The Magazine for alumni of Cranfield School of Management
Out of AFRICA Andy Baker (MBA 2005) on why Africa is an exciting place to be right now...
PLUS... A taste of Cranfield Mindful meetings Flourishing through diversification Roads to resilience Deal or no deal
Issue 4 // Spring 2014
g min r o f s e Tran wledg n kno actio into
Saturday 8 November
Calling the classes of 1969, 1974, 1979, 1984, 1989, 1994, 1999, 2004 and 2009... This is your reunion year. We are delighted to invite you back to Cranfield to celebrate the anniversary of your Cranfield experience. This is a wonderful opportunity for you to reconnect with your classmates and reflect together on the impact that Cranfield has had on your life. We are working on an exciting and special programme and we look forward to welcoming you back in November for a wonderful day of celebration, fun and learning updates.
For further information please visit: www.alumni.som.cranfield.ac.uk or contact: firstname.lastname@example.org / +44(0) 1234 754439
24 04 06 12 20 24
Under construction A taste of Cranfield News International focus Out of Africa
Andy Baker (MBA 2005) Dr Andrey Pavlov and Dr Jutta Tobias
Flourishing through transformation John Murphy (BGP 2011)
Roads to resilience Professor Keith Goffin, Professor Marek Szwejczewski and Dr Elmar Kutsch
Deal or no deal? Mark Russell (MBA 1987)
Produced, edited and published by: Alumni Relations and Development Office, Cranfield University, Cranfield, Bedfordshire MK43 0AL UK t: +44 (0)1234 754456 | e: email@example.com | w: www.alumni.som.cranfield.ac.uk Digital versions of Alumni Focus are available via the alumni website. If you would like to unsubscribe from receiving future issues please contact us. ‘Mindful meeting’,‘Roads to resilience’ and ‘Deal or no deal?’ originally appeared in the Spring 2014 issue of the School’s thought leadership magazine, Management Focus. No part of this publication may be reproduced or stored in any form whatsoever without the prior written consent of Cranfield School of Management. The views expressed herein are not necessarily the opinion of Cranfield School of Management. Whilst every care has been taken in the production of this magazine, the publisher cannot be held responsible for the accuracy of the information contained herein. © 2013 Cranfield University. All rights reserved.
Under CONSTRUCTION Since the new Chief Executive and Vice-Chancellor tasked the Alumni Relations and Development team with extending the successful School of Management alumni relations model to other Schools across the University, we have been busy learning, strategising and planning. Benedicta Morrow-Slason, Director of Alumni Relations and Development explains...
ver the last few months, members of the Alumni Relations and Development team have spent time at Cranfield Defence and Security, the School of Applied Sciences and the School of Engineering, learning more about their activities and how we can increase engagement with alumni from other areas of the University.
Our vision is to create a new Alumni Relations and Development function providing a range of pan-University activities, alongside more focused activities that will resonate with distinct alumni groups from different Schools, sectors or regions. In the autumn, we will be launching a new modular alumni web portal with a customisable home page displaying content which is most relevant and interesting to you. Some of you may wish to only see information that is relevant to the School of Management and your programme or sector, but some of you may also welcome the opportunity to receive information that is generated from other areas of Cranfield, such as engineering, aerospace, automotive, manufacturing or the environment. You will still have
â€œBy joining alumni activities across the University we will be able to create an even stronger, more vibrant network.â€?
access to a searchable online directory but you will also be able to access alumni from other schools if you wish to do so. We are also looking into new technology that will allow us to create more bespoke communications based on your interests. Once weâ€™ve got the basics in place, we hope to launch a new alumni app to increase the usefulness of the portal when you are on the go. As you will know, we offer an extensive range of events for alumni and we are looking to see where these can be expanded to include alumni from across the University. The Alumni Symposium on 7 November will be a great example of how we can harness faculty and alumni expertise from a variety of different perspectives around a common theme for a dynamic day of learning, that will include alumni from across the Schools. There will also be events that are open to you, which may be led by faculty in other schools, such as the Manufacturing event on 20/21 May. We have also been linking School of Management international communities to create more robust networks overseas and many successful international events have already taken place. We believe that the whole is greater than the sum of its parts and that by joining alumni activities across the University we will be able to create an even stronger and more vibrant alumni network, spanning all corners of the globe. We hope that you will benefit from greater access to alumni and faculty from other Schools and that you will help us to demonstrate to other alumni outside of the School of Management the benefits of maintaining a relationship with University and remaining involved with the alumni network, the largest and most influential constituency within the Cranfield community.
s a Cranfield alumnus, your affiliation with the University can reach far beyond the School of Management and give you the attractive benefit of being connected with an influential institution with a global reputation in technology and engineering.
While you will be aware of our international sway in leadership, entrepreneurship and management, you may not realise the amazing breadth of our teaching, research and corporate partnerships in other areas, encompassing aerospace, automotive, defence and security, energy, environment, health and manufacturing. What follows is a flavour of the types of research and projects we conduct throughout the University, and some examples of our global impact - from disease prevention to flooding, and from military armour testing to detecting life on Mars.
A taste of Cranfield
A LITTLE BIT ABOUT OUR HISTORY We have been here since 1946, when the College of Aeronautics was formed, based at the RAF station in Cranfield. Through the 1950s and 1960s, the development of many aspects of aircraft research and design led to diversification into other technologies, manufacturing and management. In 1969, the College of Aeronautics became The Cranfield Institute of Technology incorporated by Royal Charter with full degree-awarding powers, and new departments were set up to cover work in the new subject areas, such as the Cranfield School of Management, which was established in 1967. The last thirty years have seen substantial progress, including an academic partnership with the Defence Academy, UK, at Shrivenham in Wiltshire. The result is that Cranfield has grown to become the largest centre for applied research, development and design in Europe. Our impressive facilities include a fully-functional airfield, precision machining laboratories, FIA approved crash-testing equipment, one of the best equipped multi-phase flow rigs in the UK, the largest icing wind tunnel in the UK, a cabin evacuation simulator, a £1m flight deck simulator, an off-road dynamics facility which enables the study of how machines interact with different surfaces, and technologies for carbon capture research.
DID YOU KNOW? • Our annual turnover is £162 million • We are one of the UK’s top five research-intensive universities • We work with over 750 businesses in 40 countries across six continents • Each year we teach 4,430 postgraduate and 760 doctoral learners coming from over 110 countries in the world • We graduate over 75% of the UK’s postgraduate aerospace engineers • 50% of our learners study part-time while in employment • We have the largest concentration of soil and water scientists in Europe • We have trained 20,000 CPD delegates on our highly respected short courses and executive programmes • Our alumni community comprises over 55,000 graduates across the globe - an amazing network of talented individuals and groups for you to connect with.
