CEO Magazine - Volume 16

How to

Market a Revolution 4 Principles for helping to make Better Decisions CEO16_OFC_Cover.indd 1

5 Books that predict the future of Workplace Leadership

Teaching Leaders how to become Agents of Change 25/10/2014 14:59

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CONTENTS

Table of Contents 8 10 14

Best Practices for Bootstrapping your Early Stage Venture Emad Rahim

MBA Review CEO Magazine

Five Books that Predict the Future of Workplace Leadership Mark C. Crowley

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CONTENTS

18 22 25

2

Teaching Leaders to Become Agents of Change Bert Wolfs

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The One-Word Answer to Why Bill Gates and Warren Buffett Have Been So Successful Greg McKeown

Global Delusions Cyril Bouquet and Jean-Louis Barsoux

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Can you Learn to be a CEO? Stanislav Shekshnia, Kirill Kravchenko and Nadezda Kokotovic

Getting to Know the Georgia WebMBA Faye McIntyre

35 40

Top-class faculty to get you to the top of the class Australian Institute of Business

Four Principles for Making Better Decisions Pan Pan

40 4

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42 45 48

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When I Found the Salesperson’s Script Filip Hron

How to Market a Revolution

48

Markus Christen and Benjamin Kessler

List of Contributors

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CONTENTS

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29/10/2014 10:23

BOOTSTRAPPING

Best Practices for

Bootstrapping Your EARLY STAGE

VENTURE Emad Rahim

E

ntrepreneurial financing might be one of the most difficult and intimidating aspects of business ownership. While entrepreneurs are filled with innovative ideas and passion, they're often starving for the capital to jumpstart and grow their business. Instead of searching for venture capitalists and angels to invest in your business, or hoping you get invited onto the show 'Shark Tank' to pitch your idea, why not consider bootstrapping first?

Bootstrapping means financing a new company without resorting to loans—that is, seeking the assistance of, or input from, other parties. These include friends, family and colleagues, but also key stakeholders, such as suppliers, customers, the public and unions. The goal here is to shun the conventional lending system that banks and insurance companies, among others, operate.

According to Professor Ramana Nanda, a small-business finance expert and bootstrapping connoisseur at Harvard Business School, bootstrapping also comes into play when startup owners feel that borrowing costs are too high, given future growth prospects, a sluggish economy and uncertain operating contexts.

8

TOP 10 BOOTSTRAPPING TIPS

1. Seek trade credit Trade credit is the kind of quasi-borrowing you get from suppliers and service providers, such as shipping companies, utilities firms and logistics businesses. For example, your startup can sign an agreement with a supplier whereby you get merchandise and pay, say, after 90 or 180 days.

The agreement gives you time to collect cash from customers before paying the supplier, and you can avoid borrowing to finance the merchandise.

2. Engage in factoring Factoring means you sell your receivables—money you expect from customers—to a factoring company in exchange for immediate cash. The factoring company usually charges a factoring fee, or discount, which may range from five to fifteen per cent, depending on your industry, the economy and the customer’s credit rating, among other criteria.

3. Get a letter of credit from customers A letter of credit is a note that your customer’s bank sends to your financial institution confirming that they have the funds available to pay you. This letter gives you, and your banker for that matter, peace of mind, because you don’t have to borrow money to purchase the materials before selling them, and you don’t face credit risk if the client doesn’t pay.

4. Apply for a manufacturer loan Entrepreneur Magazine recommends that new entrepreneurs negotiate loans or financing agreements directly with manufacturers, especially when it comes to purchasing fixed assets, such as office equipment and factory machinery. Manufacturers usually provide these loans at better rates to lure prospects, and this is an effective way to propel your bootstrapping efforts.

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BOOTSTRAPPING

5. Sign a lease agreement

6. Seek cash from family and friends

9. Reduce operating expenses

Negotiate the best terms you can get in a lease agreement, and shy away from purchasing office space. You don’t have the cash, so you might as well find the best lease deal out there that fits nicely with your startup, industry and the main location where your target audience does business.

Don’t underestimate the funding power of your inner circle when looking for alternative ways to kick off your startup. Depending on your lineage, professional network and friend list, you can raise enough operating money. Family and friends are typically more prone to funding an entrepreneur’s idea because they want them to succeed says Jason Abaluck, Assistant Professor of Economics at Yale School of Management.

