leadership Initiative, eaBIs as well as student organisations such as net Impact and oikos International. thankfully, an increasing number of examples and good practices in business schools and other organisations around the world provide not only hope but also concrete evidence that the envisioned transformation of management education is happening. the following are examples of PRme signatories’ work on the six Principles: *

Principles 1 (Purpose) & 2 (Values) » Over the past four years, PRme signatories have undertaken a variety of efforts to embed the values of sustainability and corporate responsibility in their curricula and academic activities. some have included corporate responsibility topics more thoroughly in existing courses (undergraduate, graduate and PhD) while a few signatories have created completely new programmes based on these values. » also, a number of signatories have initiated specific activities to make their participation in PRme as well as the un Global Compact or the un millennium Goals visible to students and faculty.

Principles 3 (Method) & 4 (Research) » PRme signatories report using a variety of teaching methods, which in many cases involve experiential learning approaches such as service learning, field research projects, local and global competitions, business simulations and outdoor experiences to stimulate their students’ understanding of their role in society.

Principle 5 (Partnership) and 6 (Dialogue) » among the diverse partnership initiatives developed by PRme signatories, the following are most promising: appointment of industry professionals with expertise in sustainability to university governance bodies; partnerships with corporate responsibility related centres and networks; and collaborations with company departments dealing with corporate responsibility. » Beyond that, PRme signatories have engaged in many activities to foster dialogue with multiple stakeholders. they have also closely collaborated with governments, regional networks, associations, trade unions, nGOs and media organisations.

In sum, while we see many positive developments and innovations, we have to recognise that corporate responsibility has not yet become mainstream in management education around the world.

Further integration and adaptation – especially in light of next year’s Rio+20 un Conference on sustainable » PRme signatories have been involved Development where PRme will convene its third Global Forum on Responsible in diverse initiatives to support, encourage or initiate research on topics management education – is called for. related to responsible management. these have involved faculty and student efforts such as realigning current research centres, or even creating new ones, with research on PRme topics; creating multidisciplinary *The authors would like to thank Jose Manuel research teams to understand Alcaraz and Magdalena W Marcinkowska of the PRME SIP Working Group for providing the pressing issues (such as the findings in this section, which are based on the relationship between business and Sharing Information on Progress (SIPs) reports climate change); participating in

by PRME signatories. national and international research networks; competing for grants with ABOUT THE AUTHORS proposals on PRme-related issues; Georg Kell is Executive Director, UN Global Compact. involving students in field research; and offering regular faculty research Jonas Haertle is Head, PRME Secretariat. seminars.

17 EFMD Global Focus | Volume 05 | Issue 02 2011

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A quest for legitimacy: how managers can shape the future Continuing to focus only on shareholder value and short-term financial results will not be adequate to tackle the huge challenges of the future. Neither will quixotic fights against the momentum of governance systems nor romantic dogooder approaches. What we need, says Richard Straub, is for managers to build on the fundamental strengths of capitalism with its unmatched ability to generate wealth while infusing it with a new sense of ensuring performance and progress for all of society â&#x20AC;&#x201C; creating value while maintaining our values

A quest for legitimacy: how managers can shape the future by Richard Straub

19 EFMD Global Focus | Volume 05 | Issue 02 2011

Although corporations create much of the value in todayâ&#x20AC;&#x2122;s world, public trust in business and management is abysmally low. Only about 50% of the wider public in the Western world puts faith in the ability of business to do the right things, according to the 2011 Edelman Trust Barometer.

(Governments are faring even worse in the realm of public opinion, with trust scores hovering around 40% in the West.) many consider executives to be narrowly focused on the bottom line, with little genuine concern for society. and although corporate social responsibility programmes have proliferated, they have failed to redeem managementâ&#x20AC;&#x2122;s legitimacy. Indeed, many see CsR initiatives as mere PR and marketing ploys, which have little impact on the way a companyâ&#x20AC;&#x2122;s core business is conducted.

Internally, things are not a whole lot better. according to the Corporate Leadership Council, by the end of the first quarter of 2011 more than 20% of employees where highly disengaged and only 39% put a high degree of effort into their jobs.

It is tempting, of course, to blame the recent financial crisis and its reverberations in the real economy for stirring such strong negative feelings. to be sure, the recession did little to burnish the image of business.

But these trends are hardly new, suggesting that there are some more fundamental, underlying issues to be resolved.

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Disenchanted with investor capitalism Peter Drucker, for one, expressed his deep concern about the direction that capitalism began taking in the 1980s and 1990s with its increasingly narrow focus on “shareholder value”. In particular, Drucker worried that financial engineering and short-term profit maximisation had led business executives to believe that employees were a variable expense (called “human Resources”) that could be cut ruthlessly in order to meet financial targets. some 30 years after Drucker (pictured overleaf) first sounded this alarm, things seem to have only become worse. today, more and more corporate leaders are driven by “the tyranny of short-termism”, as Dominic Barton terms it in the march 2011 issue of Harvard Business Review.

By devoting a disproportionate amount of energy and resources to managing quarterly earnings results “by the cent”, executives have reduced their capacity for long-term value creation. no one is arguing that the pressure exerted by financial markets on management is not real. But it is also undeniable that these myopic corporate practices have had devastating effects, undermining trust inside and outside the organisation.

The future challenge is here today While these developments have been building up for decades, the recent crisis has propelled them into the public spotlight.

It is therefore not surprising that a discussion about the future of capitalism and the legitimacy of management in society is now taking centre stage.

For all its shortcomings, capitalism is still widely considered the most effective economic system ever devised. Driven by entrepreneurial spirit and managerial action it has proven its ability to generate prosperity and wealth. Powered by successive technology cycles that have spawned waves of innovation, managerial capitalism has improved the lives of hundreds of millions of people. though the term “globalisation” tends to rankle some activists, who paint pictures of exploitation and a race to the bottom, many across the world have seen their fortunes significantly improved. and yet globalisation enabled by technological advances has also brought new challenges. It has made the world more complex, interdependent and hence more vulnerable and unpredictable. shocks can easily spread from continent to continent, as the financial crisis made plain.

What’s more, things promise to get only more difficult from here. a rapidly rising world population, moving towards nine billion by the middle of the century, portends huge demographic and economic shifts between the developed world and emerging countries. It will put the highest strains on all sorts of resources in the quest to cover human needs across the planet. they range from food, water, energy, health and housing to higher-order needs such as education, jobs and social status.

Governments, civil society and businesses will all have to take on their share of responsibility to come up with new solutions. these will require a political, social and economic system of the highest performance and effectiveness. Just witness the popular uprising in the middle east and northern africa to measure the magnitude of the task.

Can a revitalised managerial capitalism meet its part of this challenge? Can it mobilise the knowledge, creativity and innovation that are needed today and will be needed in the decades to come? Can our highly specialised, single-purpose institutions serve the common good without losing their economic clout and efficiency? Can it contribute to attenuate the clash of cultures by accelerating economic development around the world?

A quest for legitimacy: how managers can shape the future by Richard Straub

21 EFMD Global Focus | Volume 05 | Issue 02 2011

The three key responsibilities Drucker concluded that the survival of society depends on “the performance, the competence, the earnestness and the values of their managers”.

PETER DRUCKER

The most important contribution management needs to make in the 21st century is similarly to increase the productivity of knowledge work and the knowledge worker

this implies a huge responsibility for what managers actually do – be it in achieving the economic purpose of their business (which is the foundation for every other responsibility), Making work and people productive be it in making work and people productive, nevertheless, are we really getting anywhere or in managing social impact and social close to tapping the human potential in today’s responsibilities. organisations? are managers actually the good news is that since Drucker wrote succeeding in making people productive his 1954 landmark book The Practice of and in bringing their strengths to bear?

Management we have seen a host of new all indications are that the human element tools and concepts designed to make has been grossly underutilised in recent managers more effective. decades as corporations have implemented Julian Birkinshaw (below) and michael mol in analytical frameworks and conceptual tools. their book Giant Steps in Management have as we have seen all too often, as concepts identified some 50 innovations in the field. among them: Lean manufacturing, Balanced such as management by Objectives and “corporate re-engineering” are grossly scorecard, activity Based Costing, strategic misapplied, management innovations can Business units, matrix Organisation, Brand quickly degenerate into weapons of mass management, Outsourcing, Performancedestruction for human initiative, motivation Related Pay, Open Innovation, Operations and creativity if they are not accompanied by Research, Customer segmentation and strong consideration for what really lies at enterprise Resource Planning. the heart of any organisation: its people. significant progress has been achieved in applying these instruments to drive economic It is high time for management, across all our organisations, to create the conditions performance and efficiency. for unleashing the power of human knowledge and ingenuity.

With his bird’s-eye view, Drucker defined this as the key challenge for our current generation of managers. “the most important, and indeed the truly unique, contribution of management in the 20th century was the fiftyfold increase in the productivity of the manual worker in manufacturing,” Drucker declared. “the most important contribution management needs to make in the 21st century is similarly to increase the productivity of knowledge work and the knowledge worker.” to achieve this task within organisations managers have to act as treasurers of human capital and exercise stewardship for the development and effective deployment of people.

Once all the great management tools and techniques that have been developed during the past few decades are infused by a deeper understanding of the human factor, the results could be spectacular, far beyond today’s greatest economic achievements.

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Responsibility towards society This much-needed refocus on people and their capabilities is closely tied to the third element that Drucker identified as a fundamental obligation for management: the responsibility of business and other institutions towards society. Companies, after all, do not operate in a vacuum; they are part of society and operate within society.

In the January-February 2011 issue of Harvard Business Review, Michael Porter and Mark Kramer promote the concept of “Shared Value” as a way to “reconnect company success with social progress”.

The essence of their idea is for corporations to take on social problems but in a competitive context; to look for ways to contribute to the larger community while tackling core business objectives.

C K PRAHALAD

Business, as the most powerful force in society, must be the instrument of social justice – disparities in society are a call to action and an opportunity for innovation

While similar notions have been brought forward over the years by various authors, this may be the perfect moment for this approach to reach full flower.

Jed Emerson’s work on Blended Value; the Public Value initiative developed by the Institute for Values in Society at the University of St Gallen, under the leadership of Peter Gomez; and the case studies in Rosabeth Moss Kanter’s book SuperCorp, which show how companies can do well and do good at the same time, all indicate that momentum is building.

However, why should companies care? Why put funding in new risky innovation projects as opposed to staying on a path of more predictable incremental innovation and giving back more of their cash to their shareholders?

The bottom of the pyramid Struck by the huge disparities in income between different countries, the late C K Prahalad (pictured, previous page) developed a powerful framework for business to take a leading role in integrating the four billion poor people around the world into the global economy and to bring the benefits of capitalism to those who have not typically been viewed as viable consumers for most multinationals.

This approach requires rethinking traditional business plans and strategies and creating new business models to address the big issues of our planet and its rising population.

This touches the fundamental question of what it means to be “in society”.

At the 2009 Peter Drucker Centennial Forum in Vienna, Professor Prahalad issued a challenge to corporate leaders.

A situation in which corporations thrive while the societies in which they operate experience high and persistent unemployment, most painfully for the younger generation, and other acute social and environmental problems, will not be sustainable in the long run. This would gradually undermine the very foundation on which business operates.

It goes to straight to the heart of the value system of contemporary businesses.

“Business, as the most powerful force in society, must be the instrument of social justice,” he asserted.

In his book The Hungry Spirit Charles Handy speaks about “Proper Selfishness”, which means accepting a responsibility for making the most of oneself by, ultimately, finding a purpose beyond and bigger than oneself. Could such an orientation lead to what Handy has dubbed “a better capitalism”?

More importantly, he argued that the disparities in society are a call to action and an opportunity for innovation.

Delivering goods and services profitably to the Bottom of the Pyramid (BOP) also demands that other important societal issues, especially sustainability and governance, be addressed in the process.

The BOP framework outlines a means for the scale, expertise and technology that resides within large firms to be applied toward improving the lives of the poor through for-profit innovations.

This is not charity. Many of those who have engaged with these markets have found that doing so can rejuvenate and strengthen the innovative capabilities within their firms.

Further, developing new business models has helped to improve their competitiveness in developed markets as well. Management innovation developed in the BOP can also create sustainable competitive advantage. The degree to which business can collaborate with NGOs, governments and the poor themselves will play an important role not only in the ability of companies to innovate on a global basis, but also to build trust and legitimacy.

A quest for legitimacy: how managers can shape the future by Richard Straub

23 EFMD Global Focus | Volume 05 | Issue 02 2011

A perfect storm sweeping away old-style shareholder capitalism? the dominance of shareholder primacy has weakened the role of managers inside and outside companies. In the meantime, the intensifying discussion about new ways of simultaneously creating economic value while contributing to the common good coincides with the entering of a new generation into the workplace for which purpose and societal impact are essential. to be just a “hired hand” as opposed to having “higher aims”, as harvard’s Rakesh Khurana has put it, seems to be a path that many young people frown upon. and with a talent shortage looming, companies will surely have occasion to rethink how to attract the most talented people.

Business leaders will also have to understand better the strengths of alternative economic models that could complement pure capitalism such as co-operatives, partner models, social enterprises and public-private partnerships.

Conversely, non-business organisations such as hospitals, government agencies, nGOs and education institutions that have a much stronger sense of their greater mission in society fall terribly short in applying proper management processes and tools to achieve their purpose in an effective way. there should be much more mutual learning across the various models of value creation.