WHAT DO WE DO? We have global impact The impact of Cranfield’s research reaches right across the entire world. We are pioneering new approaches for the generation and sustainable use of energy, harnessing renewable sources such as solar, wind, tidal and wave to create environmentally sustainable energy supplies. We are demonstrating at near-industrial scale the role that alternative fuels, such as domestic waste, biomass and sewage sludge, can play in improving the carbon footprints of power plants. From low cost thin-film photovoltaics and hydrogen fuel cells, to algae-based biofuels and novel wind turbines, we are working with our corporate partners on short-timescale, industry-leading programmes to meet the UK’s 2020 renewables target. An area in which we making a significant contribution is the reduction of food waste, informing better land management, supporting sustainability of food production, novel transportation and storage of foodstuffs. Elsewhere, Cranfield is improving the safety and transportation of the water we drink. We are the largest academic centre for water science research and education in Europe, developing technologies which ensure the safe treatment and distribution of quality potable water, and the effective treatment of waste. We also work to embed local capacity in nations across the globe, enabling them to safely manage the consequences of natural disasters such as flood, famine and earthquakes.
We assist the MOD Cranfield’s partnership with the UK’s Ministry of Defence enables us to make a real difference to the lives of military personnel and civilians around the world. Our research in defence and security ranges from combatting cybercrime to wargaming, and from explosives safety to forensic archaeology. At our Shrivenham campus we have facilities ranging from a munitions range to forensic laboratories. Our Impact and Armour Group is a Home Office approved test house for stab and ballistic body armour. Body armour is now standard equipment for police and armed forces around the world. Military armour typically provides protection against bullets and shell fragments whilst police armour should provide protection against bullets and knives. The Impact and Armour Group has played a leading role in the development of knife resistance systems and test methods.
A taste of Cranfield
We save the aviation industry money Within our High Temperature Coatings facility - one of a kind in any European university - we design, test and analyse coating systems for components subjected to extreme high temperatures in hostile environments, such as airbourne aircraft engines. The Centre, which owns commercial standard coating production equipment, was opened by the Duke of Kent in 2005. Our research focuses around the design and manufacture of protective coatings to allow engineering systems to operate in demanding environments, the development of smart coatings, and the design of surface engineering solutions. Our work in developing more efficient thermal barrier coatings on aircraft engines has now been implemented by Rolls-Royce on its Airbus A340-500, A360 and A330 aircraft. Reducing fuel consumption by 1% has led to a significant cost saving over an engineâ€™s lifetime.
We test vehicles in extreme conditions Our off-road-dynamic facility is the only centre of its type to study the relationship between machines and the soil environment in controlled, repeatable conditions. ÂŁ1.35 million has been invested in its design and development to meet the needs of those industries. Extreme off-road surface conditions such as loose, wind-blown sands, slippery clay surfaces and wet grass can severely limit vehicle performance, meaning key customers such Land Rover and Klaas turn to us for our deep knowledge and unique equipment, which includes a whole vehicle controlled moisture soil lane and bin, a single wheel test apparatus and a whole vehicle articulation rig. The facility is internationally respected and won the Ford European Technical Innovation Award.
We go to outer space The space industry is no longer just about sending astronauts to the moon. The environment, agriculture, mining, meteorology and communications are just some of the industries that have interests in how space systems and technology can be applied. Cranfield has been undertaking space studies since the 1960s. Our expertise in sensor technology, specifically the use of biosensors in extreme environments and for life detection on the planet Mars, has attracted much media attention. Our scientists are striving to expand our knowledge of the red planet and help generate applications for these technologies here at home to benefit society and the economy. We have around 500 alumni members across the world working in the space industry. Cranfield has been a leading partner in a significant consortium developing the Life Marker Chip (LMC), an instrument which was being developed to detect traces of the molecules of life in the Martian environment. The LMC concept was built around medical technology normally used to detect the presence of disease and infection. The LMC looks for biomarkers of life in liquid extracts from samples of Martian rock and soil. Currently Cranfield has teamed with Spanish led-consortium to propose a variant of the LMC for inclusion on the upcoming NASA Mars 2020 rover mission. Elsewhere an emerging class of shoebox-sized spacecraft called CubeSats or nano-satellites are transitioning from their initial role as educational tools to finding real-world applications in scientific and commercial sectors. Cranfield has a significant presence in this field and is building its first CubeSat spacecraft as part of the QB50 constellation of satellites due to launch in 2016.
We help solve healthcare issues At Cranfield, we directly respond to global concerns for health and wellbeing. We apply our expertise in biomedical science, engineering and management to the development of innovative technologies that help to maintain good health and prevent, diagnose, control and cure disease. By 2050 over 27% of the UK population will be aged 65 or over. People are living longer but often with chronic diseases such as diabetes and its complications. Our ageing population will make major demands on health services in the future. We actively investigate chronic diseases such as Alzheimerâ€™s, rheumatoid arthritis, cancer, fibrosis and diabetes, focusing on prevention, early diagnosis, treatment and control - both in the elderly and in younger populations where chronic diseases are becoming increasingly prevalent across the world.
A taste of Cranfield
We would like to work with you Cranfield is the UKâ€™s most business-engaged university. We work with a wide portfolio of partners from the smallest owner-managed SMEs to the largest multinational conglomerates, such as Airbus, BAE Systems, Civil Aviation Authority, Jaguar Land Rover, Rolls-Royce, Unilever, Yorkshire Water and government departments and agencies. Whether you have a small immediate challenge to overcome, or need a long-term business growth strategy, Cranfield can help you. We can be your conduit to the academic world, giving you access to the latest thinking and knowledge in technology and engineering. We offer a range of different solutions to suit your organisation, from a few hours consultancy on a specific challenge to a longer term research partnership. Our real-world approach to research offers substantial savings and an increase in efficiency for our clients in key sectors.
You can read about ways of partnering with us on our website: www.cranfield.ac.uk/business
QUEENâ€™S AWARDS Cranfield has been awarded the prestigious Queenâ€™s Anniversary Prize in Further and Higher Education on three occasions; in 2005 for its Fellowship in Manufacturing Management, in 2007 for its leading international role in humanitarian demining, and in 2011 for its world-leading work in aviation safety through research and training in air accident investigation.
Our humanitarian demining award The international community was first made aware of the threat from landmines in countries emerging from conflict in the early 1990s through the efforts of advocacy groups and their champions, such as the late Diana, Princess of Wales. Many countries are still not free from the physical and socio-economic threats that land mines pose. Since the end of World War II, more than 75 million land mines have been deployed, including more than 65 million since 1980. Over the past 15 years there has been a move away from countries depending on international demining organisations such as the UN and a push for countries to build their own resilient national capabilities. Cranfield has been at the vanguard of these developments, establishing a specialist group to address the management needs of humanitarian demining. Since then we have developed and delivered bespoke educational and training programmes to over 1,000 managers from 68 countries including Afghanistan, Angola, Cambodia and Iraq, highlighting our commitment to helping the international community solve real problems.