Bootstrapping doesn’t simply focus on getting money from non-lending sources, it also entails an effective use of resources you already have.

Start by reducing operating expenses like rent, office supplies, utilities and materials. Also pay attention to personnel costs, and hire as many interns as you can.

7. Tap into your savings

Keeping with the same tactic of reducing operating costs, try to be a jack-of-all-trades.

Wear as many hats as possible in your new business. For example, you can be the chief executive officer, the head of operations and the purchasing manager.

Don’t underestimate the funding power of your inner circle when looking for alternative ways to kick off your startup.

Want others to show you some financial love by helping to propel your business? Of course, the answer is “yes.” So why don’t you start by using part of your own nest egg? Certain retirement schemes will allow you to borrow money from your own accounts at reduced rates.

8. Sell equity stakes to investors Inviting other investors to buy shares in your startup is another effective bootstrapping strategy. You simply sell equity stakes, or shares, of your company to these investors in exchange for cash. You lose some ownership in your company, but you avoid the often stratospheric interest rates charged by banks that could drag your revenue margins down.

10. Be a jack-of-all-trades

Takeaways Bootstrapping is an art and a science, and you should treat it as such. It is an art that you, as a startup owner, need to polish, making sure you cultivate the appropriate ties with key stakeholders that will help your business grow.

Bootstrapping is also a science in the sense that you still need to manage your business by the numbers, ensuring that your operation generates sufficient revenue to cover your financing costs and eke out a reasonable return on investment.

Money issues can be the bane of your business – whether you have too little to successfully operate or grow it, or too much from the wrong people or institution. Research your options carefully and tread strategically toward the best combination of options for you and your business.

Biography Ø Emad Rahim is an award – winning entrepreneur, educator, author and community leader.

He currently serves as the Assistant Dean of Business at Strayer University and Professor at the Jack Welch Management Institute. He is the appointed Endowed Entrepreneur-in-Residence for Oklahoma State University and Visiting Scholar at Rutgers University. You can follow him on Twitter @DrEmadRahim.

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MBA REVIEW

International Graduate Forum MBA Rankings Autumn 2014 The International Graduate Forum’s (IGF) Autumn 2014 MBA Rankings have been compiled based upon key performance indicators considered to be of interest and value to potential students. Thus, international diversity, class sizes, student work experience, faculty-to-student ratios, and faculty qualifications – both academic and professional – have been given considerable weight. With competition between business schools continuing to increase, it is important for schools to understand what students really want. Schools ranked highly by the IGF in CEO Magazine have been successful in this goal.

NORTH AMERICAN MBA RANKINGS

EUROPEAN MBA RANKINGS

Tier One

Tier One

Appalachian State University

Ashridge Business School

California State University, San Bernardino

Audencia Nantes

Colorado Technical University

Birmingham Business School

Fairfield University

Brunel Business School

Fordham University Graduate School of Business Administration

CEU Business School

Georgetown University, McDonough

Copenhagen Business School

Jacksonville University

Cranfield School of Management

Kennesaw State University

Darmstadt University of Applied Sciences

Kent State University

EADA

La Salle University

EIPM

Le Moyne College, Madden

École des Ponts Business School

Lynchburg College

ESADE Business School

Millsaps College

ESMT

Niagara University

European University

Northwest Missouri State University

HHL Leipzig

Queens University of Charlotte

ICN Business School

Simmons College

IE Business School

The University of Memphis

IESE Business School

University of Alabama in Huntsville

IfM - Institut für Management

University of Rochester, Simon

International University of Monaco

University of the Sciences

ISEG - Lisboa School of Economics & Management

Wake Forest University School of Business

Lancaster Management School

Winthrop University

Lorange Institute of Business Zurich

Tier Two

Mannheim Business School

Berry College, Campbell * Boston College, Carroll Carnegie Mellon University, Tepper Columbia Business School * Georgia Southern University Grand Valley State University McNeese State University College of Business Roosevelt University UCI Merage School of Business University of Alaska Anchorage

MIP Politecnico di Milano Paris School of Business Porto Business School Reykjavik University Rochester-Bern SBS Swiss Business School The Lisbon MBA (Nova and Católica-Lisbon) * University Carlos III of Madrid University of Strathclyde Warsaw School of Economics