In short, there may now be a window of opportunity for management to reclaim its legitimacy. With a more clearly defined and better-understood professional status, its voice might be heard again. still, there is a long way to go from simply talking about this big idea to actually realising a wholesale change in capitalism and the role of management within it. It is a thorny and tortuous route, with no shortcuts in sight. the new model must prove to be as robust and self-sustaining as the current narrow shareholder-value approach while eliminating its destructive tendencies.

2011 Peter Drucker Forum The theme “A Quest for Legitimacy: How Managers Can Shape the Future” will also be the title of the 2011 Peter Drucker Forum to be held in Vienna on November 3 and 4, 2011 http://www.druckersociety.at/index.php

as part of this makeover, management education and research will have to be fundamentally re-thought in close partnership between business schools and practitioners.

Practical relevance must prevail over ivory-tower theory. as srikant Datar, David Garvin and Patrick Cullen express so clearly in Rethinking the MBA, we must get beyond the tired tools and frameworks and start paying more attention to the practise of management (that is, the “doing”) as well as to the values, attitudes and beliefs that form managers’ worldview (that is, the “being”).

Change is in the air. It may well prove a defining moment in modern business history that management should not miss.

ABOUT THE AUTHOR

Richard Straub is director of EFMD Corporate Services and EU Affairs and President of the Peter Drucker Society Europe

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A sustainable model for business schools?

Kai Peters and Howard Thomas argue that the current business model of business schools is financially unstable and probably unsustainable

At the core of each business school, a dialectic takes place between two distinct purposes – the goal of producing knowledge and the goal of educating students. Individual institutions have different views.

At one end of the spectrum there are research-intensive institutions while at the other there are teaching-led or even research-less schools. Most schools are somewhere in between, leaving them with a dual system of purposes and corresponding metrics that are all too often contradictory and confusing rather than cohesive.

The choices that individual institutions have made broadly share one common element. They are, the authors believe, financially unstable and probably unsustainable. This article therefore seeks to explore the financial drivers of business schools on both the income and expenditure sides of the equation and highlight areas of distinct concern for business school finances.

Where does the money come from?

£1k

£9k

In 1998 annual UK undergraduate fees of £1,000 were introduced...

... this will risein 2012, in the majority of institutions, to £9,000

A sustainable model for business schools? by Kai Peters and Howard Thomas

The state Not all schools are dependent on government funding but many more are than are willing to admit. State funding means that schools are directly funded to educate students and additionally to produce research. Education is seen as a public good that produces an educated workforce, which in turn generates returns to the nation through higher productivity and taxes. Research generates innovation that also creates long-term public benefit.

While this traditional mode of funding is still strongly represented in continental Europe, it is increasingly being questioned on philosophical and financial grounds.

In many nations, and especially in Asia and Latin America, education is viewed as largely a private rather than a public benefit and funding is being adjusted accordingly.

Whatever the merits of this debate, it is clear that it serves the purpose of governments to reduce education funding since they are facing intense competition for societal financial resources. Consequently, direct grants for education are being reduced and students are increasingly responsible for funding their own education.

Direct grants have thus become indirect grants via loans to students. In Britain this process has been underway for some time.

While education was free for the user until 1997, fees have been increasing ever since.

In 1998 annual undergraduate fees of £1,000 were introduced. This increased to £3,000 in 2004 and will almost certainly rise to £9,000 at a majority of institutions in 2012.

At the same time as student debt increases, direct grants to universities for business education of approximately £3,500 per student will be removed in 2012. Graduates will be required to repay their loans over a lengthy period once they reach an annual income above £21,000.

25 EFMD Global Focus | Volume 05 | Issue 02 2011

The government is assuming that twothirds of students will repay their loans.

The university sector as a whole is expecting only one-third to repay. The truth will eventually become clear but perhaps not for as long as 30 years. Ironically, if eventual total repayments are less than 50% of the loans given out, the new system will be more expensive than the one it replaces.

Reliance on government is also the key driver where one would least expect to find it: in the American for-profit educational sector. The vast majority of students use federal loans to pay for their programmes.

For-profits are actually the largest users of federal funding. Without this funding, which is presently being challenged in Congress because of poor completion rates of between 10% and 15% of students in some cases, the business model of the for-profits will certainly be less attractive in the future.

Underlying these Anglo-American examples is the question of what proportion of a society ought to attend university. There are two different models for modern universities.

The Anglo-American model seeks broad participation. Approximately 50% of all secondary school graduates continue on to university. In the Humboldt university model, which is common in continental Europe, universities aim for a narrower intellectual elite in the range of 20% of high school graduates. In countries using the Humboldt model financing universities is less onerous.

In middle-income and developing countries, university attendance rates are more aligned with the Humboldt model, averaging, according to UNESCO, a UN agency, around 20%. The role of government funding is also more modest than in the west. Public funding accounts for 54% of university budgets whereas in OECD countries, approximately 76% of university funding originates from governments.

26 www.efmd.org/globalfocus

Student tuition If the government is unwilling to pay, then the burden falls on the user of services. Undergraduate tuition fees are now beginning to rise steadily in many countries. Postgraduate fees, on the other hand, have for some time been largely free from constraints in terms of programme pricing and are seen as a key source of funding for many institutions.

Other sources of funding Once government funding has decreased, business schools turn to two more sources of funding: executive education and fund raising. Both can be tremendously lucrative but are not necessarily easy to establish nor guaranteed to be successful. Executive education requires a different infrastructure and faculty composition than that of degree programmes.

The demand for postgraduate business education has increased dramatically over the last 20 years. Because of the imbalance between demand and supply, fees have increased rapidly. The cost of MBA tuition in Western Europe in the 1990s rarely surpassed 110,000; two decades later fees of 160,000 for full-time programmes are common, with some EMBAs now having price tags of over 1100,000.

Even when established, executive education is very volatile as illustrated by the impact of the current recession.

Revenues reduced significantly within a matter of months. Unicon, a consortium of schools involved in executive education, reported that on average, revenues generated by executive education shrank by 30% in 2009 compared to 2008.

Tuition fees in America have reached extremely high levels. Presently, over 100 institutions charge over $50,000 a year for fees, room and board. On this basis and extrapolating from present trends, fees for four-year undergraduate degree programmes in America are likely to reach $330,000 by 2020. The top 20 MBA programmes in the US all ask tuition fees of around $100,000 while EMBA programmes cost up to $172,200.

Although historically students may have thought that the return on investment was not unreasonable, the increasing costs of tuition and living expenses combined with potential loss of income during the course may well lead to numerous candidates concluding that a tipping point will soon be reached where the costs outweigh the benefits.

Fundraising is the other potentially large source of external funding and proud and satisfied alumni and friends of schools can be very generous. Certainly the endowments of the world’s top ten universities are measured in billions rather than millions of euros.

However, expectations about amounts likely be generated by endowments have had to be amended recently as funds have shrunk in real terms as have returns. Furthermore, the number of universities where fundraising makes a substantial impact on operating budgets is actually very small.

€100k The cost of MBA tuition in Western Europe in the 1990s rarely surpassed €10,000; two decades later fees of €60,000 for full-time programmes are common, with some EMBAs now having price tags of over €100,000

Where does the money go?

Academics – Research In recent debates about higher education, one subject that has received only limited attention must surely be the model through which business schools and universities manage their main asset: their faculty.

In most academic institutions, overall staffing costs, including faculty, can easily approach 75% of institutional expenditures. These faculty members have priorities – teaching and research – that are often in conflict. In researchintensive universities as well as in many research-focused business schools, faculty members’ career paths are dependent on their research productivity measured in the quality of research journals and the number of high-quality publications. Metrics are clear and are, unsurprisingly, output measures.

Input measures do not exist on the research front. How long does it take to write a paper? For some, a lifetime.

For others, a weekend. Some individuals are able to develop collaborative infrastructures that include colleagues, graduate students and research assistants and as a result are able to generate many papers a year.

The point here is a simple one: how much time should be devoted to research in contrast to other activities?

How much and what types of research output should be expected? Ultimately, can more time be freed up for other purposes such as teaching, managing or working with executives?

In some cases, research is directly funded or financed by research grants from foundations or directly from governments. But in most cases, research is cross-subsidised from teaching income. That is, premiumpriced programmes such EMBAs become the “cash cows” for the funding of the school.

A sustainable model for business schools? by Kai Peters and Howard Thomas

Academics â&#x20AC;&#x201C; Teaching The economics of teaching time is fascinating. The core question, surely, is what does an hour of teaching time cost, and what does an hour of teaching time generate as revenue? These core calculations can then be scaled up to an annual calculation and be compared across the higher educational landscape and with related, knowledge-intensive businesses.

At a base level, there are three research models in higher education. The first, a research-only model, will by necessity be left aside except as a cost to the institution that must be borne somehow.

The second is a teaching-intensive model. In many of the newer universities in Britain and elsewhere, there is an anchor at about 300 teaching hours a year. Assuming a base faculty salary of 150,000 with typical on-costs for pensions, support staff and so on, one can model a fully loaded cost of something in the region of 180,000 per faculty member. The teaching cost is thus about 1270/hour.

At the research-intensive end of the spectrum, fully loaded salaries can be double. The main factor, however, is the reduced teaching load. At 120 teaching hours a year, the hourly teaching cost is about 11,350 though there are schools where average fully loaded salaries approach 1250,000 with similarly low teaching loads. This leads to an hourly teaching cost of 12,200. No doubt someone somewhere is even more expensive on an hourly basis.

In comparison, secondary school teachers in middle income and developing economies cost, on average, 18/hour and in the OECD 134/hour.

Consulting firms have a similarly bullish approach to costs per hour. Given that consultants can easily have a target of generating 200 billable days, one will be looking at an hourly cost of something in the region of 145 for a mid-level consultant.

Given the economic infrastructure in place in higher education, there are two ways in which teaching costs can be managed.

The first is what seems to be the trend.

Simply teach less. At undergraduate levels, contact time can appear rather thin with suggestions that six to ten contact hours per week for 30 weeks a year is not unusual. A second lever is simply to increase the number of students in the classroom to drive costs per students down.

Perhaps there is another option which needs to be considered. Is it realistic for universities to continue to operate with only their present range of models and levers or is it ultimately necessary to consider the unthinkable â&#x20AC;&#x201C; increasing teaching loads across the sector?

Other While overall staff proportions are actually quite stable across the higher education landscape, the proportion of academic to non-academic staff varies widely. Factors that have an impact include the product portfolio, the business school model, and in many cases the overall wealth and ambition of the institution. Marketing, for instance, will typically consume 8% to 12% of the MBA income stream.

Is it realistic for universities to continue to operate with only their present range of models and levers or is it ultimately necessary to consider increasing teaching loads across the sector?

27 EFMD Global Focus | Volume 05 | Issue 02 2011

Adding it all up While not all business schools will face financial challenges in the near term, fault lines are clearly visible. Traditional sources of income are less stable.

Government, the primary source of funding in the OECD countries, will not continue to expand educational budgets for ever. Examples to the contrary are already evident in many countries.

Student tuitions cannot go on rising forever. Many MBA programme fees, we believe, have reached levels that are not sustainable and raise a real question of value and fairness. Income from executive education or from donations can be substantial but is not in the reach of all schools.

On the cost side, we posit that many institutions are using a faculty model that is very luxurious. No other industries that we can think of use their main human capital to directly generate income for less than 10% of their annual time at one end of the spectrum or only about 30% at the other.

There are plenty of other challenges in the global market for education.

These include the role of for-profits, the welcomed growth of middle income and developing world countriesâ&#x20AC;&#x2122; own educational infrastructure, the advent of recessions and cost pressures in the competitive environment.

The consequent strategic options, including part-time and on-line education, should encourage Deans and Directors of business schools to reflect genuinely on the long-term financial viability of their business models and focus on refreshing such models in the future.

About the AuthorS

Kai Peters is Chief Executive, Ashridge Business School.

Howard Thomas is the Dean of Lee Kong Chian School of Business, Singapore Management University.

28 www.efmd.org/globalfocus

Teaching students innovation and entrepreneurship is never easy. Thomas Hedner advocates a pragmatic and practical approach and offers some how-to suggestions based on a successful programme at Swedenâ&#x20AC;&#x2122;s University of Gothenburg

How to implement an innovation and entrepreneurship curriculum What makes a successful entrepreneur has been the focus of discussion over the past century. In his 1930s book The Theory of Economic Development Joseph Schumpeter stated that the successful entrepreneur should be innovative, creative and risk prone.

In support of that, others have argued that entrepreneurial traits include risk adoption, creativity, exploitation of market niches, growth orientation and a desire to maximise profits for themselves and investors.

Entrepreneurs are also commonly ascribed additional characteristics such as a passion for business, ability to cope with obstacles, perseverance, determination and motivation, ability to adopt risks and changes, tolerance to uncertainties, understanding of processes and time frames, as well as a visionary understanding of the larger picture. Such traits are also often associated with social skills and character.

In respect to the academic teaching of entrepreneurship, it is often difficult to find these types of objectives in the theoretical teaching curricula since they typically need to be explained and sometimes learned by tacit rather than theoretical approaches.

Interestingly, successful university and business school entrepreneurship curricula often emphasise the tacit and narrative pedagogical perspectives rather than the theoretical ones. It is therefore important to point out the importance of tacit learning and real venture creation, which should be strategically integrated into the academic curriculum.

With that perspective, innovation and entrepreneurship curricula at the university level has to adopt a clear venture creation focus.

How to implement an innovation and entrepreneurship curriculum by Thomas Hedner

29 EFMD Global Focus | Volume 05 | Issue 02 2011

You need to focus more on the tacit and narrative aspects than on the theoretical when you implement your academic curriculum in innovation and entrepreneurship

How do you make the programme work? â&#x20AC;&#x201C; You have to focus on venture creation and integrate the disciplines cross-border

Formal theoretical or explicit knowledge is knowledge that can be easily codified, systematised, formalised and communicated to others orally or in writing.