NEWS Awards evening The Cranfield School of Management Awards Evening took place in February at the Royal Society in London. Over 140 alumni and faculty came together to celebrate the achievements of this yearâ€™s award winners. The 2014 prizewinners included: 1. Entrepreneur Alumni of the Year: Go Ape Tristram Mayhew (BGP 2006), Chief Gorilla Jerome Mayhew (BGP 2010), Managing Director Rebecca Mayhew (BGP 2010), Communications Director Will Galbraith (BGP 2006), Operations Director 2. Alumni Service Award: Alex Chapman (MBA 1988), Co-Founder, Totally Optimized Projects 3. Alumni Service Award: David Thompson (MBA 1969), Alumni Volunteer, New Zealand 4. Excellence in Achievement for Recent Graduates: Andy Baker (MBA 2005), CEO, G4S Africa 5. Cranfield Leadership Prize: John Lacken (MBA 2013) 6. Henry Ford II Scholar Award: Jason Yiu (MBA 2013), Analyst, IMS Health 7. Odgers Prize: Emma Buckland (MBA 2013), EMEA Operations Director, FICO 8. The Spirit of Cranfield Prize: Andrew Harrison-Chinn (MBA 2013) and Emma Buckland (MBA 2013). Not pictured - Distinguished Alumnus of the Year: Mayank Patel (BGP 2001), Group Chairman and CEO, Azibo Group 1
New iTunes U course The Centre for Business Performance has launched a new course on iTunes U which provides an introduction to Performance Measurement, one of the crucial elements for running a business. The course introduces the principles and concepts of measuring business performance and gives practical insights into how performance measurement can be used in an organisation.
New Year’s honours for Cranfield alumni Our congratulations go to the following Cranfield alumni, who were recognised by the Queen in the New Year’s Honours list 2014:
• CBE for public service: Mandie Campbell (BLP 2006), Chief Operating Officer, UK Border Force, Home Office • CBE for services to the Technology Industry: Warren East (EMBA 1990), Lately Chief Executive, ARM Holdings • OBE for services to Technology and Innovation: Charles Matthews (EMBA 1983), Chairman, Axeon and Non-Executive Chairman and Founder, Sigma Quality Consultancy • CMG for services to the British Automotive Industry: Dr Andrew Charles Palmer (PhD 2003), Executive Vice-President, Nissan Motor Company Ltd, Japan • MBE for services to Equality in the Workplace: Lisa Pinney (RED 2012), Head, Strategic Co-ordination, Environment Agency • MBE for services to the Fruit and Vegetable Industry: Marion Regan (BGP 2006), Owner, Hugh Lowe Farms.
Cranfield grows its masters portfolio
The School has launched two new specialist masters programmes that will start in September 2014. Full-time MSc in Investment Management This new programme is designed for those who want to launch a career in the highly competitive investment industry. Course Director, Professor Sunil Poshakwale said: “Students will learn the skills and knowledge needed to succeed in the investment industry and will also have the opportunity to work on an industry sponsored project in the final term of the programme. They will learn about doing business in the world’s major financial hubs from experts who have worked across the globe.” Full-time MSc in Management and Corporate Sustainability This programme will offer a range of general management modules in conjunction with specialist modules on corporate sustainability. Course Director, Dr Andrew Angus said: “Today, organisations that want to achieve long-term success must consider what is known as the triple bottom line: economic, environmental and social performance. Our new programme examines the social, ethical and environmental issues faced by organisations and will equip managers with the theories, tools and techniques to embed sustainability thinking into their organisations.”
How to avoid a crisis Companies that create a culture of resilience throughout their organisation can avoid potential crisis and are likely to be more successful in the long term, according to new research by Cranfield and Airmic, the association for risk management. In the ‘Roads to Resilience’ report, the Cranfield authors urge boards and business leaders to challenge their current attitudes towards risk management and recognise that it should be a strategic priority and not just an operational or compliance issue. Commenting on the findings, report co-author Professor Keith Goffin said: “All industries are now facing unprecedented levels of risk that have real potential for harming their reputations and balance sheets. By bringing together the insights and experiences of those who have succeeded, this report challenges businesses to take the necessary actions to achieve resilience.” Read more about this research in the authors’ article on page 34.
Dan interviewed for Farming Today
Dramatic career change for Jannie
Senior appointment for Gabriel
British farmer Dan Powell (MODMBA 2009) was interviewed for BBC Radio 4’s Farming Today programme.
Alumnus Jannie Retief has made a dramatic career change, going from working in the wine industry to becoming the CEO of Cookhouse, Africa’s largest wind farm.
Gabriel Morelli (MBA 2000 and DBA 2010) has been appointed President of South Europe and Middle East by global health information, services and technology company, IMS Health.
Jannie is now at the helm of large renewable energy plants including wind, wave, landfill gas, solar and gasification technologies.
Gabriel has 20 years of experience in the pharmaceutical market, previously working for ZS Associates and PriceWaterhouseCoopers.
He spoke about why he decided to study the Cranfield MBA and how he applied what he learnt on his family farm. Dan is a partner of Hartley Farms, a family business located in the Cotswolds.
Top marks The School has been ranked 10th in the Forbes ranking of the best business schools in the world, outside of the US. Every two years, Forbes ranks the world’s business schools based on their return on investment (ROI).
Cranfield BGP alumni production nominated for an Oscar Room on the Broom, a production by Magic Light Pictures, owned and run by Michael Rose (BGP 2012) and Martin Pope (BGP 2012), was nominated for Best Short Animated Film in the 2014 Oscars. Michael and Martin set up Magic Light Pictures in 2003 and since 2007 have been involved with the successful work of writer Julia Donaldson and illustrator Axel Scheffler. Room on the Broom, the film of the best-selling picture book, was aired in 2012 to 7.6 million viewers; and has since been released in cinemas in France; as well as on DVD in UK and USA. This latest nomination is the third in four years for Magic Light Pictures, after both The Gruffalo and the animated feature, Chico and Rita, were previously nominated at the Oscars.
Review of the UK motorsport industry Professor Mark Jenkins played a key role in a recent study commissioned by the Motorsport Industry Association (MIA), which revealed that the motorsport sector achieved sales of £9 billion in 2012, making it one of the most crucial contributors to the UK economy. The study, which was supported by UK Trade and Investment (UKTI) and the Department for Business Innovation and Skills (BIS), revealed that there are now 4,300 businesses in the UK that owe their existence to motorsport, accounting for nearly 41,000 jobs. Professor Mark Jenkins commented: “This study underlines that the UK is a global leader in this specialist area. It has demonstrated strong growth since 2009, and provides a unique capability that is adding value in areas such as low carbon technologies and sectors such as automotive, aerospace and defence.”
Welcoming back alumni from around the globe We were delighted to welcome over 300 alumni from all over the world back to the Cranfield campus from 17-19 October 2013, for our Alumni Volunteer Day, Alumni Symposium and Alumni Reunion. Beginning with Volunteer Day, alumni board members, international volunteers and year representatives returned to share ideas and best practice with each other. The Alumni Weekend then kicked off on Friday with the Alumni Symposium which focused on ‘Managing in the Digital Age’. Through keynote speeches, panel sessions and networking, alumni were able to discuss the opportunities and risks technology is bringing to business. The three-day event culminated in a black tie gala dinner as part of the alumni reunion with alumni from the ‘3s and ‘8s returning for their reunion.