University of Denver, Daniels College of Business

Tier Two

University of Texas at Austin McCombs *

INDEG-IUL ISCTE

University of Washington, Foster Washington University in St. Louis * Willamette University, Atkinson 10

*Incomplete data

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MBA REVIEW

AUSTRALIAN MBA RANKINGS

ONLINE MBA RANKINGS

Tier One

Tier One

1

Victoria University Graduate School of Business

Colorado Technical University

=2

Australian Institute of Business

Deakin University

=2

Monash University

George Washington University

4

University of Wollongong, Sydney

IE Business School

5

The University of Queensland Business School

Imperial College Business School

=6

University of Sydney Business School

Indiana University, Kelley

=6

Melbourne Business School

International University of Monaco

=8

Macquarie University Graduate School of Management

Jack Welch Management Institute

=8

Australian Catholic University

Northwest Missouri State University

10

Deakin University

SBS Swiss Business School

11

University of Western Australia Graduate School of Management

Temple University, Fox

12

University of Ballarat

Thunderbird School of Global Management

13

Swinburn University of Technology, Australian Graduate School of Entrepreneurship

University of Liverpool

14

The University of Adelaide

University of Westminster

15

RMIT University Graduate School of Business and law

16

University of Technology Sydney

17

University of Western Sydney

18

Murdoch University Business School

19

Southern Cross University *

University of North Carolina, Kenan-Flagler

Tier Two

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MBA REVIEW

Global TOP 20 MBA Rankings Copenhagen Business School

Europe

Ashridge Business School

Europe

=2

ESADE Business School

Europe

Audencia Nantes School of Management

Europe

=2

Audencia Nantes

Europe

California State, San Bernardo

North America

=3

École des Ponts Business School

Europe

CENTRUM Catolica

Peru

=3

EADA

Europe

Copenhagen Business School

Europe Europe

4

La Salle University

North America

Cranfield School of Management

=5

ESMT

Europe

EADA

Europe

=5

University of Strathclyde

Europe

ENPC Fox Executive MBA

6

Victoria University Graduate School of Business

Australia

Europe/ North America

ESADE

Europe

7

Queens University of Charlotte, McColl School of Business

North America

Euromed

Europe North America

8

Ashridge Business School

Europe

Fordham University Graduate School of Business Administration

9

IE Business School

Europe

HHL Leipzig

Europe

10

Cranfield School of Management

Europe

ICN Business School

Europe

11

Rochester-Bern

Europe

Jacksonville University

North America

=12 Kent State University

North America

Kent State University

North America

=12 Lancaster Management School

Europe

Lancaster University

Europe

=13 Australian Institute of Business

Australia

Millsaps College

North America

=13 Monash University

Australia

Porto Business School

Europe

=13 International University of Monaco

Europe

Queens University of Charlotte McColl School of Business North America

=14 University of Wollongong, Sydney Business School

Australia

Reykjavic University

Europe

SBS Swiss Business School

Europe

=14 Jacksonville University

North America

The University of Memphis

North America

=14 Lynchburg College

North America

University of Rochester, Simon

North America

=14 University of Rochester, Simon School of Business

North America

University of Strathclyde

Europe

=14 IESE

Europe

University of Sydney Business School

Australia

=15 The University of Queensland Business School

Australia

Warsaw School of Economics

Europe

=15 HHL Leipzig

Europe

Australian Catholic University

Australia

=16 Fordham University, Graduate School of Business Administration

North America

Carnegie Mellon, Tepper

North America

=16 Paris School of Business

Europe

CEU Business School

Europe

=16 University of Sydney Business School

Australia

Columbia Business School *

North America

=16 Melbourne Business School

Australia

Concordia University, John Molson

Canada

=16 The University of Memphis

North America

EIPM

Europe

=16 Porto Business School

Europe

ESMT

Europe

=16 Mannheim Business School

Europe

European University

Europe

=17 Macquarie University, Graduate School of Management

Australia

Georgetown University, McDonough

North America

IfM-Institut fĂźr Management

Europe

=17 Australian Catholic University

Australia

INDEG-IUL ISCTE

Europe

=17 CEU Business School

Europe

Kennesaw State University

North America

=17 Birmingham Business School

Europe

Lorange Institute of Business Zurich

Europe

=17 ICN Business School

Europe

Mannheim Business School

Europe

18

North America

MIP Politecnico di Milano

Europe

=19 Appalachian State University

North America

RMIT University Graduate School of Business and Law

Australia

=19 Reykjavik University

Europe

Saint Mary's University, Sobey

Canada

=20 Deakin University

Australia

University of California, Irvine

North America