At the University of GĂśthenborg in Sweden we have adopted an organisational approach where academics and entrepreneurs from the medical, engineering and business schools have worked jointly together to develop masters education and academic curricula in innovation and entrepreneurship at a university level.

In contrast, informal or tacit knowledge is personal, contextspecific knowledge that cannot readily be transferred to other individuals by verbal or written means.

According to the pragmatic educational philosophy and perspective, entrepreneurship education should be praxis oriented with a mission to train students in entrepreneurial skills. This is, of course, difficult to do with a theoretical learning perspective since it needs a focus on the informal context-specific tacit skills.

For example, there is a need to emphasise situational experience, the ability to cope with change as well as skills training from real case-based training. Because of this, there are reasons to argue that the pedagogic foundations of academic entrepreneurship curricula should be based on a philosophy of educational pragmatism.

This shifts the focus of the education and pedagogy to include more of know-how (actions) and know-who (networking) rather than know-what (facts) and know-why (science). That means more tacit and narrative knowledge and skills rather than theoretical knowledge.

Our pedagogic approach throughout our innovation and entrepreneurship educational platforms is: 1. An initial theoretical innovation and entrepreneurship teaching, followed by 2. an integrated tacit and narrative venture creation platform in order to create tools to be utilised in a 3. real life business start-up in an on-campus innovation and entrepreneurship real-life venture creation training The interdisciplinary educational setting is vital to implementing a culture of innovation and entrepreneurship within the university setting. Real venture development ecosystems need to be anchored in tacit project development as well as in relevant innovation and entrepreneurship teaching and research.

The co-ordinating team for developing such a cross-discipline university innovation and entrepreneurship curriculum needs to embrace members from diverse academic settings and disciplines at the strategic and operational levels in order to succeed in overcoming many of the problems typical of such kinds of multidisciplinary and cross-institutional projects.

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One major problem in many universities is faculty rivalry, which sometimes make collaborative curricula almost impossible. By focusing on the tacit and narrative venture creation part of the education and training, it is our experience that most of those blockings/problems can be overcome since it is new and open and so has less rivalry.

In the tacit and venture creation part of the curriculum, teachers essentially put the students in the driving seat.

They seek and request the knowledge and competence they need in order to develop their ventures further.

The teacher becomes a coach rather than a master.

Another problem in many university environments is that there is a lack of faculty who have a competence and practical experience in innovation and entrepreneurship.

In the GĂśthenburg masters programmes a significant ad hoc teaching staff has therefore been attracted from regional venture and business societies.

By focusing on the tacit and narrative venture creation part of the education and training, it is our experience that most of the problems between faculty can be overcome since it is new and open and so has less rivalry

To gain credibility you must return value to external and internal stakeholders There are many aspects and dimensions to the stakeholders in academic education. When we started up our programme we identified the internal and external stakeholders in detail, in terms of being positive or negative as well having small or big impact on the establishment of the novel innovation and entrepreneurship programme and its curricula.

Our multi-discipline project group and detailed project plan guided us to set the goals and objectives in our plan and also helped us to identify and prioritise the activities we needed to do to reach our goal and ultimately to implement our vision of a cross-border innovation and entrepreneurship academic programme. This was a rewarding exercise and it helped us to focus and refocus on our most important objectives.

There are a number of interest groups that you have to relate to whether or not you are in a government-backed system, as many universities in Europe are, or whether you are in a private or any other type of academic system.

If you are dealing with programmes in innovation and entrepreneurship one robust measure that most interest groups would agree on is societal return of investment in terms of the establishment of dynamic start-ups and SMEs, employment opportunities for young creative academics and direct societal return as income taxes from those entrepreneurs and employees.

The importance of a venture competition â&#x20AC;&#x201C; It has to be fun Another important part of establishing a cross-border academic innovation and entrepreneurship platform is the creation and establishment of a venture competition.

Venture Cup ( http://www.venturecup.se/vast/hem) started in 1998 as a way to promote entrepreneurship within the

How to implement an innovation and entrepreneurship curriculum by Thomas Hedner

31 EFMD Global Focus | Volume 05 | Issue 02 2011

What can you do to develop and cross-fertilise an entrepreneurial attitude throughout your institution?

– Start to develop a clear strategy and distinct project plan on how to implement innovation and entrepreneurship all over the university or business school and assure that you will follow up on your project plan – Engage young teachers/researchers with an entrepreneurial attitude and venture creation experience – Coach and support young entrepreneurial academic talents to acquire academic research and teaching merits – integrate them in your staff – Mix teachers from different academic disciplines – Focus on venture creation, the pragmatic and tacit dimensions of your educational curriculum – Engage teachers in innovation and entrepreneurship with double degrees (competencies – biomedicine/business or technology/ business) – Engage teachers from the local business society who can provide your students with tacit and narrative experience – Create a business creation venture competition anchored in the academic as well as the business society – Make a plan to communicate your results to all stake-holders (students, business, society, politicians) and follow it through

academic and university setting as well as society as a whole. It is a business plan competition and an academic course implemented throughout all academic faculties and disciplines.

The main idea of Venture Cup is to guide and support entrepreneurs with potential business ideas to start a company. During the academic course and competition, the students start with formulating the business idea and they attend a series of lectures and workshops where they work out a complete business plan. After going through the formal steps in the competition, the initial business ideas have developed into potentially investment-ready business plans.

By the end of the course, the student teams submit their ideas or projects for consideration by a professional jury. Prizes are awarded at each stage of the Venture Cup competition. In the initial stages of the competition, prizes are local and at the end of the course there are competitions on a national level with award sums in the range of 1100,000 to serve as start-up capital for the winning business plan. In all, more than 1500,000 are awarded in prizes to winning business plan entries across Scandinavia every year.

Over the past decade, our university has developed an action-based approach and active support to stimulate students in creating real-life ventures, organised a functioning organisational innovation and entrepreneurship learning programme throughout the academic disciplines, and implemented a quality assurance system and infrastructure to institutionalise our novel educational approach.

Importantly, the pedagogic approach has to be an approach characterised by pragmatism and focus on real venture creation in the academic setting and clusters.

The result of our efforts has been the development of a range of high-tech and service start-up companies in the

university cluster and, importantly, a high return of investment for society.

Our calculations match those of Massachusetts Institute of Technology (MIT) and others that roughly one 11 spent generates at least 110 in direct societal return over a decade. The societal benefits probably go beyond that, since calculations from MIT indicate that the indirect societal benefits are much larger.

To gain credibility and support for your academic innovation and entrepreneurship activities it is very important to take all stakeholders into account, and to show what the impact is on society. In that respect, you must be able convincingly to show that your programme creates a major value for external stakeholders and also that it produces an internal impact and value for your university or business school in terms of graduates and research excellence in innovation and entrepreneurship.

About the Author

Thomas Hedner is a professor of medicine (Clinical Pharmacology), MBA, as well as an innovator and entrepreneur.

Innovation and Entrepreneurship, The Sahlgrenska Academy, University of Göthenburg, Medicinaregatan 8B, Box 417, SE-405 30 Göteborg, Sweden thomas.hedner@gu.se www.medicine.gu.se/avdelningar/innovationandentrepreneurship/ This article is based on a presentation given at the 2011 EFMD Entrepreneurship Conference. The 2012 EFMD Entrepreneurship Conference will take place on 5th - 6th March 2012 at Maastricht University School of Business and Economics, Maastricht, The Netherlands and will have as a theme: Entrepreneurial Value Creation in Businesses, Families and Institutions. A view from Educators, Researchers, Policy makers and Entrepreneurs.

More information is available via www.efmd.org

32 www.efmd.org/globalfocus

The best place to find creativity and innovation is inside an organisation.

Emmanuel Perakis offers some suggestions on how to make the most of that fact

10 9 8 7 6 5 4 3 2 1 0

How to grow creativity and innovation in your company by Emmanuel Perakis

33 EFMD Global Focus | Volume 05 | Issue 02 2011

In our turbulent times, creativity and innovation increasingly constitute not just a way to promote growth, but a potential precondition for survival for states, companies and organisations.

It is no coincidence that a 2010 survey of over 1,000 CeOs by IBm services revealed that the most important “leadership competence” for the coming five years is expected to be creativity. however, companies striving to become innovative, usually focus their efforts exclusively within the area of Product and Service development (usually via dedicated departments). although this direct effort is important and adds value, since it focuses on bottom-line business development processes, at the same time it neglects powerful indirect leverage opportunities, such as differentiating business models and internal organisation.

It is no coincidence that a 2010 survey of over 1,000 CEOs by IBM Services revealed that the most important ‘leadership competence’ for the coming five years is expected to be creativity

the field of Business Models offers a number of noteworthy examples. these include Bhutan, a nation that measures success not through the well-known indicator of GPD, but through a sophisticated Gross Domestic happiness statistic (which it has developed over 30 years and addresses educational, behavioural and environmental factors). In the corporate domain another example is nobel Peace Prize Winner muhammad Yunus’ Grameen Bank (see Global Focus Volume 5 Issue 1 January 2011), which operates in the same way as any other “normal” company (it has 20,000 employees and 2,500 branches). the only difference is that profits are not given out as dividends, but reinvested for growing the company in order to support more customers. (this model is known as a “societal company”). the field of Internal Organisation also has some significant examples.

For example, the american fabric, polymer and medical equipment manufacturer Gore has no hierarchy, organisation charts or job titles. British retailer tesco segments employees according to their motivational drivers (a practice widely used though mainly in marketing). and american carpet tile producer InterfaceFLOR, best known for its sustainability practices, utilises word of mouth, rather than a PR budget to further improve its reputation.

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As well as being in themselves innovative and Alignment creative, these “unusual” practices also act British firm Yell, a business search engine as catalysts of creativity within companies. and publisher, has for over ten years followed a particularly systematic approach, which Needless to say, such approaches require clarifies its annual five strategic objectives thinking outside the box. Sometimes simply (for example, “increase employee satisfaction adopting practices used in other business sectors or functions (such as from marketing by 20%) and then communicates these intensely and systematically (via brochures, to human resources) is adequate. But meeting with managers, corporate intranet sometimes courage and calculated risk taking is required, which business managers and so on). This ensures that all modifications are usually reluctant to do, especially during in the way of working are aligned towards the desired direction. Yell’s employee satisfaction times when their main priority is securing is considered a world-class benchmark and their own positions. its culture an admirable accelerating factor Although no one can ensure innovation, we for business growth. can potentially apply some “down to earth” Individual action practices that companies can use at a No one knows who can have an exceptional reasonably low risk level, to facilitate their idea or when and where it will arise. 3M, an employees’ creativity and innovation.

American global company encompassing Below are a number of examples: brands such as Nexcare, Post-it and Scotchgard, has the objective that 15% of all First things first – hiring Apple’s Steve Jobs once said: “A people hire employees’ time will be used to develop new A people, B people hire C people and C people products. Awards are symbolic-intrinsic (something that is surprisingly more effective fire A people”. than extrinsic rewards) and submission of Innovative people are occasionally “different”, ideas is non-bureaucratic. All proposals are and are also often intense personalities. This evaluated and employees are informed of the can potentially be revealed in job interviews. reason if an idea is rejected.

A candidate who is simply “compliant”, who Suggestion schemes are a powerful approach follows unwritten but forceful behavioural rules on “the way we do things here”, probably to accelerate creativity, but only if they address the need of employees to register ideas will not support the creation of a culture of innovation. Innovation emerges from diversity simply, receive timely feedback and be intrinsically recognised for their contribution. and not from absolute homogeneity in One should not neglect that motivation is behaviour and if that makes managers not only linked to the reward of a certain uncomfortable, well “no pain, no gain”. action, but also to the perceived probability Internal communication of receiving this award and the importance Employees who know what their colleagues one places on the reward itself. are working on are more likely to generate Information access new ideas, since the stimuli they receive American hi-tech company Google not only are multifaceted. An example comes from accepts but also actively seeks “constructive Japanese retail group Ito-Yokado, which invests 3% of its turnover to finance meetings argumentation” among employees. It has a lean hierarchical structure (each manager of its executives around the world. If this has roughly 20 subordinates, rather than the sounds expensive, simply documenting in a reader-friendly way corporate procedures typical seven in similar companies), maintains (rather than developing chaotically lengthy open-space offices and ensures extensive access to information (it follows the rational documents) might be a good first step. that “you have access to everything you want except what you cannot have access to” rather than the more usual “you have only access to information that we decide you need”).

15% No one knows who can have an exceptional idea or when and where it will arise, so 3M has the objective that 15% of all employees’ time will be used to develop new products

25% Dow Chemical and BASF innovated a new way to produce propylene oxide, a chemical building block for many industrial and commercial products.

The new method eliminates hazardous effluents, creates up to 80% less wastewater, uses 35% less energy and reduces operating costs by 25%

How to grow creativity and innovation in your company by Emmanuel Perakis

35 EFMD Global Focus | Volume 05 | Issue 02 2011

Work conditions

Serendipity (luck and curiosity)

The result of stress on the human brain is that it activates the areas of sentiments (the amygdala) and repetition, while it de-activates the area of rational thinking. Employees under pressure follow known paths and applied practices, while any propensity towards “unknown” or “new” territories is subconsciously blocked. Gore in America functions without hierarchy or titles, resulting in less pressure on employees and increasing the probability of innovation and self-initiation.