Leading provider of supply chain talent Global supply chain professionals have ranked Cranfield among the world’s top universities for producing supply chain talent. In the latest SCM World Chief Supply Chain Officer Survey, Cranfield is ranked 7th in the world and 1st in Europe among universities that teach supply chain management. SEPTEMBER 2013
THE CHIEF SUPPLY CHAIN OFFICER REPORT 2013 PULSE OF THE PROFESSION
The research conducted by SCM World asked senior global supply chain and procurement professionals to list the top three schools they considered to be leading providers of talented supply chain management graduates.
Increase in international alumni activity We are delighted with the increased activity within our international communities over the past few months. Faculty have been welcomed across the world to give lectures, have dinner and meet with alumni. The Riyadh alumni hosted Dr Essam Shehab for their first alumni dinner and networking event which took place on 12 January 2014 at the Madarim Crown Hotel. In Moscow, alumni welcomed Dr Andrey Pavlov to speak on “Measurement Madness: Recognizing and Dealing with Dysfunctional Consequences of Performance Measurement” in February and a dinner was hosted in China in conjunction with a visit by Paul Morton to the alumni committee in Shanghai. You can find out more about our international activity by contacting Isobel Kettle (firstname.lastname@example.org).
UK marketers are overlooking growth markets UK marketing leaders are being left behind when it comes to expanding into new markets, according to Cranfield’s annual marketing leaders’ survey. The 2014 results revealed a lack of focus among UK marketers on innovation and rapidly growing economies. Dr Stan Maklan, Director of the Marketing Directors Programme at Cranfield said: “Across the marketing profession there is great emphasis being placed on new media and technology. I am concerned that marketing’s framework has become overly media centric, particularly in the UK, where we are seeing a lack of focus from the marketing profession on expanding in the BRIC and ‘Next 11’ economies and breakthrough innovations.”
Looking for Cranfield gifts and memorabilia?
Hold your event at Cranfield University campus
Alumni can now browse and purchase a wide range of university memorabilia and clothing from our online shop: shop.mycsa.org.uk. Choose from a range of polo shirts, rugby shirts, hoodies, gilets and accessories. Don’t forget to check out our gifts and memorabilia which include mugs, paperweights and glassware.
Did you know that the Cranfield offers an impressive range of venues and accommodation for your events? Alumni benefit from a 10% discount on conference bookings and a 10% commission if you recommend Cranfield when quoting ALUMNUS1. Visit our website www.cranfield.ac.uk/conferences to find out more.
Sustainability through economic, social and environmental lenses
Friday 7 November
Our annual alumni Symposium this year focuses on the hot topic of sustainability. We will be examining some of the global megatrends, looking at the impact of sustainability on industry and learning more about Cranfield's groundbreaking work in this area... For further information on the 2014 Symposium please visit: www.alumni.som.cranfield.ac.uk or contact: email@example.com / +44(0) 1234 754439
International community profile: What are the aims/objectives of the international community? Our biggest goal for the next couple of years is to increase awareness of the Cranfield brand in the United States. We feel that the Cranfield School of Management deserves as much, if not more, praise and popularity as the Oxford and London Business Schools. We also want to provide the opportunity for all Cranfield alumni living in or travelling to the US, and in particular the New York City metro area, to network, socialise and meet with prospective students and key stakeholders. When did you start the community? The community has operated informally for many years thanks to Vijay Aluwalia and Alan Morley, however, now that we have a core dedicated group in the area, we are steadfastly working on creating a formal alumni association. Who are the key contacts? The key contacts are Vijay Aluwalia, Alan Morley and Sylvie Lekarakos, who all live in the New York City metro area. What is your biggest achievement since starting the group? So far we have done well in capitalising on faculty and staff visits to New York City. We have made a point to meet anyone visiting for dinner and drinks and great conversation. As a result, we believe it is vital to keep the ties with Cranfield strong and facilitating the exciting events we have planned for the future. We also helped to connect and organise company visits for the last IBE group that came to New York City. What is next for the alumni community? Our next event is quite exciting! We have managed to secure Antony Jenkins, the Group Chief Executive Officer of Barclays and fellow Cranfield SOM alumni, to speak in NYC to alumni, prospective students and other key stakeholders in the coming months. The event is scheduled for 15 July and will be hosted at the Princeton/Columbia Club in NYC. We hope to use this event to raise Cranfieldâ€™s profile, network with alumni and attract prospective students. Antony spoke to the alumni here in NY back in 1998 so we are excited to hear him again, having seen his rise to the top in the banking world. How can alumni stay in touch? Do you have a group on social media? The best way to reach out to us currently is through the Cranfield Alumni group on Linkedin or by direct email. Additional social media channels are in the works. What is the best part of being an alumni volunteer? Firstly, socialising with fellow alumni on a regular basis is a big plus. Itâ€™s great to keep in touch with each other and with Cranfield faculty and staff. Also the experience of raising the profile of an excellent program such as Cranfield in the US through various events and efforts and helping to bring more American students into the program is quite rewarding. As a first step, we would like anyone who knows fellow alumni in the US North East to promote the Antony Jenkins speaking event. If so, please send us their contact details so that we can be sure the invitation for the event is sent to them.
If you would like to attend the Cranfield New York Alumni Event with guest speaker Antony Jenkins (MBA 1988), CEO of Barclays PLC (Tuesday 15 July, Princeton/Columbia Club, 15 W 43rd St, NYC, NY 10036)
please contact: firstname.lastname@example.org or call +44(0) 1234 754324
e id w rld o W WAC WEEK Alumni n tio CelebraJUN E 2014 7 - 15
In celebration of our amazing international community, we present WAC Week. Seven days of gathering, networking and celebration at venues all over the world...
SPREAD THE WORD! #cranfieldWAC
WORLDWIDE AMALGAMATED COMMUNITIES... WORKING ACROSS CONTINENTS... WARM ASSOCIATED CONNECTIONS... WIDESPREAD L... ALUMNI CONVERGENCE... WEEKLONG ALL-INCLUSIVE CARNIVA WE ARE CRANFIELD... WORLDWIDE ALUMNI CELEBRATION...
Leadership Programme Client: Kuehne & Nagel A 5-day programme during which regional cohorts enhance their strategy and finance capabilities while working on a real-life strategic challenge set by their regional head.
Shell Project Academy Client: Royal Dutch Shell Cranfield is one of four University partners in the Shell Project Academy - providing face-to-face and online programmes in Project and Programme Management.
Personal Leadership Programme Client: Saudi Basic Industries Corporation (SABIC) Developing leaders in strategy, continuous improvement, diversity and leadership.
International Management Programme Client: Henkel Developing high-potential managers in the strategic and financial skills they need for senior management roles.
Executive Project Management Programme Client: Swiss Re Working with senior managers to improve project performance.
International FOCUS Cranfield works with many of the worldâ€™s leading organisations every year to transform individual and organisational performance through executive development. Programmes blend face-to-face sessions with online learning, project work and individual coaching to ensure that new thinking is swiftly transferred into improved performance in the workplace. This approach provides the flexibility sought by organisations with dispersed management populations, often operating in virtual teams across multiple time zones. Here are just a few of our international in-company programmes that have run in the last six months.
LEAD Programme Client: UNFPA Building strategic leadership capability through leadership development that supports immediate application in practice as participants work on tangible personal objectives throughout the programme.