=20 California State University, San Bernardino

North America

University of Regina

Canada

Europe

University of Technology Sydney

Australia

University of Texas at Austin, McCombs *

North America

University of Washington, Foster

North America

University of Wollongong, Sydney

Australia

Washington University in St Louis, Olin *

North America

Kennesaw State University

=20 Brunel Business School

12

Global EMBA Rankings Tier One

1

Global EMBA Rankings Tier Two

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THE FUTURE OF WORKPLACE LEADERSHIP

BOOKS

that Predict the Future of

Workplace Leadership

These authors aren’t fortune-tellers, but their works can shed light on the future of leaders and workplaces.

Mark C. Crowley

O

Pay now ranks fifth in importance to people as a driver of their engagement, loyalty, and productivity all around the world.

14

ur long-enduring resistance to bringing the heart into workplace management dates as far back as the industrial revolution.

Traditional leadership theory espouses that workers should be treated like any other input: squeeze as much out of them as possible and pay them as little as possible.

This idea originated at a time when work was far less complex and people were more easily replaceable. Under a scenario like this, managers were taught to ignore the human aspect of employees – or heart – and to be indifferent to their needs. Companies motivated performance with pay, often the only reward workers received.

But today’s workers have greatly evolved in what they need and want in exchange for their work.

It’s simply a stunning fact that pay now ranks fifth in importance to people as a driver of their engagement, loyalty, and productivity all around the world.

While pay, of course, will always be an important component of one’s employment, 21st-century employees

have a deep desire to thrive in their jobs.

They have a hunger to do meaningful work, to feel connected to an organization they respect, to grow, contribute, and to know at the end of every week that their efforts were appreciated and valued.

The following five paradigm-breaking books clearly illustrate that the best way to inspire and motivate the highest levels of engagement in this century’s workers is through their hearts...

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THE FUTURE OF WORKPLACE LEADERSHIP

Mindset: The New Psychology of Success

By Carolyn Dweck Knowing that many players had a tendency

in business is that people are born with a

or when their team had fallen far behind

fixed amount of intelligence and talent;

– Jackson taught his teams mindfulness

individual capabilities are firmly set in stone.

techniques and the importance of staying focused in the present moment.

This idea, what Stanford University professor, Carolyn Dweck, calls a “fixed

Seeking to build a high degree of trust, he

mindset,” influences workplace managers

met with players individually and intentionally

to leverage employees who quickly display

learned about their backgrounds and

natural ability – and to invest little time and

motivations. “I cared for them as a person,”

resources seeking

he writes, “not just a basketball factotum.”

to develop all the others.

Highly influenced by a lifelong study of Zen

But when Benjamin Bloom, eminent

Buddhism, native American practices, and

educational researcher, studied 120

classical Chinese philosophy – to name only a

outstanding achievers in numerous fields

few of his ancient wisdom sources – he placed

– world-class athletes, mathematicians,

extraordinary emphasis on selfless teamwork

concert pianists – he discovered few of

and collaboration. He taught players that

them were remarkable as children. They

winning in any aspect of life is inextricably

only revealed their capabilities once their

linked to personal character and inner strength.

training began in earnest.

To this end, he openly sought to influence and

Eleven Rings

The traditional view

to get down when they weren’t scoring well –

motivate them spiritually.

“I can’t pretend to be an expert in leadership

Predicated on this and other remarkable research, Dweck disproves the long-enduring paradigm of human limitation. She writes

theory,” Jackson writes. “But what I do know is that

that a person’s potential is “unknown and

By Phil Jackson

the art of transforming a group of young, ambitious

unknowable,” and regardless of talent,

individuals into an integrated championship team

aptitude and IQ, people can greatly expand

Widely considered the greatest coach in

is not a mechanistic (X’s and O’s) process.

their abilities through effort, thoughtful

NBA history, Phil Jackson won a record 11

“It’s a mysterious juggling act that requires not

championships – six with the Chicago Bulls

only a thorough knowledge of the time honored

and five with the Los Angeles Lakers – and led

laws of the game, but also an open heart, a clear

his teams to victory in over 70 per cent of the

mind and a deep curiosity about the ways of the

games they played.

human spirit.”

coaching, and experience.