The sweetening substance aspartame is a result of a laboratory accident in 1965 and the curiosity of a chemist who, quite contrary to laboratory rules, tasted the substance. Even if it is particularly difficult, companies should manage not only what they know that they know (processes, studies and so on) but, also what they know or do not know that they don’t know (for example via experimentation).

Informal activity The informal activity of two engineers within HP led to the development of its well-known inkjet printer technology, although this was not in their official job description. Freedom to express ideas in areas beyond the official responsibility of employees, as well as being given the chance to work on their own ideas, increases the motivation to be innovative.

Sustainability Focusing on responsible operations, aiming at both corporate and environmental sustainability, cultivates a thinking pattern “outside the box”, which is usually beneficial for both the planet and the company.

If all the above make you wonder if facilitating innovation and creativity is largely a responsibility of HR departments, the answer is yes.

According to the IBM Services survey, 60% of CEOs believe that the main sources of innovation within a company are not scientists, not consultants and not universities, but rather the company’s own employees.

The answer to becoming more creative and innovative lies within a company’s own people. And although the creation of a culture with the above characteristics is a multifaceted project that may last anything from two to four years, it is probably the most secure way to become innovative and creative in the long term.

60% According to the IBM Services survey, 60% of CEOs believe that the main sources of innovation within a company are not scientists, not consultants and not universities but rather the company’s own employees.

Jeans maker Strauss & Co developed a way to reduce water consumption for jeans manufacturing by up to 96%, reducing water use by 16 million litres and respective operating costs. Dow Chemical and BASF innovated a new way to produce propylene oxide, a chemical building block for many industrial and commercial products. The new method eliminates hazardous effluents, creates up to 80% less wastewater, uses 35% less energy and reduces operating costs by 25%.

Employees under pressure follow known paths and applied practices while any propensity towards ‘unknown’ or ‘new’ territories is subconsciously blocked

About the Author

Emmanuel Perakis is Managing Partner of STREAM, a European management and training consultancy info@stream-eu.com www.stream-eu.com

36 www.efmd.org/globalfocus

How corporate learning is taking the lead in corporate transformation Martine Plompen outlines the key factors that determine quality in the design and functioning of corporate learning organisations

Seeds of change: How corporate learning is taking the lead in corporate transformation by Martine Plompen

37 EFMD Global Focus | Volume 05 | Issue 02 2011

EFMDâ&#x20AC;&#x2122;s Corporate Learning Improvement Process (CLIP) has been designed to provide an assessment tool for corporate learning organisations. Internal selfassessment against a set of rigorous standards drawn up by leading members of the corporate learning community is combined with external review by experienced peers.

Since 2002, CLIP has been operational as a mechanism for quality benchmarking, mutual learning and the sharing of good practices. Several of the pioneering companies have in the meantime been re-accredited while other companies have joined the quality improvement process. Sixteen leading corporate learning organisations from across Europe have been awarded the Corporate Learning Improvement Process Quality Label (See box page 39.)

9 The clip quality framework comprises nine chapters...

28 ...twenty eight standards...

128 ...and one hundred and twenty eight criteria

At the core of the CLIP value proposition is the peer community of chief learning officers from CLIP-accredited companies. The now newly released 2011 CLIP report is based on the accumulated body of knowledge from the CLIP accreditation reviews and the CLIP quality framework of nine chapters, 28 standards and 128 criteria.

Qualitative indicators have been extracted from the SelfAssessment Reports and the Peer Review Team Reports.

This new publication complements the CLIP report released in 2008.

Supporting the needs of the business and acting as a strategic contributor A well-resourced corporate learning organisation builds on the quality of its core staff, top professional competencies and its organisational development consulting capacity. This is to allow for a careful balancing act between initiatives aimed at implementing todayâ&#x20AC;&#x2122;s strategy and those aimed at preparing for tomorrowâ&#x20AC;&#x2122;s requirements.

The examples in the new CLIP report illustrate how corporate learning organisations reinforce the change and transformation processes in their companies.

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The way forward seems to be going in the direction of enlarged and integrated approaches to learning

Building a strong talent pipeline and respecting learning lifecycles are among other key tasks for the corporate learning organisation. The top-notch corporate learning organisation is a key tool for transformation of the company, for example by acting as the company’s laboratory of strategic ideas.

The corporate learning organisation’s role as a forum for reflection and creativity can – as an example illustrates – take the path of strategic think-tank initiatives, discussion forums for senior management, learning expeditions and strategic one-day interventions.

On a more specific geographical note, the corporate learning organisation can contribute to the globalisation agenda of the company by pro-actively tailoring talent management to fit local needs.

Positioning and design of the corporate learning organisation

A two-level global learning model, for example, allows for a consultancy role by the central corporate learning organisation with local learning organisations adopting standards and customising the learning approaches.

The corporate learning organisation can adopt a world-wide “learning model” that mirrors the company’s global operating paradigm .

Also, wider organisational issues affect the corporate learning organisation. Clear involvement from the top of the overall organisation is a prerequisite for clarity of strategy.

Segmentation and sequencing Appropriate segmentation and sequencing of learning and development interventions are essential to build a sustainable longterm roadmap for creating organisational capability.

The target population needs to be clearly defined and the corporate learning Appropriate positioning and design can organisation highly focused on the learningcover a broad spectrum of approaches, to-performance value chain by, for example, depending on the overall corporate context, a portfolio of activities organised along and can range from heavily centralised, learning pathways supported by closed-loop through a matrix structure to deeply processes for needs identification, design, decentralised operational structures. delivery and evaluation.

One example documents a matrix structure The examples in the new CLIP report illustrate of 3X3 reinforcing strategic coherence of how integrated approaches are vital in this the learning initiatives. Each team in the context, especially as an avenue to implement corporate learning organisation has three a broader view of learning, with a strongly levels of responsibility and looks after one business-aligned governance structure of the of the three main strands in the portfolio: corporate learning organisation. As a solution strategic reflection and high-potential and provider, another example focuses on the executive management and competency tailored approaches for key target groups programmes. Moreover, it remains a difficult and “talent ladder” families of programmes. issue to determine the exact boundaries of the Integration corporate learning organisation’s operations.

Irrespective of the structure of the corporate learning organisation, a unified decisionmaking process is essential to ensure strategic coherence of learning initiatives.

Integration is very much a synonym for overall excellence and ideally integration is a combination of horizontal integration, local responsiveness and central support.

Full integration of people development

BOX 1 The average CLIPed corporate learning organisation has successfully capitalised on its top-level sponsorship has a strong strategic positioning with a clear mandate as a vehicle for integration is recognised as a major facilitator of the integration process is a place for cross-divisional communication and networking has embedded the transformation of the company and the related new requirements is a force of innovation and creativity within the company, irrigating it with new ideas

Seeds of change: How corporate learning is taking the lead in corporate transformation by Martine Plompen

can be achieved through the process of comprehensive training needs analysis enriched by the global competency framework and learning interventions enabled by qualified internal facilitators.

Several of the examples in the new report illustrate how a “total learning” approach is a key tool for strategic alignment and integration: from the identification of performance issues, through performance gap analysis and instructional design and content development, to deployment and evaluation.

Learning consultants working directly with senior and line managers on strategic projects is yet another avenue for ensuring strategic alignment and business impact.

Geographically speaking, a global learning board with an extended portfolio of tasks is a proven vehicle for global integration. In parallel, it is to be observed that the areas of concern are often related to integration issues.

Conclusion The full richness of the approaches in CLIP-accredited companies can only be appreciated by a detailed study of the entire scope of initiatives and services deployed.

This luxury is reserved for those people involved in the CLIP peer review process.

The new 2011 CLIP report is an attempt to share excellent practices – in a generic way – that have proven their value in CLIP-accredited companies.

It is also an illustration based on practitioner inputs of how CLIP facilitates the global learning organisation with increased business impact. The way forward seems to be going in the direction of enlarged and integrated approaches to learning.

About the Author

Martine Plompen is Associate Director, Research and Surveys Unit, EFMD.

39 EFMD Global Focus | Volume 05 | Issue 02 2011

BOX 2

BOX 3

CLIP-accredited corporate learning organisations

How a corporate learning organisation can lead corporate transformation

Alcatel-Lucent University

Examples in the new CLIP report suggest that for a corporate learning organisation to be and have a vehicle for corporate transformation it should be:

Allianz Management Institute Cap Gemini University Credit Suisse Business School Deutsche Bank Learning and Development EDF Corporate University El Solaruco – Group Santander Corporate Learning and Development Centre ERGO Management Akademie GDF Suez University MLP Corporate University Novartis Corporate Learning Siemens Learning Campus & Siemens Leadership Excellence STMicroelectronics Corporate University Swiss Re Leadership Academy Universidad Corporativa Union Fenosa, Gas Natural Group Volkswagen Coaching

A matrix structure reinforcing strategic coherence A global centre of learning expertise A two-level global learning model A capacity to address strategic issues A contribution to the company’s globalisation agenda A strategic instrument for integration

Further information Further information on CLIP can be found on the EFMD website: http://www.efmd.org/index. php?option=com_content&view =article&id=267&Itemid=212 Both the 2008 and 2011 CLIP reports can be obtained from Shanshan Ge in the EFMD Corporate Services department: shanshan.ge@efmd.org

40 www.efmd.org/globalfocus

Aston Business School in Britain has introduced a new Executive MBA programme that aims to address some of the frequent criticism the MBA has faced in recent years. John Peters explains The baby boomers’ degree, the MBA, was developed to meet the need to build the cross-functional skills of aspirant executives.

However, current expectations have evolved beyond providing knowledge across disciplines to a need for business leaders who can apply that knowledge, engage others and create sustainable solutions.

Henry Mintzberg claimed that an obsession with numbers and overzealous attempts to make management a science were damaging the discipline of management itself. He advocates an emphasis on action learning and insights from managers’ own problems and experiences. The Economist went so far as to characterise MBA graduates as “jargon-spewing economic vandals”. Are we applying a 1960s model in a 21st century world?

Now it is what executives do after the sums that matters: 21st century employers now look for agility in business school graduates to deal with context, complexity and connectedness.

The same applies to MBA programmes: new solutions must be explored rather than just tinkering around the edges.

It’s what you do after the sums that matters...

It's what you do after the sums that matters... by John Peters

41 EFMD Global Focus | Volume 05 | Issue 02 2011

The new Executive MBA programme at Aston Business School has begun with the end in mind. The outcome of the two- year programme is to develop an â&#x20AC;&#x153;agile executiveâ&#x20AC;?, adaptive and responsible and who has the ability to perform, engage and lead others through ambiguous, complex and fastchanging situations. In other words, the ability to engage people in dealing with messy problems.

The MBA core fundamentals, such as accounting, marketing and strategic thinking, are what you would expect from a top business school but these have been wrapped within an ethos of Performance, Engagement and Employability to develop a measurable improvement in executive performance.

This performance philosophy is not just a bolt on; it defines the whole programme, from benchmarking performance through understanding, generating, leading, creating and living performance. It aims to challenge participants beyond their boundaries and out of their usual context in order to develop agility. This is achieved through three overlapping, reinforcing modules:

------------------------------------------The Reflective Executive: To develop an ability to think through situations rather than merely react to them and to develop the necessary critical skills to improve, exceed and transform individualsâ&#x20AC;&#x2122; current levels of performance.

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The Responsive Executive: To develop a performance-focused mindset with coaching skills and techniques necessary to improve the performance of others.

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The Agile Executive: To develop leaders who are able to transform their insight and knowledge into solutions and performance.

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---------------------------------------A frequent criticism levelled at MBAs has been that their excellent analytical skills are only applied to tell you where you previously went wrong and that they lack people skills. Businesses want them in the playing arena, getting dirty.

MBAs need to get themselves “out of their heads”, to make connections and apply the tools they have acquired.

At the core of the Aston programme is developing the ability to perform mentally, physically and spiritually under pressure dealing with messy problems.

How does the executive learn to keep his or her head above water in the tumultuous rapids that is the modern global business environment?

Traditionally, managers are taught to manage everything but themselves.

Chaos pushes consciousness to its roots and it is only from the roots that transformation is possible. Otherwise managers will go on verbalising about changing themselves and there will be no transformation.

----------------------------------------

---------------------------------------Mind: challenge thinking (experiential, coaching, peer feedback) ----------------------------------------

Arguably the most innovative (or controversial) part of the new EMBA is the inclusion of a concurrent nutritional and fitness programme.

The programme uses experiential media to create learning. Research draws a challenging picture of the task of developing high-level skills.

We use this as a vehicle for exploring and understanding just how difficult it is to change ourselves before we look to change others. Humans are experts at game-play. We can talk the talk without changing a thing. Our physicality is a product of our unconscious habits.

To change any aspect requires us to change our habits.

It requires overcoming the “plateau effect”, the tendency of human beings to develop enough skill to get by and not progress beyond that point. Getting beyond the plateau effect requires motivation and method.

---------------------------------------Body: nutritional and fitness programme

So physicality provides a measurable vehicle to explore our approach to changing ourselves, whether it be mindset, distraction or lifestyle.

To change any aspect we need to expose a habit, create new habits and practise them.

----------------------------------------

To engage executives in a different sort of conversation, Aston has embraced a holistic approach: exploring body, mind and spirit.

Mind: challenge thinking (experiential, emphasis on peer feedback) Spirit: Engage the whole (tai chi, meditation)

IQ used to be the benchmark for determining management development.

Increasingly, new ways of thinking have emerged to develop abilities to cope with the changing world: emotional intelligence, body-mind inter-connect and the happiness index.

The programme embraces this new thinking. It is not for the faint hearted nor is it for those wanting an easy grade. It is open to those with a serious intention to actively pursue improving their performance and who want to challenge themselves and discover new horizons.