MSc in Business & Strategic Leadership Client: South African Airways A customised masters that enables individuals to apply learning in their organisational role. Delivery blends expertise from the School of Management and Cranfieldâ€™s Air Transport Department with face-to-face and virtual learning.
Business Leadership for Upstream Client: TOTAL A personal and business leadership programme for Total’s high-potential senior managers blending virtual learning and an intensive residential module.
Kairos Programme Client: Innovation Group The third cohort of high-potential managers from the Innovation Group are currently participating in this award-winning global development programme.
International focus Effective Warehouse Practices Client: DHL Working with DHL’s senior warehouse managers to identify and implement efficiencies by understanding, reviewing and sharing best practices in the management and operations of warehouse sites.
Aspire Programme Client: Serco Middle East A change management programme for Serco’s talented future leaders.
Driveline Leadership Programme Client: GKN Driveline
Assistant General Managers Leadership Development Programme
A global development programme for GKN Driveline’s high potential managers, developing business acumen, leadership, marketing and change management skills. The programme has been running since 2007.
Client: TM (Telekom Malaysia) Bespoke leadership development programme for TM’s senior talent population.
Cranfield Master Classes A series of Master Classes on a range of topics aimed at companies which have indicated an interest in Cranfield’s expertise.
Out of AFRICA
By Stephen Hoare
egional CEO for G4S Africa, Andy Baker (MBA 2005) has a wide range of senior management experience across the continent. Born in Portsmouth and having begun his working life in London, Andy emigrated in 1989 to work as a manager for logistics company Laser Transport.
I was here in the last days of the old political regime and I had witnessed the change to democracy. I saw the wonderful effect Mandela had on the country. Not only is South Africa’s economy robust, but there is such good growth that the country has become a springboard for multinational and pan-national companies to expand across the African continent,” says Andy. Extractive industries such as oil and gas, and precious metals, brewing, banking, telecoms, multi-media and IT are all part of South Africa’s booming economy.
It seemed an obvious choice as Andy had completed his secondary schooling in South Africa, having moved with his family when his father - a Royal Naval officer - was posted to Cape Town as part of a naval exchange programme. “I had acquired permanent residency rights and I could see a lot of opportunities opening up,” says Andy (49). The move was a year before Nelson Mandela was freed from Robben Island, effectively ending the system of apartheid. Mandela became South Africa’s first black president in 1994, signalling the beginning of a massive overseas investment in what was seen as a stabilising economy.
With its headquarters in Pretoria G4S Africa employs 120,000 permanent staff across 29 countries in Africa including Egypt and Morocco, and is Africa’s biggest employer. With double digit growth year on year, the region is one of the fastest growing in the global group. “South Africa is our largest and most active market in Africa followed by Kenya, Nigeria, Mozambique, Angola, Tanzania and Morocco,” says Andy.
“The South African business environment is ever changing.
Prior to G4S, Andy’s career spanned logistics and IT. Leaving his first employer for international parcels group DHL, Andy acquired significant experience of doing business across Africa. Following promotion within the company, DHL then agreed to
“For me, Africa is a tremendously exciting place to do business and a great place to live.”
Out of Africa
sponsor him to study for a full-time MBA in 2004. Giving him the choice of any business school in the world, Andy selected Cranfield on account of its international reputation. “I was impressed by the quality of faculty and their approach,” he recalls. Lacking an undergraduate degree but with almost twenty years of unbroken management experience, Andy had found the ideal place to round off his business education. “Cranfield put a framework around my experience. It framed my empirical knowledge with a very strong emphasis on problem solving which was adapted to my way of working,” says Andy. The MBA also provided a powerful international alumni network, contacts that he has stayed in touch with to this day. Following the MBA, Andy spent a year as CEO of DHL Turkey before being head-hunted to become Managing Director of technology business Altech Netstar in South Africa and, subsequently, Chief Operating Officer of the global Altech Group in 2007 which included subsidiaries in
Out of Africa
“Not only is South Africa’s economy robust, there is such good growth that the country has become a springboard for multinational and pan national companies to expand across the African continent.”
France, India and Australia as well as subsidiaries across Africa. Cultural awareness and a relentless focus on problem-solving helped make Andy’s reputation. “From a cultural point of view, Turkey was a wonderful experience. Working in a city like Istanbul which is half in Asia and half in Europe, you get to feel the cultural blend,” he says. Returning with his family and two young daughters to South Africa, Andy settled in Johannesburg where he relaxes by playing golf and spending time with his family. At G4S, as at Altech Netstar, Andy made profitable revenue generation a high priority and put appropriate cost structures in place to achieve this. “What the MBA did give me was a hunger for knowledge and a different way of questioning. When I was at Altech we had an annual growth rate of 19 per cent over four years. I was quite pleased at that,” says Andy. Of course, business in Africa has its challenges. Great wealth inequalities persist and some industries are bedevilled by strikes, militant trades unions and poor labour relations. In some countries there is the further risk of government intervention with free markets. Andy is sanguine. “From a
regulatory point of view, a lot of what happens in South Africa also happens in Africa. For me, the major challenge is infrastructure. In Africa road, rail and telecommunications isn’t as advanced as continental Europe or the USA. There are parts of the continent where it is difficult and expensive to communicate. According to Andy there are no ‘no-go’ countries for G4S, which operates a big manned security service for private companies, besides running (since 2000) South Africa’s first private prison, Mangaung Correctional Centre. Cash processing for banks is a fast growing part of G4S’s business. “It’s a natural evolution from our cashin-transit business where we collect cash from retailers. It’s literally taking cash from various points in the cycle, processing, sorting, counting and delivering it,” says Andy. In Africa, threats are opportunities for G4S. “We guard corporate assets such as oil exploration sites in Nigeria or Ghana and we also offer a close protection service for travelling businessmen. We have our security staff meet people at the plane door, accompany them to wherever they are going and escort them back to their plane. We carry out a risk assessment and in some cases our protection officers are armed,” explains Andy.
Travelling is a large part of the CEO’s role and Andy spends three weeks in every month out of the office. Once a month he attends a meeting of the G4S global executive committee in the group’s London headquarters while two weeks is spent visiting G4S subsidiaries across Africa. “I have nine executives on my Africa team including four regional MDs, a CFO, HR Director, Operations Director, a Chief Commercial Officer and a legal counsel. In terms of manpower G4S recruits between 15-20,000 people a year across Africa for all permanent positions and the company has what Andy describes as a ‘very sophisticated HR machine’, active talent management policies and a relatively low staff turnover. Andy is at heart an enthusiast. “I saw a report the other day that foreign direct investment into Africa is growing substantially whereas it is actually falling in the first world. For me, Africa is a tremendously exciting place to do business and a great place to live. It’s a beautiful continent and for me the most exciting aspect about my role is that the growth potential is just staggering.”