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THE FUTURE OF WORKPLACE LEADERSHIP

The Athena Doctrine: How Women And The Men Who Think Like Them Will Rule The Future

By Michael D’Antonio & John Gerzema

Creative Confidence: Unleashing The Creative Potential Within All Of Us

By Tom Kelley and David Kelley We don’t always think of creativity as being essential to leadership success, yet a recent

The financial crisis that began in 2007 has

IBM survey of more than 1,500 CEOs reports

had long-enduring impacts on most of our lives.

that it’s become the single most important

As sobering examples, nearly 10 million people

competency in organizations today.

remain unemployed in the US today, and one in

And few people know more about the

five homeowners owe more on their homes than

creative process – the ability to produce

they’re worth.

something new in the world – than the two

According to best-selling author John Gerzema, and Pulitzer Prize-winning journalist Michael D’Antonio, reflection on what caused

Kelley brothers.

David is a founder of Ideo, arguably the most influential design and innovation

this catastrophe has influenced our entire society to reassess what qualities are essential to

firm in the world, and head of Stanford

leadership roles going forward.

University’s design school (“d.school”). Tom

The authors surveyed 64,000 people in 13 countries and discovered that “nearly two-thirds of

is general manager of Ideo, the company that

people around the globe – including the majority of men – now feel the world would be a better

invented Apple’s first mouse and the Pringle

place if men thought more like women (this is regardless of age, income, or nation).”

potato chip, and has received 346 design

Of all the people surveyed, 81 per cent said that, man or woman, you need both masculine and feminine traits to thrive in today’s world. “From this point of view,” say the authors, “an embrace

awards since the firm was founded in 1991.

In a book that was written after David

of feminine qualities can be thought of as a competitive advantage, not unlike a breakthrough

was diagnosed with terminal cancer and

technology or major market insight.”

then miraculously recovered, the siblings were motivated to share their greatest insights into “design thinking.” Approaching their work from an intensely human perspective is the cornerstone of their uncommon process.

“We’re not suggesting that anyone base a career or run an organization solely on feeling, intuition, and inspiration,” the authors say. “But an over-reliance on the rational and analytical can be just as risky.”

16

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THE FUTURE OF WORKPLACE LEADERSHIP

Onward: How Starbucks Fought For Its Life Without Losing Its Soul

By Howard Schultz At the height of the Great Recession, institutional investors hounded Starbucks

Reflection on what caused this catastrophe has influenced our entire society to reassess what qualities are essential to leadership roles going forward.

founder and CEO, Howard Schultz, to eliminate health care benefits for all its full – and part-time workers. With a stock price at an all-time low and the coffee purveyor facing a truly ambiguous future, the move would save the company $250 million in annual expenses.

Instead, unlike many of his business peers, Schultz took the road less traveled.

He began his deliberations by asking himself what kind of company he’d be left with once employees no longer received a benefit that had consistently driven high engagement and loyalty. And a formative childhood experience also proved to hold great sway.

In a book that uses the word “heart” 33 times, Schultz explains why he ultimately decided to bet on his people as being the

Biography Ø Mark C. Crowley is the author of Lead From The Heart: Transformational Leadership For The 21st Century. His work has been published by Reuters, LinkedIn and the Huffington Post; he’s also a frequent contributor to Fast Company Magazine. Connect with Mark through his website: www. markccrowley.com, Facebook: www.Facebook.com/leadfromtheheart or Twitter: @markccrowley.

best means to enduring the financial crisis.

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28/10/2014 17:43

SBS SWISS BUSINESS SCHOOL

Teaching TO BECOME Leaders

AGENTS OF CHANGE Alexandra Skinner speaks to SBS Swiss Business School’s Bert Wolfs and Kloten-Zurich

SBS Swiss Business School is a practically-driven business school with a focus on Work-Applied Learning.