Our experiential programme includes, media training, poetry, business simulations, drama and role-play, and outdoor activities.

The programme climax is a supervised week-long visit to Asia to complete an overseas project to contextualise all aspects of the programme and provide an opportunity to conduct a “real-world” consultancy. Adhering to the philosophy of the programme, participants will produce a reflective learning journal to capitalise on and contextualise the experience.

Body: nutritional and fitness programme

It has been designed to be original, different, creative and bold while also being pragmatic, usable and instantly providing real tools that can be transferred back into the workplace.

Studies of world-class experts in a variety of settings from musical performance to medical diagnosis show that development of high-level skills requires deliberate practice focused on (1) well-defined tasks (2) at appropriate levels of difficulty, (3) obtaining feedback, (4) correcting errors and (5) continuing to practice.

Arguably the most innovative (or controversial) part of the new EMBA is the inclusion of a concurrent nutritional and fitness programme

The ability to coach others to improve performance is another fundamental of the course. As well as a dedicated module to develop coaching skills, each participant will receive individual coaching sessions from professional coaches who will also guide them through their own coaching “pods” (a group of three: coach, coachee and observer) as they practise the skills learned from the coaching module.

----------------------------------------

It's what you do after the sums that matters... by John Peters

---------------------------------------Spirit: Engage the whole (tai chi, meditation) ---------------------------------------In a chaotic world, executives need to avoid distraction and improve their ability to focus, which is at the very root of judgment, character and will.

Internal readiness precedes external effectiveness. Cultivating the minds of leaders requires effective selfmanagement and heightening their levels of perception to enhance attention and awareness.

43 EFMD Global Focus | Volume 05 | Issue 02 2011

---------------------------------------Feedback is a priority within the programme. The difference between a chat and a conversation is that a conversation requires an action at the end. Actions can be measured and performance improved. The programme has an emphasis on peer-to peer appraisal for reflective insight. Performance appraisal across the diverse functional experiences and cultures of the participants broaden the dialogue, exposing participants to a multiplicity of views.

It is our view that 80% of the real learning is lost in group work by To address this, the programme concentrating on what was achieved explores mindfulness, the facility to rather than how. Hence, using cultivate the quality of being awake, 360-degree appraisal, each piece of present and accepting of the moment’s group work is measured formally, both experience, which has a transforming absolutely and relatively, throughout the potential on how we are with ourselves, programme with peer-to-peer feedback how we are with others and how we providing participants with a reflective are with stressful, difficult and insight into how they performed. challenging situations.

Continuing this theme, the disturbing Research on the benefits of meditation question for every aspect of any MBA is in reducing stress has convinced many how relevant is it? And is that relevance corporations to use meditation training by default or design? What, precisely, as an integral part of their stress does each facet of each module management programmes. The contribute to the overall effectiveness experience of tai chi is used also to of the executive? How much of each reflect on the “mind–body–spirit” programme is essential, desirable or nature of a leadership paradigm that just vaguely interesting? elevates and hones the intellectual Aligning the Aston Executive component in isolation.

MBA to a philosophy of A unique aspect of any EMBA performance will challenge programme is the collective us to constantly evolve professional experience of its the design. Every participants, which greatly enriches aspect will be the learning environment. Aston’s measured by approach is used to allow for the those it is sharing of diverse perspectives on designed to various topics; this interaction results develop – in a challenging, stimulating learning each cohort experience that provides for maximum of executives – return on time and resources invested. down to specific ---------------------------------------subject areas and their relevance, value and importance.

From the start, the programme itself is designed to be agile to the needs of those it aims to improve.

80% It is our view that 80% of the real learning is lost in group work by concentrating on what was achieved rather than how

ABOUT THE AUTHOR

John Peters is Director of Performance, Aston Executive MBA.

44 www.efmd.org/globalfocus

Unlocking leadership talent in the humanitarian sector In an era of war and natural disasters, the work of international nongovernmental organisations has never been more vital.

But the humanitarian sector lacks leadership resources. Rudi Plettinx and David Altman describe how the Center for Creative Leadership is helping the helpers

Aid and development organisations are experts at logistics and mobilisation but their impact is often limited by weak leadership capacity and communications problems

Unlocking leadership talent in the humanitarian sector by Rudi Plettinx and David Altman

There are few people in the world who are challenged to do so much with so little as those who work in the INGO (international nongovernmental organisation) sector.

Working with few resources relative to the needs that exist in the world and often little formal authority to change the structural forces that lie at the root of problems faced by society, INGOs nonetheless routinely take on an array of complex challenges such as hunger, health and sanitation, education, poverty and economic development, disaster relief, discrimination and violence.

Their ability to be effective in addressing these challenges affects the lives and livelihoods of billions of the world’s people. But if they were better able to unleash their talent, could they be more effective?

45 EFMD Global Focus | Volume 05 | Issue 02 2011

Among the report’s findings: » Although technically sound, aid and development operations often struggle and fail because of “people issues”. In other words, leadership is lacking or concentrated in too few individuals with the wrong skills and training » The number-one failure of leadership at every level was lack of communication – up, down and sideways. Part of that was a consistent failure to have “courageous conversations” and deal with poor performers » Ironically, there was also an issue of too much communication facilitated by social networking media, which makes it difficult if not impossible to convey accurate messages and prevent damaging rumours from circulating around the world »Leadership recruitment and retention challenges – and competition with the private sector – were also top concerns

The short answer is a resounding “yes”. The Center for Creative Leadership (CCL, www.ccl.org), a global provider of executive education to develop better leaders, and People In Aid, (www.peopleinaid.org), a non-profit network of more than 180 member organisations dedicated to improving organisational effectiveness within the humanitarian and development sector worldwide, surveyed the sector. We found that aid and development organisations are experts at logistics and mobilisation but their impact is often limited by weak leadership capacity and communications problems.

However, we recognised that we were not doing enough for most of the people in the world – those who live at the middle and bottom of the socio-economic pyramid.

CCL’s work around the world, particularly in Africa and India, puts us into working relationships with a number of INGOs, and we thought we would benefit from a look at their leadership practices and challenges.

In conversations we had with many INGO and grassroots leaders throughout India, we heard that over two million INGOs operatives cover the country and have the capability for doing massive capacity building.

The CCL study and report Leadership and Talent Development in International Humanitarian and Development Organizations is based on interviews with 37 INGOs in Europe, Africa, Asia and America.

What was needed (but missing) was an effective and simple curriculum and tools. There was significant interest in quality leadership development approaches but affordability was essential. In the social sector, the ability to pay for a leadership programme may be only a dollar.

We found that these INGOs face many of the same leadership and talent management challenges as the private sector but they also have issues specific to not-for-profit groups charged with large-scale humanitarian missions.

Over the course of its four decades of involvement in leadership development, CCL has conducted research and pioneered approaches to intervention that are now standard practice in the field and helped to develop hundreds of thousands of leaders.

Out of these experiences, we learned that in order to address these needs and constraints we would have to think very differently from the traditional view of executive education.

We adopted a series of practices from the spheres of openOur partner for the survey was People In Aid. Its ethos and source, bottom of the pyramid and social innovation. We values are a good fit with CCL’s mission to “advance the brought these approaches into an integrated leadership understanding, practice and development of leadership for development model for social sector organisations: the benefit of society worldwide”. » Simplified curriculum (but not simple) that could be delivered by facilitators without extensive skill-building and Those interviewed ranged from chief executives and members credentialing of management teams to HR directors and their direct reports. They often see the “people” problems before anyone » Tools, toolkits and practices that can be used at marginal else and try to produce solutions within the constraints of their cost without licensing, royalty fees or complex contracts. organisational structure and, more importantly, culture. » Train-the-trainer programmes to transfer these Many of them were already rethinking who they are and curriculums, tools and capabilities to local trainers so that what they do in the face of global economic upheaval and they could adapt and deliver these at the local level, in local an unprecedented confluence of wars and natural disasters. language and at realistic local cost.

46 www.efmd.org/globalfocus

The models that we developed have since been used to develop over 100 trainers and some 10,000 leaders across the world. Some of the indigenous trainers we worked with have launched new institutions for leadership development in Ethiopia, Kenya, India and the Caribbean.

Since then we have expanded on this model and are developing an extended series of solutions for the social sector that will facilitate these models being scaled further.

These include: An “early leadership” trainer toolkit that can be used to develop essential leadership and life skills in young people. As one example, the toolkit has been used in Kenya to help heal the wounds of the 2008 ethnic violence and build an appreciation for diversity.

We continue to expand the toolkit and are working to disseminate it to schools around the world. The aim is for every child to enhance their awareness of themselves, appreciate others, manage conflict effectively and approach life’s hardships with resilience and determination.

These are skills that are rarely formally included in standard school-based education but are among the most fundamental drivers of success in life.

A social innovation curriculum that can equip would-be change-makers with the leadership and innovation skills they need to create and enact new solutions to entrenched social challenges.

In the world today, we see a rising interest among young people in addressing the great challenges of our time – from the environment to hunger and poverty. So, too, those nearing retirement are looking to connect anew with the social change movements that characterised their youth.

A women’s empowerment toolkit focused on the billion-plus women around the world who are among the most marginalised with regard to education and opportunity. As microfinance has demonstrated, opportunity extended to these women can, almost more than anything else, change the lives of the poor. When money is in the hands of women, it enhances the well-being of entire families who benefit from better education, nutrition and health.

A “creative leadership conversations” toolkit that seeks to enhance the art of collaboration and co-creation using the practice of coaching. The boundary-spanning problems

In the world today, we see a rising interest among young people in addressing the great challenges of our time – from the environment to hunger and poverty. So, too, those nearing retirement are looking to connect anew with the social change movements that characterised their youth

Unlocking leadership talent in the humanitarian sector by Rudi Plettinx and David Altman

47 EFMD Global Focus | Volume 05 | Issue 02 2011

in the world require interdependent leadership approaches. The old paradigm of influence is less effective here than gaining true engagement and commitment through weaving solutions out of common understanding and shared interest. Coaching seeks to co-create and gain commitment through deep dialogue that uses the tools of listening, inquiry and feedback.

As we work to build leadership capacity in the social sector we recognise that we are riding a rising wave.

Funders are increasingly interested in building local capacity in developing countries, creating self-sustaining solutions and building cross-industry collaborations that include INGOs, government and business.

The need for the work that the social sector does is as great as ever. The need for leadership skills that enable those working in the sector to rise to these challenges cannot be understated.

At CCL we are committed to developing affordable and scalable innovative leadership development approaches for the social sector. We welcome the opportunity to collaborate with others on this agenda. The challenges we face in the world require fresh thinking and greater collaboration. Indeed, they require creative leadership.

ABOUT THE AUTHORS

Rudi Plettinx is Vice-President and Managing Director Europe, Middle East, Africa, at the Center for Creative Leadership..

David Altman is Executive VicePresident, Research, Innovation and Product Development, at the Center for Creative Leadership.

FURTHER INFORMATION

Leadership and Talent Development in International Humanitarian and Development Organizations is available on the Center for Creative Leadership web site at www.ccl.org

48 www.efmd.org/globalfocus

Mark Anderson offers some practical tips on how to extend leadership skills throughout an organisation

LEADERSHIP IN PRACTICE Leadership is as much written about as it is hard to define. But - taking only the tough financial and economic context and the challenging rapidity of technological change - there has rarely been a time when leadership has been more in demand.

I believe that many people have the opportunity to display leadership and that they should be encouraged to think it is possible to do so. They should be empowered to believe that we can all be leaders, irrespective of job titles and hierarchy.

As a result the definition of what makes a good leader and the availability of experiential and development programmes to turn average leaders into excellent ones are at a premium.

It is incumbent on those of us in roles that are more obviously about â&#x20AC;&#x153;leadershipâ&#x20AC;? because of our seniority or title to pluralise leadership, to make leaders of as many of our staff as possible. And we can do this by focussing on how practical leadership is; how it is about the day-to-day issues that many staff can influence.

Occasionally there are those in life who are created with what we would regard as leadership traits. But for most of us, leadership skills, like any others, have to be identified, refined and honed.

And as such it is important that we understand that leadership is not a set of skills reserved for senior management. It is not a quality defined by hierarchy. Nor is leadership a tool available only to those CEOs of large organisations who have the ability to make a difference simply through the scale of their domains. Nor still is leadership about theory. It is not a calculated concept that can be pre-learned and then applied in a broad range of circumstances.

If we are all to be effective leaders, we should recognise and evangelise that there is a structure to utilising leadership skills.

I see these in seven dimensions, which I have set out recently in The Leadership Book.

Occasionally there are those in life who are created with what we would regard as leadership traits. But for most of us, leadership skills, like any others, have to be identified, refined and honed

49 EFMD Global Focus | Volume 05 | Issue 02 2011

Leadership in practice by Mark Anderson

1.

2.

3.

4.

Leadership self

Vision and Strategy

Leadership team

Leading the organisation

A key paradox about leadership is that the great leaders are at once centrestage yet also back-stage: centre-stage because they need to have the charisma, articulacy and guts on a repeated basis, often in front of others, to lay out their organisation's vision, including all the tough choices

Teams are always best lead when they know the direction they are heading. An obvious truth you might think but one too easily undermined by a lack of clarity in direction, repeated changes in direction or even by a failure to communicate direction clearly and often enough.

All leaders need a strong team around them. For the team to flourish, the leader must first be sure he has the right jobs and then find the right people for the jobs - not the other way round.

Creating jobs for the people you have, or want, rarely maximises performance.

On a variation of an old mantra, leaders should be seen and heard – seen around the organisation on a regular basis (increasingly easy with the power of intranet-delivered video) and heard to say the same things to all people.