MINDFUL meetings by Dr Andrey Pavlov and Dr Jutta Tobias from the Cranfield Centre for Business Performance
ost managers don’t like meetings. They say they are boring, go on too long and often end without important decisions being made. However, this needn’t be the case. We recently carried out a study of meetings which found that they can actually be one of the most powerful tools managers have. There is a catch though - it relies on people getting into a frame of mind that closely resembles the state of mindfulness so they can see things clearly and therefore make better decisions. Mindfulness techniques enable people to be aware of the present moment without reacting too quickly to information. This allows new perspectives and innovative ways of doing things to be explored before making a decision. At its core, mindfulness is ‘engaged awareness’. Our research found that when the chair of a meeting leads everyone into a ‘mindful space’, people engage in a more effective way. Everyone’s minds may still be busy but in an effective meeting, their attention is focused on specific priorities rather than on everything inside their head. By the chair taking responsibility for structuring and leading the meeting, everyone has the energy needed to focus and be aware of all that is going on throughout the meeting, observing the present moment in a nonjudgmental and purposeful way. Our study identified ten steps that a chairperson should follow to increase the likelihood of everyone in their meeting entering a ‘mindful space’ and engaging in an effective way. 1. Encourage openness Those at the meeting need to feel they can speak openly without worrying about the repercussions of what
they say. A safe environment can be established by banning personal criticism and encouraging people to speak up. 2. Establish trust An open atmosphere will also evolve if everyone at the meeting knows and trusts each other, as individuals will then share information and views more freely. This would not be the case if someone turns up at the meeting who has not been invited or is not expected to be there, which is why it is important to ask them to leave if that happens. 3. Ensure physical comfort Research shows that all thoughts and emotions arise first as physical sensations which are interpreted by people as feelings which in turn influence their thoughts and decisions. It is therefore critical that those present are physically comfortable. 4. Ensure diversity of views Inadequate diversity creates the danger of ‘groupthink’ - the belief among the group who are meeting that they and their decisions are invincible. To avoid this, ensure that those attending the meeting cover a range of backgrounds, perspectives and functions. 5. Allow expression of emotions Emotions are an integral part of people’s decision making, and mindfulness cannot emerge when emotions are explicitly or implicitly banned. It must be agreed upfront that reasonable ‘venting’ is okay and emotions are allowed. 6. Meet face-to-face Personal contact is a powerful anchor which fosters commitment and a sense of ownership. Try to avoid teleconferencing and encourage people to speak directly to each other in person.
7. Respect people’s limited attention span Attention is a key resource for mindful decision making and it is limited. People are more likely to stay focused and fully engaged in meetings when they are kept brief and varied in format, with breaks and refreshments when needed. 8. Maintain personal focus As the chairperson, you are the focus of everyone else’s attention. What you say or do has an enormous impact on the attention and mindfulness of those around you. Therefore, you need to maintain personal presence, stay for the full length of the meeting and clarify the structure of the meeting when needed. 9. Allow new ideas and priorities to emerge Mindfulness thrives on the present moment. Sticking rigidly to how the company has viewed business issues in the past takes attention away from what emerges ‘there and then’ in the meeting. You must stay involved in discussions as they unfold and avoid resisting the emergence of new priorities. When focused on what is required ‘right here, right now’, the relevant information is prompted and incorporated and the most effective and actionable decisions are made. 10. Shape the structure of the meeting It is important for the person leading the meeting to shape the structure and purpose of the meeting as it unfolds; and stay alert throughout the meeting to keep it on track. This enables everyone else to focus on the present moment. Although these ten points may seem obvious, you would be surprised at how few meeting chairs actually take them into account. Incorporating even a few of these suggestions will lead to more effective meetings. However, when implemented as a complete set, these actions will help everyone at the meeting to enter the ‘mindful space’ where old habits give way to new and effective decisions being made. MF
Flourishing through By Stephen Hoare
ike many traditional industries, printing has had to adapt to survive in the digital age. Based in March, Cambridgeshire, John Murphy’s cross media, multichannel web2print business ROI360 is prospering in an industry shaped by rapid and constant change.
John Murphy (BGP 2011) set up ROI360 in 2002 with two co-founders to sell software and state-of-the-art reprographic equipment to printers. Up until that point, he had been in sales with the print dealership Res but when the firm decided to quit the sector to concentrate on becoming a distributor for Hewlett Packard, he was left without a role. As part of a redundancy package, his former employer generously handed over to him all of their customer base and order book. It
was a business opportunity he couldn’t let slip. Helping his print industry customers keep up to speed with internet marketing, web printing and low cost customisation, John's business is based on a simple proposition. He ensures that his customers get the best value advice on any new print equipment, so that they are able to maintain a competitive edge. “Solving customer problems has always been in my DNA,” he says.
Flourishing through diversification
Managing to stay abreast of the technology has been a challenge. “The rush toward online marketing hit printers hard. In 2005 there were 16,500 printers in the UK. Today there are less than 5,500 left as printers have gone out of business or have consolidated,” says John. Diversification has been the key to survival. From a situation where most of his market was in the print industry, now just 60% of ROI360’s business is with printers, while a third comes from marketing agencies and a further 10% drawn from blue chip companies who commission print in-house. Customised solutions are the order of the day. “Our web2print business is evolving into multi-channel marketing of which print is just one medium. We are involved more and more with e-mail campaigns, personalised websites, SMS texts and social media,” says John. But hard work and customer focus will only take you so far. “By 2010 my business had plateaued. We weren’t doing anything wrong but we weren’t growing. Turnover for the past four years was hovering between £2 to £2.5 million and that created uncertainty,” says John. What was missing was the opportunity to step back from the day-to-day running of the business. A close contact tipped John off about Cranfield’s Business Growth Programme. “Adam Hill of printer Just Digital was in the same position as me but after he’d been on the course I saw he was getting focused and that his
business was going from strength to strength.” Joining Cranfield’s BGP provided a fresh perspective from a network of business people sharing their experiences. John’s first lesson was to observe the talent within his company and give his best people the chance to excel. This brought the uncomfortable revelation that his two co-founders were no longer as committed to the original vision as they once were. After some long, hard discussions, John bought them both out. “The guys I talent spotted have now bought into the business - one is now my Development Director and the other is our Sales Director who is incidentally doing an Executive MBA at Cranfield.” The next major change was to shift the bulk of the company’s turnover from one-off orders to a continuing subscription and a service delivery 'in the cloud'. Customers could draw down information from ROI 360 whenever they needed it.
“We’ve gone from a business model where 15% of turnover was based on annuity and the rest was new sales, to the reverse situation where 95% of our business has been a monthly subscription for cloud software.”
“We provide cloud-based software solutions for a regular monthly subscription. We’ve gone from a business model where 15% of turnover was based on annuity and the rest was new sales, to the reverse situation where 95% of our business has been a monthly subscription for cloud software.” Within 18 months turnover had doubled. John sees his role as helping his customers deliver a better service to the end-user. Although the company ROI360 has around 4,000 customers who buy its colour printing presses and print customisation and quality control software, John reckons that his company contributes to the marketing campaigns of over 15,000 end users. ROI360 has created innovative software to build the business by providing a more comprehensive customer service. His first product was an online marketing portal called Store Front which enables printers and graphic designers to edit or customise graphics prior to printing. “Being able to edit online via Store Front helps to enforce brand retention,” explains John. His latest product, Right Market, can match companies by geography and demographic, enabling marketers to find customers who best fit their preferred profile.