Does this challenge your faculty to regularly update their knowledge?

to start a business and take risks is influenced

This is indeed a constant and significant

influence, but we can give entrepreneurs tools

challenge! We encourage our faculty to

which will make them more knowledgeable and

How does this benefit the students of your programmes?

undertake consulting as well as scholarly

more successful. We can also advise them on

work. Our full-time faculty also mentor at least

their business plans and help them through the

We are a student-centered business school

one student thesis per year in their field of

start-up process. Some of our alumni have started

which applies andragogical principles.

specialisation, although of course, most mentor

businesses from scratch, and have achieved

Collaboration among the different participants,

many more. This allows them to update their

millionaire and billionaire status in USD. That

such as industry partners, instructors and, of

knowledge. In addition, we send our faculty

means that we are doing something good for the

course, the students, is key to our success, and

to participate in seminars and improve their

society and that makes me very proud of SBS.

we also emphasise more equality between the

knowledge and skills. Lastly, if applied research

lecturer and the learner. If we refer to a recent

is their cup of tea, we support their research and

Gartner study, Watchlist: Continuing Changes

publication. All of these activities help them

in the Nature of Work, 2010-2020, the world

to be competitive in a business and academic

of work in 2020 will be increasingly chaotic,

environment. The consulting work of our faculty

In your opinion, what are some of the key steps that business schools need to take in order to cultivate a culture of entrepreneurs?

profoundly virtual, and hyper-connected. We

also allows them to identify the latest trends and

In Latin they say “Per aspera ad astra”. A rough

are preparing our students for such a volatile

bring that information to the classroom.

translation would be “Through hardships to

world with practical, relevant and goal-oriented

the stars” – if you work hard, you will achieve something. This is the culture that we try to convey

and effective leaders within an organisation,

SBS Swiss Business School’s MBA portfolio includes an MBA in Entrepreneurship. Some argue that ‘entrepreneurship’ cannot be taught.

How would you counter this?

in which they will not only work hard,

Everything can be taught in life, but I cannot

in the classroom; they can foster the individual’s

but also smart.

force someone into entrepreneurship. The desire

leadership skills, teach them how to motivate team

education. If they can link the academic materials to their workplace, that will provide the greatest benefit to them and their employers.

At the end of the day, we want more efficient

18

by several factors. It is a process we cannot

to our students. Entrepreneurship is about seeking opportunities and taking risks, and we incorporate this mentality into our curriculum. However, external activities are as important as learning

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SBS SWISS BUSINESS SCHOOL

Some of our alumni have started businesses from scratch, and have achieved millionaire and billionaire status in USD.

members and allow them to learn from others

skills, and risk appetite play a more important role.

Leadership is about trust and compassion. From

by seeing and doing. The main aim is to create a

Switzerland has a relatively low unemployment

my personal experience, I have learned that

mindset change. You aren’t an entrepreneur from

figure, but young people and the older generation

focusing on weaknesses makes people doubtful.

Monday 8 a.m. until Friday 5 p.m. – you are an

are looking for career alternatives. A start-up

If we tackle the leadership question with a

entrepreneur on a daily basis, 365 days per year. If

business is a good route as Switzerland is among

positive mindset, we can achieve more with the

we can achieve this, in addition to an appetite for

the leaders in innovation in the world. Technology

participants and extend their personal borders,

innovation and thinking outside the box, I think our

determines more and more how a vision and

which is always a big surprise to them. Due to

students will be prepared for real-life.

mission can be carried out for a start-up business.

the ageing of the work population in advanced

It is also relatively easy to start a business in

economies, different values are brought into

Switzerland and that helps to explain some of the

the workforce and that makes it more complex.

success factors of young entrepreneurs. We don’t

We can expect a workforce implosion if baby

lack financial means in this country, and this is

boomers, Gen X, Gen Y and Millennials or Gen D

always helpful for new start-ups.

(from Digital Natives) cannot work together in

Start-up rates in Switzerland are growing and technology-based industries have also seen a surge in entrepreneurs. Do you feel that this is a result of a greater focus on entrepreneurship from business schools within the local market?

Well, this is related to several factors and a good education is just one of them. So let us be humble and say that we have made a modest contribution.

Other factors such as location, tax laws, workforce

the future. The gap between those who know and

Nurturing strong, ethically mindedleaders remains the focus for many MBA programmes. At SBS Swiss Business School you take a strength-based leadership approach. How does this work?

those who don’t will continue to increase in the coming years and we need to prepare our future business leaders for that. If you know where your strengths and weaknesses are, you have a much better starting point to lead others from.