The effective leader pursues a simple objective: to set his or her team's direction with ruthless and relentless simplicity.

And relentlessness is key: leaders are rarely believed unless they say it, say it again and say it again!

Second, the leader must be bold enough to be sure that all the team are better at their jobs than he could ever be. In this respect the great leader is jack of all trades and master of none.

They are also back-stage because their overriding goal must be to empower all their staff to be great leaders in turn and they must be prepared to stand back and let them shine.

This demands from great leaders self-awareness of the way they affect others, of the use of their time and, above all else, a continuing sense of humility.

Supporting this continual attention to repetition, the great leaders are on the look out at all times for resistance to change – most often represented by the dictum “we have always done things this way”. The leader should never be afraid of arguing for change nor of removing the obstacles in his or her way.

50 www.efmd.org/globalfocus

5.

6.

7.

Leading performance excellence

Customers leading you

Leading in partnership with suppliers

The most successful organisations create a culture of success among their staff, rewarding excellence through incentives and responsibility and also ensuring staff receive all the feedback they need to flourish, notably through on-going feedback (one-to-ones are vital) as well as more formal appraisal systems.

Organisations should recognise that their goal is to delight their customers. A key component to achieving this is to bring their customers inside their organisations – in development processes, through focus groups and feedback mechanisms, and via systematic analyses of customer service issues.

It is too easy, especially in an environment of permanent cost reduction, to see suppliers as adversaries.

On the contrary, they are potentially one of the leader's greatest assets since they provide a partner-based opportunity to access fresh insights and different skills.

The effective leader can Effective leaders also never support this approach by forget that giving personal using a process I have praise to others is a vital called “The Customer tool in raising esteem and Journey” – analysing every also commanding respect touch point a customer has (especially when many of us with an organisation from find it is easier to criticise). the customer's viewpoint.

The very best leaders ask: what are suppliers for? And they discover the empowering answer: that they a part of the leadership team.

No leader is immune to the need to learn and to show his or her staff and colleagues that learning is a necessary and positive part of business life

Learning to lead No leader is immune to the need to learn and to show his or her staff and colleagues that learning is a necessary and positive part of business life.

A leader has many tools at his or her disposal to be able to do so: the vast array of information accessible via the internet; the transformational power of technology to challenge assumptions and boundaries; and, for the leader who recognises how the human resources team is perhaps his or her most significant business partner, the many resources available to empower, motivate and incentivise staff.

These seven dimensions are the basis for a practical day-to-day leadership. They require attention to detail and not theory, to the reality of daily challenges and not to assumptions.

Except for the lucky few to whom it comes naturally, leadership is tough. It is complex, demanding, relentless, multi-faceted and paradoxical. It is as exciting as it can be intimidating and, above all else, it requires thoughtfulness and humility as leaders put others first.

ABOUT THE AUTHOR

Mark Anderson is President, Global Strategy & Business Development, Pearson International. The Leadership Book (2010) is published by FT Prentice Hall.

51 EFMD Global Focus | Volume 05 | Issue 02 2011

HOW STRONG IS YOUR MBA OFFER?

Do you know what attracts prospective students to your MBA, what they want from the experience, how they find out about your business schools and much more? The next round of the Tomorrow’s MBA study starts in October 2011, providing participating schools with detailed information on every aspect of the prospective MBA student.

Carried out by CarringtonCrisp, with support from EFMD and ABS, the study gives each participating business school individual feedback on what prospective students think of their MBA offer. Results are broken down by those interested in full-time study, part-time study, distance learning and by national groups.

A taste of this year’s findings can be downloaded free of charge in the Executive Summary at www.carringtoncrisp.com Find out how your business school can take part in and benefit from the next round of Tomorrow’s MBA by contacting Matthew Wood at EFMD or Andrew Crisp at CarringtonCrisp by email at matthew.wood@efmd.org or andrew@carringtoncrisp.com respectively. Schools booking before 1 July 2011, get a £500 discount on the usual price of £3500.

52 www.efmd.org/globalfocus

Supporting local and national communities has long been a criterion of the EFMDâ&#x20AC;&#x2122;s EQUIS accreditation, Mark Thomas and Julie Perrin-Halot recount French experiences in this area

How business schools can contribute to the community

Beyond the campus: How business schools can contribute to the community by Mark Thomas and Julie Perrin-Halot

EFMD recently conducted a survey of its member schools to see which of the ten chapters of EQUIS had made the most important contribution to their development.

Perhaps not surprisingly they placed “Internationalisation” top of the list.

And which chapter was cited the least?

“Contribution to the Community”.

This should not surprise us either. In fact, until recently, the Contribution to the Community standard has remained quietly in the background of the EQUIS accreditation requirements. We believe that this silent standard has finally come into its own as it both requires and encourages schools to look beyond their walls and evaluate their own positive impact within their community as well as to differentiate themselves in an increasingly competitive market.

This standard serves as evidence of the already visionary thinking of EFMD when it incorporated these requirements into the standards, thus espousing a more holistic vision of schools and their role in society beyond the production of graduates.

53 EFMD Global Focus | Volume 05 | Issue 02 2011

One of the loudest voices has been that of current and future students. Student associations have become increasingly active in the last few years. Potential students are turning the questions around to ask institutions, “Just how is your school giving back to society?” A school’s role in the community, both local and at large, has now become a criterion of choice.

The Contribution to the Community standard should serve as a guide for schools to ensure that they are active across the range of areas that constitute contribution. It provides a general framework for institutions to record and evaluate their actions. This standard becomes more relevant once it is aligned with more precise tools.

Let us take the example of what is currently being done in France.

In 2008 the associations that represent universities and Grandes Ecoles in France began working on a documented framework to assist higher education institutions (HEIs) in determining objectives and implementing actions related to social responsibility and Most of us have read at least some of the myriad articles that have been written either sustainable development in five main areas: condemning management schools for their – Strategy and governance supposed role in the recent crisis and the – Social policy and community outreach resulting shock waves or defending their – Environment non-responsibility while issuing a call to action to ensure that they are an integrated – Education – Research part of the solution.

But regardless of the positions taken, the debate has been opened. Corporate participants in schools’ business advisory councils are requesting reports on activities; national authorities are implementing new legislation; and stakeholders from various constituencies have raised their voices and are requesting accountability.

Once the framework was decided, a scorecard was created to help schools to evaluate their relative positioning with regards to a four-level gradation of accomplishments and outcomes.

HEIs were asked to submit the completed framework annually, thus tracking progress over time and targeting areas where additional effort was needed.

Corporate participants in schools’ business advisory councils are requesting reports on activities; national authorities are implementing new legislation; and stakeholders from various constituencies have raised their voices and are requesting accountability

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The CSR / SD categories, much like the EQUIS standard, place the schools in a position of having to ask themselves questions about what it means to be a ‘good citizen’ and to what extent they are achieving this In 2007 the French government made a series of commitments to sustainable development during the Grenelle de l’Environnement summit meetings. These commitments became mandatory through the “Grenelle 1” law of 2009.

Article 55 of the Grenelle 1 relates to the HE sector in France, stipulating that all institutions must draft and implement a plan to ensure that environmental concerns have become central to campus planning and development. It also states that certification of schools based on sustainable development criteria would potentially be put into place.

– Urban integration of the institution – Involvement of the institution in the local sustainable development policy These categories, much like the EQUIS standard, place the schools in a position of having to ask themselves questions about what it means to be a “good citizen” and to what extent they are achieving that. Then they are given the opportunity to reach beyond that and evaluate what it takes to actually motivate stakeholders and initiate change.

As momentum is gained, tomorrow HEIs may find themselves using tools such as the newly issued ISO 26000 standards (published November 2010). This text, entitled Guidance on Social Responsibility, presents a vision in its nascent stage concerning organisations taking responsibility with respect to sustainable development, society and their diverse It is within this context that the French HEIs are now moving stakeholders. It is designed to create a common terminology forward. Diverse tools are being put into place to assist them and to help organisations implement and report on actions. in structuring their actions.

These standards, positioned as guidelines for good practice, are non-certifiable and despite lingering controversy push As mentioned above, the existing framework covers a range of different areas in which CSR and SD initiatives need to be further by inciting organisations to take a much more systemic accounted for. The second chapter focuses on what translates approach to CSR. While the initial texts were focused primarily on environmental concerns, the institutions and their representatives immediately broadened their thinking to integrate other dimensions of corporate social responsibility (CSR) and sustainable development (SD).

literally to “Territorial Anchoring.” This part is the closest to the EQUIS standard.

It covers how HEIs create and implement policies concerning their personnel in areas such as health and safety, diversity, and employment and access for disabled persons. It also covers support given to student associations and outreach projects. Finally, it covers how the school participates in actions of solidarity at the local, national and international levels. HEIs are asked to report on and evaluate their activities in the following categories: – Commitment of the institution to local economic development – Socio-cultural initiatives for local populations

This movement towards greater responsibility has been bringing original ideas from unexpected places. Mobilisation around both institutional and community oriented projects has increased and people have begun to become more vocally critical and/or supportive of institutional behaviour as concerns sustainable development and social responsibility.

The need for centralised piloting of activities linked to these themes has begun to emerge and schools are adopting a variety of governance structures.

For example, Grenoble Ecole de Management, following the signing in 2007 of the Global Compact, put into place a CSR/ SD steering committee. This is the only body in the school that brings together management, academics, administrative staff

Beyond the campus: How business schools can contribute to the community by Mark Thomas and Julie Perrin-Halot

and students. This group gives a voice to the primary actors in the life of the institution and ensures shared responsibility for commitment. It has also brought greater breadth to actions as it has pushed the school to work both inside and outside its own walls.

The Steering Committee is comprised of eight task forces, each dedicated to an area that was determined as a priority for development.

Notable outcomes include the writing and signing of a CSR charter for the institution, the integration of CSR/SD principles into the global purchasing policy, management training, financial incentives for staff to use public transport, campaigns for reducing paper consumption, and better use of electricity and water.

Curricular reform has also been adopted to ensure the embedding of the notion of “responsibility” into different disciplines and hence programmes. A handful of outreach and humanitarian activities, mostly lead by student associations but with an increasing participation by members of staff have also been undertaken.

55 EFMD Global Focus | Volume 05 | Issue 02 2011

We will only be partially successful in this mission if we limit our promotion of these notions to the classroom.

We must champion them as institutions making a collective commitment to those with whom we interact every day and by reaching out to the communities we are interacting with

Our ultimate objective is to educate the “responsible” managers of tomorrow. The student body has therefore been placed at the centre of these activities.

We will only be partially successful in this mission, however, if we limit our promotion of these notions to the classroom.

We must champion them as institutions making a collective commitment and setting an example of responsible behaviour by reaching in to those with whom we interact every day and ABOUT THE AUTHORS by reaching out to the communities we are interacting with.

Mark Thomas is Associate Dean and Director of International Affairs at Grenoble Ecole de Management, Is it not the intention of chapter 7 Contribution to the France.

Community to assist schools in setting the example? We believe it is.

Julie Perrin-Halot is Associate Dean and Director of the Centre for Quality and Institutional Development at Grenoble Ecole de Management.

56 www.efmd.org/globalfocus

Anthony Buono and Rajendra Sisodia explain why companies that act with a conscious desire to do the right thing seem to do better than those that do not – and how this can apply to business school teaching

There has been sustained criticism of the focus of business school education and the role that we might have played in (yet another) corporate crisis.

As a result of the most recent rash of corporate scandals, increased pressure has once again been placed on business schools to put a greater emphasis on ethics and responsibility, challenging us to analyse critically the way in which we teach business. We are told we should focus on broader questions of business’s implications for, and impacts on, a broad array of stakeholders and provide a foundation for responsible business decision making.

A lingering question, of course, concerns what these models and approaches might look like in practice.

At Bentley University we have taken on this challenge through the creation of our Alliance for Ethics and Social Responsibility and its close links with Conscious Capitalism, a fast-growing global movement built on a philosophy that lies in stark contrast to the traditional business gospel.

Since the creation of its Center for Business Ethics in 1976, Bentley has continually promoted a sense of ethics and social responsibility through teaching, research, and corporate and community relations.

Based on the recommendations of a 2002-03 Task Force on Ethics, Service and Social Responsibility, which called for great collaboration, co-ordination and a clear, organising direction across these initiatives, the Bentley Alliance for Ethics and Social Responsibility (BAESR) was created (see Figure 1).

BAESR’s mission is “to amplify and extend the work of the autonomous centers and initiatives on campus, supporting and encouraging greater awareness of, respect for, and commitment to ethics, service, social responsibility and sustainability in our research, curricula and campus culture”.

A unique feature of the Alliance is its integrative focus on ethics, social responsibility, civic engagement and sustainability.

In pursuit of its mission, BAESR’s efforts focus on: – Supporting and encouraging collaborative and applied cross-disciplinary research that has the potential to significantly affect current practice – Influencing curriculum development and pedagogical innovations intended to make our students more ethically sensitive and socially aware

57 EFMD Global Focus | Volume 05 | Issue 02 2011

A conscious purpose by Anthony Buono and Rajendra Sisodia

Figure 1:

External Relations

Bentley-Mmofra Trom (Ghana) Partnership

Global Business Ethics Symposium Corporate and Community Partners & Teaching Workshop sponsored by state street Foundation UN Global Compact Academic Network: PRME American College & University Center for Presidents Climate Commitment

Graduation Pledge Alliance

EFMD Responsible Management Education Initiative

Bentley Microfinance Initiative

Campus Life

Habitat for Humanity Club

Sustainability Task Force & Bentley Green Society

Bentley Ethics Policy & Campus-wide Ethics Committee

Ethics Point

Bentley Beliefs

Business Ethics

Women’s Leadership Institute

Multicultural Center

ServiceLearning Center

Valente Center for Arts & Sciences

Conscious Capitalism Institute

Institutional Review Board

Risk Management Research Program

Geneen Institute for Corporate Governance

Research & Scholarship

Next Generation ESG Scholars Workshop

Diversity Initiative

Wilder Teaching, Learning & Curriculum Development Initiative

Complex Problems/ Creative Solutions

Spiritual Life Center Net Impact Chapter Civic Leadership Program (Graduation Pledge Alliance Chapter) Academic Integrity System Liberal Studies Major

Teaching & Academic Life

– ensuring a broader application of these principles and ideals in campus life

and outreach to the academic, corporate and not-for-profit worlds.