Over the past 18 months John has ploughed £200,000 of profits back into creating Right Market, and based on data supplied by the credit reference agency Equifax, the software contains records of 47 million households and businesses in the UK. “It’s not easy for a printer or an agency to spend time interrogating their customer database. We help them target their campaigns, cutting down the cost of unnecessary printing, and giving them a far higher hit rate. That’s better value for the customer and the end-user,” says John. To develop software that gives a competitive edge, ROI360 has set up two offshore operations, one based in the Czech Republic and the other in Vietnam. “In Vietnam we have a team of 15 computer programmers and one guy who’s based in the UK. These are all A-listers with a real work ethic.” So what of the future? As the industry undergoes further transformation, ROI360 clearly has the ability to evolve and John does not rule out moving into
print or even marketing strategy. “One possibility is that we move further up the food chain,” John adds. These days, work no longer dominates John’s life and he has developed a healthier work/life balance as well as some ambitious leisure pursuits. Last year, with former Cranfield classmate, Steve Brown, he took a month out to explore the Himalayas, walking as far as the Everest base camp. “I’ve got a much better life balance now and I’m off at the weekend climbing in Ben Nevis and later in the year it will be a high altitude walk to Machu Pichu.”
VentureDay 2014 The Annual Entrepreneurship Conference at Cranfield Thursday 8 May - www.ventureday.co.uk Cranfield VentureDay, now in its seventh year, is our one day entrepreneurship conference and networking event. This unique day consists of workshops, plenary sessions, and guest speakers, and provides a great opportunity to network with venture founders and advisors. Key themes for 2014 include: • Keynote speakers including our Entrepreneurs of the Year: Go Ape and Sara Murray OBE, Founder - Buddi Ltd & Confused.com • Dominating your niche & becoming and industry leader • Challenger banks - the new kids on the block • Managing shareholders & shareholdings • Stepping back: MD to Chairman • Emerging opportunities and winning business in the public sector • Family business - inside out and outside in • Managing owner-manager stress • Entrepreneurial finance • Cranfield innovations: new commercial horizons (& some investment opportunities).
To register for VentureDay 2014, or for more information, please visit: www.ventureday.co.uk or contact the VentureDay project manager, Wendy Lewis: email@example.com.
g min r o f s e Tran wledg n kno actio into
Roads to RESILIENCE by Professor Keith Goffin, Professor Marek Szwejczewski and Dr Elmar Kutsch
Roads to resilience
ompanies today face unprecedented levels of risk that have the potential to impact on their reputation, brand and longterm success. In recent years product recalls, operational accidents, and unacceptable practices in suppliers’ factories have led to numerous corporate crises, which have severely damaged brands in the automotive, food, oil and clothing industries. In the age of social media, bad news travels instantaneously. Therefore, companies need to create a culture of resilience that can prevent crisis and protect their brand and reputation. Too often, risk is perceived as a compliance issue that is solely the responsibility of the risk department, and which can be dealt with using processes and risk registers. However, recent research that we conducted for the risk management association Airmic shows that true resilience - the ability to manage the impact and consequences of risk requires far more than process and compliance. We looked at eight leading organisations in very different sectors: AIG; Drax Group; InterContinental Hotels Group (IHG); Jaguar Land Rover; Olympic Delivery Authority; The Technology Partnership; Virgin Atlantic and Zurich Insurance. The results showed that these organisations have developed five principles that enable them to put risk management at the centre of their corporate culture. We have called these the five R’s: Risk radar - the ability to anticipate problems before they develop. By seeing things in a different way, not only will a company develop an early warning system, it may also identify new opportunities.
Resources and assets - that are well diversified, providing the flexibility to respond to opportunities as well as adverse or changing circumstances. Relationships and networks - that enable risk information to flow freely throughout the organisation up to directors to prevent the ‘risk blindness’ that afflicts many boards. Rapid response - to ensure that an incident does not escalate into a crisis or disaster and that people and processes are in place to restore things to normal as quickly as possible. Review and adapt - the ability to learn from experience and make the necessary changes so that every adverse event or circumstance is identified, analysed, evaluated and improvements made to strategy, tactics, processes and capabilities.
“Resilience needs to become part of organisational culture and board members need to support their risk managers in driving this change.” It is important to note that all five of the principles were found to be highly developed in all of the organisations we studied. So it is not sufficient when only one or two of them are in place, as it is the interplay between all five that creates resilience. For example, the global hotels company IHG has an extremely
sophisticated approach to risk management. The company constantly monitors risks across its 4,600 hotels (the majority of which are franchises), with every employee trained to spot potential problems. This early warning network feeds through to IHG’s Global Risk Management Department, which has teams in place to respond to expected problems. Obviously, not every problem can be predicted in advance but IHG and other resilient companies find that by having preprepared responses for expected problems, the response to the unexpected can also be more effective. A key element in building a flexible response is the fifth ‘R’, the ability to learn from experience and nearmisses. Interestingly, the research identified that the ability to quickly identify emerging risks also allows organisations to become better at spotting the upside of risks - new opportunities. This allows them to be more successful in other areas of their business including: being more responsive to their customers and the markets they serve; achieving higher levels of staff motivation and gaining more trust from clients. The results paint a clear message to business leaders - resilience needs to become part of organisational culture and board members need to support their risk managers in driving this change. Although compliance and good governance are essential, if the responsibility for risk management is limited to one department, then problems will be recognised too late, responses will be inadequate, and the problems will transform into crises. Tools, techniques and processes are not enough; resilience must be based on the right organisational culture, where everyone is aware and takes responsibility for dealing with risk. MF
Cranfield INDUSTRY CLUB Two current MBA students, Dhruv Kapoor and Nitin Jain have established the Cranfield Industry Club, to help management students develop their industry knowledge by learning from Cranfield alumni and industry experts. With this aim, the club launched its speaker series earlier this year. “Learn from the Leaders”
In this series we will interact and learn from leaders with deep expertise in various industries such as construction, service, logistics, retail and mining so as to develop a holistic understanding about the challenges, practicalities and opportunities in a particular industry. The Industry club invited Cranfield alumnus (MBA 2002) and M.D. of Hanson Building Products, Stephen Harrison. Stephen completed his MBA from Cranfield in 2002. He started his career with Hanson as Business Development Manager, over the years he has worked in different divisions of Hanson in Operations, Business Development and Senior Management roles. Stephen shared his insights about the future of construction Industry, key Economic and Strategic considerations. Students benefitted by interacting with Stephen and learning from his experiences about authentic Leadership. With an aim to develop industry knowledge, the Industry Club hosted Martin Swain, VP Global Employee Relations, Inclusion & Diversity for GlaxoSmithKline on 10 March. A third event is planned in April hosting exciting speakers from diverse industries. For further details about the Industry Club, please write to us: Dhruv Kapoor (firstname.lastname@example.org) Nitin Jain (nitin.jain@Cranfield.ac.uk)
“It was a pleasure to be invited to talk to current students and share some practical challenges of leadership in industry and consider some topics that may not be readily found in academic literature. Credit is due to Nitin and Dhruv for taking the time to set up this forum which I hope will add further value to their education at Cranfield.” Stephen Harrison (MBA 2002), MD, Hanson Building Products
OPEN EXECUTIVE PROGRAMMES
CUSTOMER EXPERIENCE STRATEGY: CREATING A CUSTOMER-CENTRIC ORGANISATION Gain the skills to develop and implement a coherent customer experience strategy. 13 - 14 May 2014 & 11 - 12 Nov 2014 www.cranfield.ac.uk/som/ces
MINDFULNESS FOR HIGHER PERFORMANCE Harness the power of mindfulness to become a more creative and productive executive. 10 - 11 Jun 2014 & 17 - 18 Nov 2014 www.cranfield.ac.uk/som/me
CUSTOMERSâ€™ HIDDEN NEEDS Discover valuable opportunities for translating hidden customer needs into breakthrough products and services. 24 - 25 Jun 2014 & 6 - 7 Nov 2014 www.cranfield.ac.uk/som/chn
To download our course brochure scan here.
ng i m for ge s n Tra wled n kno actio into
“We didn’t price Royal Mail aggressively and, given the circumstances we were facing, we didn’t price it conservatively. With the Government still left with a 30% residual stake, the deal makes sense from all sides.”
Deal or no deal?
DEAL or no deal? By Stephen Hoare
Mark Russell, the Government’s corporate financier-in-chief, was at the heart of the most high-profile float of 2013, and will lead a series of major sales of Government assets this year.
ast December, the UK Government divested itself of a major part of its shareholding in Royal Mail, one of the biggest privatisations of recent years and a deal that will help ensure that the company can secure the investment needed to compete in the twenty-first century. The man behind the public flotation was Mark Russell, CEO of the Shareholder Executive (ShEx), a 150-strong body that sits within the Department for Business Innovation and Skills. Mark believes the Government got the best deal possible in spite of headlines accusing it of seriously undervaluing Royal Mail’s assets as shares priced at 330p closed the day at 580p. “We were selling 60% of a business in a turbulent market that was potentially facing strike action and we wanted to leave the business in a strong position to access the equity markets. We didn’t price Royal Mail aggressively and, given the
circumstances we were facing, we didn’t price it conservatively. With the Government still left with a 30% residual stake, the deal makes sense from all sides” says Mark. Prior to joining the Civil Service, Mark held a succession of roles at AT Kearney, Lazard Brothers, Robert Fleming, PwC and latterly KPMG, from where he was seconded to work for the Shareholder Executive in 2004. His considerable experience in deal making and mergers and acquisitions proved the perfect preparation for his current role. Motivated as much by intellectual curiosity, as any desire for wealth, Mark’s professional development hinged on studying for an MBA. “I managed to get the first ever research associateship AT Kearney ever gave and that led me to Cranfield which a senior consultant told me was one of the best business schools to advance my career,” says Mark.
Mark’s enthusiasm for solving complex financial challenges stems from his time at Cranfield where he was influenced by two very important figures. “David Myddelton gave me an excellent grounding in corporate finance and was an inspirational influence. And I will always remember Malcolm McDonald: his inspiring lectures taught marketing from a practical business perspective.” By the time he arrived at PwC, Mark was involved full-time in mergers and acquisitions, an activity which first brought him into contact with the Government. “At PwC I was involved with the privatisation of the Property Services Agency, which was part of the Department of Environment. The agency was a devolved, regionally based organisation so we came up with five geographic sales. I really enjoyed the challenge and the interaction with civil servants.” Arriving at the newly created Shareholder Executive (ShEx) in November 2004, initially on a one-year secondment from his then employer KPMG, Mark was offered the job as head of ShEx’s corporate finance practice and decided to stay on. His move from the private sector is a
Management Alumni Focus Focus
legacy of the 1999 Gershon Review which recommended that barriers between the Civil Service and the private sector be broken down in order to strengthen skills and boost organisational performance.
“I will always remember Malcolm McDonald: his inspiring lectures taught marketing from a practical business perspective.” Around a half of the senior staff in the ShEx have a business, accountancy or finance background, and its host department, Business, Innovation and Skills (BIS), has one of the highest percentages of private sector expertise of any Government department. “ShEx is one of the truly crossWhitehall groups: we report direct to other secretaries of state on their departmental assets,” says Mark.
Although he is paid at the level of a permanent secretary, Mark’s salary is far less than what a senior partner in a consultancy firm might earn. He explains “I took a significant pay cut. I was 44 at the time I made the move and had got to a stage when I was more interested in what I was doing than what I was earning.” Among the fringe benefits, Mark lists the collegiate atmosphere, employee diversity and working with bright people. The downside is the complexities of balancing the needs of different stakeholders. “In the Civil Service, the decision-making can be ambiguous, bureaucratic and political,” he admits. As chief executive, Mark has two main areas of responsibility. The first is looking after the Government’s stake in twenty organisations including the Met Office, Channel Four, Eurostar, and the Post Office. The Government’s shareholding in the three partnationalised banks, Lloyds, Northern Rock and RBS come under a separate body, UK Financial Investments which maintains a greater arm’s length relationship from Ministers than ShEx. Mark adopts a pragmatic approach to managing the Government’s diverse portfolio but there is no automatic
Deal or no deal?
presumption to sell assets and no ideological privatisation agenda to pursue. At the moment, Mark is working on preparing for the sale part of the student loans book, currently worth approximately £40 billion in outstanding loans. “The £40 billion is the future receivable and we believe there will be a number of investors who could be interested in purchasing part of this,” says Mark. He is also considering selling the Government’s 40% stake in Eurostar for which there is no policy reason to continue to hold. But it is the second part of his job which calls for a mixture of political and diplomatic skills coupled with sound financial judgement. The ShEx’s corporate finance role involves situations where Government may consider supporting major British companies in temporary difficulty. Sound judgement is vital in deciding whether to risk taxpayers’ money to support a sector or a business where failure would have serious political consequences. Mark explains that a balance has to be struck between politics and finance and cites one of his best decisions was advising Ministers not to intervene in Jaguar Land Rover, now enjoying
success under the ownership of the Tata Group who acquired it in 2008. He is also proud of his role in the rescue of care home provider Southern Cross and the saving of 40,000 jobs. “The company itself wasn’t massively indebted but its landlords, who themselves had large borrowings, were ratcheting up the rent. This was a case where the Government might have had no option but to step in. “Instead of allowing Southern Cross to go bankrupt and then restructure its debts, I helped bring all the parties together and asked everyone to share some financial pain. What we achieved was a solvent restructuring,” says Mark. So what does the future hold? After a decade at the heart of Government backed corporate finance and having achieved so much Mark does not rule out a return to the private sector. At the top of his game and continuing to run and cycle, he cuts a youthful figure and says he is always up for a challenge. “I’ve still got three young children and three sets of school fees to pay. Let’s see what life brings!” MF
Alumni Relations and Development Office Cranfield University Cranfield, Bedfordshire, MK43 0AL UK t: +44 (0)1234 754456 e: email@example.com Copyright ÂŠ Cranfield University 2014