– attempting to foster life-long civic engagement and a commitment to responsive corporate citizenship among our students

examples of these core initiatives include a revamped academic Integrity system (with a full-time academic Integrity Co-ordinator), a decade-old organisation-wide diversity programme, a newly constituted Institutional Review Board (IRB), a College ethics Policy and Oversight Committee, a campus-wide sustainability task Force, an annual workshop for faculty interested in integrating these topics into their discipline-based courses and a series of campus-wide programmes that highlight issues associated with ethics, civic engagement, sustainability and social responsibility.

– Working closely with external organisations – partnering with academic and professional associations, corporations and not-for-profit organisations in pursuit of these goals. this collaborative effort is dependent on the commitment of a broad range of stakeholders, including Bentley faculty, administration, staff, students and alumni as well as business executives, corporate partners, relevant associations and other colleges and universities in an effort to enhance and disseminate these ideals. the alliance has helped us to solidify ethics, responsibility, service and sustainability as key domains of distinction at the university. Combined with a series of programmes and activities across the institution, this initiative has led to a four-pronged approach that attempts to shape and influence a sense of ethics, service, responsibility and sustainability throughout the classroom, campus life, the institution’s research agenda

The Alliance has helped us to solidify ethics, responsibility, service and sustainability as key domains of distinction at the university

58 www.efmd.org/globalfocus

Over the past few years, one of the driving forces within the alliance has been a growing partnership with a new way of thinking about business.

Based on the research of Bentley marketing professor Rajendra sisodia (Firms of Endearment: How World Class Companies Profit from Passion & Purpose, Wharton university Press, 2007), BaesR has been a strong supporter of the need for a more conscious approach to business. the research found that these “firms of endearment” paid their rank-and-file employees much better than their peers, had suppliers who are profitable, invested heavily in their communities, paid taxes at a higher rate than their corporate counterparts, provided remarkable customer service, invested in making their operations more environmentally sustainable and did not externalise costs onto society.

Yet, while such spending would suggest that there would simply be less left for investors, the opposite is true. these companies have dramatically outperformed the market over a ten-year period, by an astounding nine to one ratio.

Beyond financial wealth, these companies also created many other kinds of societal wealth: more fulfilled employees, happy and loyal customers, innovative and profitable suppliers, thriving and environmentally healthy communities and more. the underlying business philosophy, based on four interrelated principles (see Figure 2), is referred to as “Conscious Capitalism”.

Its basic premises are straightforward.

– First, business can and should be carried out with a higher purpose in mind, moving beyond a limited view of maximising profits. a compelling sense of purpose creates an extraordinary degree of engagement for all stakeholders, releasing tremendous organisational energy.

– second, the business is explicitly managed for the simultaneous benefit of all of its stakeholders, represented by the acronym sPICee: society, Partners, Investors, Customers, employees and environment. a conscious business aligns the interests of all stakeholders so that what is good for one is good for all. Within this context,

Figure 2:

Beyond profits

Beyond shareholders

Higher Purpose

Conscious Culture

Beyond traditional business models: Tactile

Stakeholder Orientation

Conscious Leadership

Beyond command and control

A conscious purpose by Anthony Buono and Rajendra Sisodia

society is listed first for an important reason – businesses must ensure that they are on the “right” side of society, that they have a positive net impact on the world.

– Third, such businesses have conscious leaders, driven primarily by service to the firm's purpose rather than by power or money. These individuals lead by mentoring, motivating, developing and inspiring people and not through command-and-control and “carrot and stick” incentives.

– Finally, such businesses have unique cultural characteristics, captured by the acronym TACTILE: Trust, Authenticity, Caring, Transparency, Integrity, Learning and Empowerment.

The word tactile also suggests that the cultures of these companies are very tangible to their stakeholders as well as to outside observers; you can feel the difference when you walk into a conscious business compared to one that is purely driven by a profit motive and just for the benefit of shareholders.

Beyond financial wealth, these companies also created many other kinds of societal wealth: more fulfilled employees, happy and loyal customers, innovative and profitable suppliers, thriving and environmentally healthy communities ABOUT THE AUTHORS

Anthony F Buono is professor of management and sociology and founding co-ordinator of the Alliance for Ethics and Social Responsibility at Bentley University in the US. Rajendra Sisodia is professor of marketing at Bentley University and co-founder and chairman of the Conscious Capitalism Institute.

The essence of Conscious Capitalism lies in stark contrast to traditional approaches to business. Most companies try to maximise their gross margin by looking for the cheapest suppliers they can find and then using whatever bargaining power they have to squeeze them as much as they can to get ever-lower prices.

As a result, they end up with low-quality suppliers who struggle to stay profitable and who can ill afford to invest in new technologies or anything else that will improve their quality or make their products more innovative.

Most companies also try hard to keep their payrolls down, minimising what they pay their rank-and-file employees, and are stingy with critical benefits such as health insurance.

They use part-time employees as much as possible, keeping them under the threshold where they would qualify for any kind of benefits. They provide minimal training to their employees and accept high employee turnover as inevitable. The result is a questionable set of priorities and sense of how business should be run.

Conscious businesses, in contrast, knowingly operate with lower gross margins but are still able to achieve higher net margins than their more traditionally minded competitors.

Conscious businesses are very selective

59 EFMD Global Focus | Volume 05 | Issue 02 2011

about their suppliers, looking for innovative, quality-focused companies that also operate in a conscious manner. They enter into mutually beneficial long-term partnerships with these suppliers. Suppliers are well paid and in turn pay their own suppliers and employees well.

Conscious businesses typically operate with extremely low levels of employee turnover, thus saving greatly on new employee hiring and training. Employees at such companies are loyal, experienced, highly engaged and productive. Such businesses take great care to hire people whose personal passions are aligned with the corporate purpose.

Conscious businesses have lower administrative costs because they continuously strive to eliminate non-value adding expenses, gathering ideas from their employees and suppliers about how to do so.

This philosophy creates a virtuous cycle that consistently delivers superior financial performance as well as many other positive impacts, a view that is increasingly being embedded across the university.

It is the conceptual foundation for our recently formed Net Impact chapter, a theme for many thought-provoking presentations and events across campus, the basis for an increasingly popular elective at both the undergraduate and graduate levels, and a guiding theme for our planned global MBA programme.

The university has also been hosting an annual research conference, focusing on developing a greater understanding of how such conscious businesses are able to operate with superior financial results while creating many forms of wealth and well-being for all of their stakeholders.

Our goal is to illustrate how firms and their management can have net positive impact on the world, bringing to life for our students a conscious way to conduct business.

We are allying with a conscious purpose in mind.

ABOUT THE AUTHORS

Anthony F Buono is professor of management and sociology and founding co-ordinator of the Alliance for Ethics and Social Responsibility at Bentley University in the US. Rajendra Sisodia is professor of marketing at Bentley University and co-founder and chairman of the Conscious Capitalism Institute.

60 www.efmd.org/globalfocus

Ensuring young people, particularly the much-vaunted Generation Y, have a positive firstâ&#x20AC;&#x201C;time experience of the working world is essential to their future performance argue Sylvie Deffayet and Anne Dhoquois

Integrating Generation Y into the workforce by Sylvie Deffayet and Anne Dhoquois

61 EFMD Global Focus | Volume 05 | Issue 02 2011

Numerous studies have been devoted to “Generation Y”, also known as the “Millennials”. (They are generally defined as being born between 1978 and 1994 and represent 20% of the French population and 26% of the American.)

They seem to have shaken up the world of work. We should, however, be careful not to jump too quickly to the conclusion that this is a generation of rebels, less interested in working than previous ones.

In a study conducted by one of the writers of this article (Anne Dhoquois), concluded by the other (Sylvie Deffayet), and published in “Premier emploi: quand les jeunes racontent” Autrement, Paris, 2010, young adults kept a personal diary to note their experiences on entering employment. The entries show that these young “Y”s share the conviction that it is important to realise their dreams through and in their working lives.

“It’s very important to keep your motivation up in order to follow the career of your dreams” is a lesson they learned observing their own parents. “Despite the personal success their jobs would imply, I’ve never felt my parents fulfilled by their jobs. This has obviously had an effect on my own choices. I’ve always wanted to come back home in the evening not saying to myself ‘Do I have to go to work tomorrow?” But then, “work does help you to grow up”.

Their remarks lead us to see how important these work experiences are, serving as the foundation on which these young people relate to work and to what they expect to experience next in their jobs.

It is difficult to overemphasise the fact that entry into the world of work is a step that conditions how the rest of a person’s career will be envisaged and lived and whether that will be constructive or not.

If negative, it is essential for the person to have the space or the time for reconsidering this experience in order not to generate a set of negative beliefs that can be self-reinforcing in the mind of a young adult entering professional life. Studies show how significant the first manager or internship supervisor is as a figure of authority in giving substance to this first relationship with work.

It is difficult to overemphasise the fact that entry into the world of work is a step that conditions how the rest of a person’s career will be envisaged and lived

62 www.efmd.org/globalfocus

Despite what some say, these young people are quite ready to get involved, even to a very high degree, in their work

employers should train the managers responsible for these young people how to deal with this dimension. If they do not they should not be surprised if the relationship with their young employee ends in divorce. today, however, the time necessary for mentoring new recruits is considerably underestimated if not completely ignored.

Young people need to have confidence and allow themselves to make their own choices. this would seem evident – but how many orientate themselves on the basis of who they really are? the choice of a field of study today is much more likely to be the result of external pressure (parents, social environment and so on) than a reflection of something a youngster has actually chosen.

offered in a stand-alone educational context, it has the capacity of encouraging greater selfawareness and fostering desires, both powerful stimuli for professional development.

What millennials are also expressing is a call for access to a multiplicity of small on-the-job exercises early on in their education (ideally during the midsecondary school period) to confront their dreams with the reality of different professions and working environments. their words testify to a deep interest in pairing school and work: “Work made me like school!” as a method, the personal diary or “learning journal” can be commended as a means of making the most of day-to-day experience in the continuing process of growing up.

the millennials who used them benefitted from the distance that the collection and formalisation involved In the young people’s diary entries we find a highly in writing up situations or significant moments offered mature approach that involves seeking self-fulfilment them at a time of important personal change. In this by, first of all, identifying deep-seated desires and then digital age, this long-standing, tried-and-trusted approach gives surprisingly good results even if giving these a place in their lives even though they it sometimes requires overcoming a certain initial also recognise that material constraints have to be degree of resistance. taken into account (they, too, need to earn a living).

Despite what some say, these young people are this generation is less susceptible to being remotely quite ready to get involved, even to a very high controlled than its predecessors. Perhaps this is degree, in their work. they have fully understood because the millennials have had more training, the constraints of working: “In your firm, it’s are better informed than the preceding “Generation like at school, except that instead of having good X” and, undoubtedly, because they are much more grades, you have satisfied customers”. focused on their own personal development.

We are far from “become who you are.”

In an educational setting, might it not be interesting to get these “youngsters” to work on their identity?

It is possible to bring people to become more aware of the professional environments that resonate with their own personalities. this can be achieved by exploring those past experiences – a person’s inner resources – that contribute to making up an individual’s identity.

they have also taken on the need to be obedient: “In the course of my work, I’ve been forced to realise that if the boss says I’m wrong then I’m wrong, even if I’m right...”

What really characterises them is the desire for relationships with work and with their manager based on a “just” exchange: “the boss has been able to check that I’m competent and right for him; this approach, which is not in the cultural tradition and on my side I’ve been able to check that the in France, is little developed as yet. nonetheless, job and the work-environment are right for me”.

Integrating Generation Y into the workforce by Sylvie Deffayet and Anne Dhoquois

they will accordingly do all that they can to choose a healthy and exemplary authority figure: “I wasn’t wrong in asking for a change of departments as I’ve now got a super boss. no mistake: she knows how to manage a team and doesn’t follow willy-nilly orders from above. she’s flexible in the way she manages”. this also means that the expectations of the employer are high. the employer must first provide a learning environment, stimulate career progression and develop staff members’ employability, demands which come well before that of addressing the employee’s salary wants.

In their first job, young people have to face up to their personal limits, test their capacity for selfassertion, dare things, seek out information and sometimes to say “no” in cases where they are obviously being exploited: “I walked out after two days. If I’m doing the same work as everyone else there’s no reason that I shouldn’t be paid the same wage. It’s fine having to clock up experience but you also have to live decently.” the millennials have a greater ability to say “I can’t do that” or “I don’t want to work under these conditions” than their predecessors. they are more aware of their own limits, whether in terms of competency or from an ethical standpoint and do not hesitate to say what is or is not acceptable to them.

63 EFMD Global Focus | Volume 05 | Issue 02 2011

Is an employer aware of this on hiring a young staff member? Do educators prepare young people sufficiently to live and to learn from these intense moments?

We should remember that you make the most of such situations if you have the possibility of sharing or revisiting the experience. the space and occasion to step back and review should be available, most probably in different ways, in both education and at work.

Generation Y invites us to open the dialogue between these two environments and to create the conditions for mutual learning to take place.

In their first job, young people have to face up to their personal limits, test their capacity for self-assertion, dare things, seek out information and sometimes to say 'no'

this does not mean that they are rebels but rather staff members who will constructively challenge their manager and, through him or her, the rest of the organisation, the condition for this being that their attitude is correctly interpreted by their bosses and not misconstrued as a rejection. the first job provides a young person with a picture of his or her personal worth. this is essentially ABOUT THE AUTHORS a place to learn, or of “hyper” learning, since it is Sylvie Deffayet is Professor of Management and Head of the Chair of at this moment that young adults will reappraise Leadership and Managerial Competencies, EDHEC Business School, all of their beliefs about themselves and the France. Anne Dhoquois is a freelance writer based in France. outside world.

64 www.efmd.org/globalfocus

Why MBAs and SMEs should get together

Valérie Claude-Gaudillat argues that, contrary to general misconceptions, MBA graduates can find satisfying jobs within small companies –and contribute significantly to their success For many, an MBA stands for Master of Business Administration during the programme and for McKinsey, Bain and Accenture once the job search begins.

Business schools, rankings, and students and alumni themselves make so much of return on investment and high-flying careers that it seems to be a truth universally acknowledged that an MBA naturally leads to a post with a company listed on the Dow Jones, the FTSE or another major stock exchange.

There is a case to be argued for SMEs being the best possible fit for an MBA graduate or alumnus

In such a context, an MBA graduate who accepts an offer from a small or mediumsized enterprise (SME) is likely to be viewed as an eccentric or as someone whose MBA has not been a success. Worse still, they may be regarded as a person lacking the right amount of ambition.

SMEs are by nature smaller than the usual employers linked to MBAs and are more likely to evolve in sectors where managers get their hands dirty and are not household names.

However, there is a case to be argued for SMEs being the best possible fit for an MBA graduate or alumnus.

Maybe it is time that this particular “truth” about MBA careers was disputed a little.

ABOUT THE AUTHOR

Valérie Claude-Gaudillat is MBA director at Audencia Nantes School of Management in Natntes, France.

François Gougeon is head of human resources at AES Laboratoire Group, a French microbiological firm of around 500 employees.

A classic, high-quality MBA is a general management programme designed to equip participants with all the skills needed to run a business. While the structure of MBA programmes rests on specific subjects such as finance, strategy and leadership, the overall logic is to meld these blocks

of knowledge together to form a true managerial profile.

In the vast majority of cases, MBA programmes shy away from too much specialisation, preferring instead to focus on a well-rounded education.

This stress on a global approach to high-level management does not always find an echo at the bigger employers. While a large company can offer a vast range of posts these are often limited to one specific function that is particularly well suited to junior MBA graduates.

In this way, alumni become directors of marketing, purchasing or perhaps human resources. Few within a multinational will start their post-MBA career in a general management position.

The same is not true within SMEs, where the simple question of size alone makes a high-level position all encompassing. That is not to say that MBA alumni cannot function in classic department-specific roles but SMEs provide the opportunity to put all these skills and more together in one management role.

In addition, in the western world in particular, the jobs currently being created at management level are seldom at companies that are household names.

Today, it is the smaller companies that are looking to find the right people to transform them into firms capable of being competitive in an evermore international business world.

It is no longer the case that only employers

Why MBAs and SMEs should get together by Valérie Claude-Gaudillat

65 EFMD Global Focus | Volume 05 | Issue 02 2011

A manager with an MBA background can offer the sort of long-term vision more common among larger groups allied to the latest management knowledge. Most smaller firms do not have the time or resources to do this

When SMEs think of MBAs, one widely accepted idea tends to put them off. The worry is that the sorts of theories taught on an MBA programme can only really be applied to larger companies.

If this is the case, there is little to be gained from an SME employing a manager with an MBA. However, we have found the opposite to be true.

with a massive international presence can offer international careers.

salary, particularly, is one aspect that can and does very easily frighten off smes.

smes are increasingly looking to expand beyond their borders and do not always have the right management team to make such a change. this is where mBa graduates could answer a need while also finding a very satisfying career where they may never have looked in the past.

In terms of cost, there is no denying that an mBa added to a CV means higher wage expectations. however, this needs to be weighed against the far-reaching leadership and strategic common sense that such a manager can add to a more compact company.

If there exists a level of misconception among mBa graduates and students concerning smes, there is also a general misunderstanding of mBas by smes themselves.

the extra value that can be brought by an mBa graduate or alumnus is potentially huge.

the smaller companies that seem ideally suited to the general management profiles coming out of mBa programmes also play an often subconscious role in keeping the notion alive that no holder of an mBa would want to work in anything less than a multinational.

Where the recruitment of mBa graduates is concerned there seems to be a large dose of self-censorship at work.

It appears that for many smes an mBa graduate risks being more trouble than he or she may be worth. the image is likely to be one of a very handsomely paid manager with bags of self-confidence and extremely high standards. such a mix would be seen as an explosive one by most smaller companies.

Quite simply, they seem to feel that the cost and culture shock involved in drafting in someone with an mBa would create a host of problems.

Generally, smes do not have the time to lift up their collective heads from the work in progress to take in a wider view of things. a manager with an mBa background can offer the sort of long-term vision more common among larger groups allied to the latest management knowledge. most smaller firms do not have the time or resources to do this. as the globalisation of markets, manpower and production sees smes increasingly in competition with bigger companies as well as those active in more distant markets, this sort of 360° approach can make all the difference.

In short, the competitive rules for smes are becoming much like those for larger firms. this being the case, they need to play by those same rules and it is here that mBa graduates can help.

While larger recruiters and mBas will always sit well together perhaps the moment has come for both smes and mBas to recognise that they could in fact be made for each other.

Our sales manager was keen to undertake an executive MBA and thanks to help from various training funds we were able to cover the cost of enrolling him at Audencia. Since the programme was part-time he continued working for us during the MBA, which allowed us to see the effect the teaching was having week by week.

Very quickly, we noticed that he wanted to apply what he was learning. This led to rapid changes for the better in the fields of HR and marketing, especially where market analysis was concerned.

We all saw the difference the programme was having on our colleague, which created a knock-on effect. The success of this first student got other managers within the firm interested and we enrolled a second person on Audencia’s executive MBA. The level of investment and the time required to study an MBA may frighten off many SMEs, but they need to be more open-minded. The atmosphere just one MBA graduate creates within a company can be a big plus for all the staff.

François Gougeon

66 www.efmd.org/globalfocus

4,300 Last year 4,300 students took part forming 1,800 teams from 45 countries

60 The competition was supported by more than 60 companies ranging from SMEs to large multinationals

Global Marketing Competition

EFMD and ESIC Business & Marketing School in Madrid, Spain, in collaboration with Banco Santander, AACSB, CLADEA and UNIVERSIA, are running the current edition of the Global Marketing Competition. This is an international free-to-enter university competition in which students from all over the world test their knowledge and skills by using a leading business simulator.

Students will have to take into account many variables in order to make business decisions, running, in theory, a company that belongs to the automobile sector and managing all the areas of this virtual firm.

It is an extraordinary platform against which participants can measure their capabilities and it contributes to encouraging students to apply theoretical knowledge and teamwork. It also offers a global perspective of companies in a real world of business decisions, providing increased professional self-confidence.

In the final stages, the six best teams will travel to Madrid to compete in order to win awards including cash prizes and a masters programme at ESIC Business and Marketing School.

ESIC and EFMD together with several institutions are running the 2011 world edition of the Global Marketing Competition.

Rafael Ortega de la Poza explains what the competition provides for students and others

Although students are the main participants in the competition, other groups such as academic staff, professionals and institutions are interested in this initiative.

For example, professors can encourage their students to take part and sign up as their tutor and have at their disposal a test laboratory that will allow them to prepare themselves and be tested in key subjects applicable to the real business world.

Additionally, staff from the human resources departments of Spanish firms can follow the performance of their employees, since corporate professionals can also participate in the competition.

67 EFMD Global Focus | Volume 05 | Issue 02 2011

Global Marketing Competition by Rafael Ortega de la Poza

One of our missions is to train professionals who are capable of setting up companies and organisations and working within them. We aim to train students for management positions on an international scale with the necessary skills to work in all areas of managerial activity.

We want to spread ethical and rational values in business, opening links between academic activity and business environments, and promoting the business vocations of our undergraduate, postgraduate and executive education students.

ESIC is committed to its ethical values and this is evident through the continuation of its actions in all areas where it operates and by being a signatory academic institution of the Global Compact and of the Principles for Responsible Management Education promoted by the United Nations.

The current economic crisis has had an impact on academic disciplines and methodologies. What can a business school learn from this crisis?

The crisis had several causes.

One of them is that some mathematical models used to predict returns have failed because they do not work well in extreme market conditions. Over a period of time the market was wildly unstable.

Last year 4,300 students took part, forming 1,800 teams from 45 countries. The competition was supported by more than 60 companies, ranging from small and medium enterprises to large multinational firms.

Some claim the financial crisis was caused by a misalignment of interests between banks´ executives, interested in shortterm gains, and shareholders oriented to long-term goals.

New technologies are having a direct impact on our lifestyles and the way companies are managed. It is of paramount importance that organisations understand and adapt to these structural changes if they want to survive in a competitive environment.

On the other hand, most economic crises, including the current one which started in July 2007 when a liquidity crisis emerged, have in common unethical personal behaviour, based on the excessive greed of some top managers who create situations of economic recession with their risky decisions.

ESIC strives to offer high-quality teaching that is constantly developing advanced technological initiatives. The school has been offering master programmes for roughly 30 years and their content is improved each year by teachers and business professionals who provide new insights to adapt the programmes to new management trends and modern academic technologies.

One of ESIC´s characteristics is the use of simulators as a means of teaching. This advanced software tool, used in several master programmes, allows students to make decisions similar to those made in the real business world.

Our understanding of training involves the passing on of knowledge of business realities, combining rigorous academic theory with practical and updated programmes that give our students a clear advantage when competing to become top professionals.

ESIC encourages scientific and technical investigations in the areas of marketing and business administration. This promotes business projects and provides students and external professionals with studies and research in both national and international environments.

Professors can study why the downturn happened and teach their findings to their students and, even more, they can focus on coming up with original ideas in order to mitigate the effects of this crisis.

An interesting subject of study is financial regulation, taking into account that the more complex regulation is then the more difficult is supervision. Regulators must have appropriate means to convey understandable financial information to investors and to carry out the task of supervision effectively.

It is very important that students perceive their professor as an upright individual, not necessarily because he or she teaches disciplines related to ethical behaviour but because he or she must convey that image in whatever field is taught.

ABOUT THE AUTHOR

Dr Rafael Ortega de la Poza is Dean of ESIC Business & Marketing School, Madrid, Spain.

68 www.efmd.org/globalfocus

EFMD 2011 | www.efmd.org/conferences

Upcoming events June 2011

October 2011

Learning Business Partner seminar

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15 June /Brussels, Belgium

2011 EFMD Conference on Undergraduate Management Education

11 October / Brussels, Belgium

1-3 November / Bellville, South Africa

15 November / Brussels, Belgium

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Creating an Effective Marketing & Sales Process in Business Schools

What’s new in Corporate Responsibility and Sustainability?

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The Business School in Africa as an Agent for Sustainable Business and Social Development

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Competition and Cooperation between Europe and China

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2011 EFMD Executive Education Meeting

University of Stellenbosch Business School

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The Evolving Role and Impact of L&D Organisations in Business Transformation HOST

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Why do we need doctoral programmes? accreditation, portfolio and business models HOST

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Corvinus University of Budapest, Hungary Sharing Best Practice CLIP Workshop Dates / Venue

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6 December / Brussels, Belgium

Challenges and Opportunities in the New MENA Region

Embedding Corporate Connections into Business Schools Activities. An accreditation perspective

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ESCA – Ecole de Management

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They make sense only as means to a social end.

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Volume 05 | Issue 02 2011

EFMD Global Focus Volume 05 | Issue 02 2011

Email: info@efmd.org

“For more than 30 years, IE Business School has been a leader in management education and is recognised as one of the top business schools in the world. At IE, we believe that providing an exceptional learning experience is key to meeting the demands of both students and business.

Phone: +32 2 629 08 10 Fax: +32 2 629 08 11

Dean David Bach on selecting the best students

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DAVID BACH, DEAN OF PROGRAMMES, IE BUSINESS SCHOOL

The man who never stopped Andrzej Kozminski, founder and head of Kozminski University, one of Central and Eastern Europe’s foremost business schools, on his life and achievements

IE trains entrepreneurial leaders that promote innovation in organisations. Our graduates are exceptional people with exceptional skills and are in great demand by companies the world over.

That’s why we use the GMAT exam. It’s a powerful tool to help ensure that IE selects the right students for our rigorous programmes. The GMAT exam helps our admissions staff assess whether candidates have the skills we require and the corporate world requires too. At IE, we want students to excel in all aspects of our programmes and the GMAT exam is an important tool in helping select the best students with the greatest potential.”

To learn more about the GMAT exam and the products and services it makes possible, visit gmac.com/efmd INSIDE THIS ISSUE 2011 Graduate Management Admission Council© (GMAC©). All rights reserved. The GMAT© logo is a trademark and GMAC©, GMAT© and Graduate Management Admission Test© are registered trademarks of the Graduate Management Admission Council in the United States and other countries.

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