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SBS SWISS BUSINESS SCHOOL

Your online MBA programme is supported

by SBS Swiss Business School’s Learning Management System (LMS). How does the system create a supportive learning environment that maintains the student’s motivation and engagement?

Our online educational programmes and MBA have known incredible growth figures in the past years and will continue to positively surprise us. The life-work balance has changed over the years, and people understand that they need to upgrade their qualifications, but not in a traditional way. We have built a system called: ‘SBS-i-learn’ which is our platform to provide the course materials and interaction with our students. For example, we have a discussion platform to make sure that each member of the class participates, and we integrate livesessions with the lecturer, so that issues can be discussed. We still struggle a bit with the time factor, as we have online students from different time zones across the world, but most other online learning programmes experience the same obstacles. One thing I have seen, however, is that where there is a will, there is a way.

Business schools continue to be challenged to innovate in order to meet the demands of an increasingly discerning student population.

value contribution to the overall success of the

are often personally responsible for this as,

company and its stakeholders. Leaders need to

in this cost-driven economic environment,

What do you feel are some of the main challenges that business schools are currently facing?

be change agents who have the skills to make

companies are not always willing to carry the

speedy decisions. Leaders need to be able to

costs. Another issue is that we want to capture

balance their entrepreneurial thinking with

more from the ageing population. The DBA is

Business schools have plenty of challenges in

technical learning.

the right educational programme for this, as it helps students to shape the listening and

these turbulent times. Technology is changing

coaching skills of experienced workers and

with a rapidly changing workforce looking for

How will SBS Swiss Business School position itself to face these challenges over the coming 12 months?

new employability skills and attitudes? In my

Twelve months is a short time, but we do have

I will remain a happy Academic Dean!

view, leaders will have to deal more and more

goals which we have to achieve to please our

with unpredictability and fast-changing events

different stakeholders. We will continue to

all over the world. In the past a manager was

improve the interaction in our Online MBA

expected to have an answer for each of the

programme and to promote our Doctor of

employee’s questions – this will no longer

Business Administration (DBA) programme.

be the case in the future. Leadership will be

Lifelong learning and being responsible for your

about adaptability, innovative thinking and

own career development are the new signs of

challenging the workforce for meaningful

loyalty towards your employer. Today employees

and we need to adapt. Are ‘tenured’ professors still a viable business model? How do we cope

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executives – skills which we lack in the current workforce. If we achieve these goals this year,

Biography Ø Bert Wolfs, Ph.D., MDP, (Harvard GSE) is Academic Dean of SBS Swiss Business School, Zurich, Switzerland.

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LEARNING TO FOCUS

Learning to

FO CUS FOCUS The one-word answer to why Bill Gates and Warren Buffett have been so successful.

Greg McKeown

W

hen Bill Gates first met Warren Buffett, their host at dinner, Gates' mother, asked everyone around the table to identify what they believed was the single most important factor in their success through life. Gates and Buffett gave the same one-word answer: "Focus." (See more in The Snowball by Alice Schroeder).

I love the clarity of their answer but I am also concerned by how this can be, to quote Rudyard Kipling, “twisted by knaves to make a trap for fools.” I am an advocate for focus in work, life and leadership. However, the subject has a nuance and depth that many people miss. For a start, most people think of there only being one kind of focus.

Focus as a Noun. When people speak of focus they usually mean having a single goal. It is a static thing, a thing you have. This kind of focus conjures pictures of Roger Bannister relentlessly pursuing his goal of breaking the four-minute mile, John F. Kennedy challenging NASA to put a man on the moon within a decade or, coming back to Bill Gates, a vision of a personal computer on every desk. The upside to this kind of focus is clear and compelling: you pursue a single objective and don’t get distracted along the way; you build momentum as many different people aligned behind achieving this one goal.

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However, there is a dark side to focus as a noun. It’s what we might think of as the Kodak Problem. Kodak was relentlessly focused on a single objective—and it almost killed them.

They found themselves caught off guard by the disruptive innovation of digital cameras. Kodak was so focused on optimizing for traditional film capture and processing that they did not see or accept the transformation in their industry. This is where the second type of focus comes in.

Focus as a Verb. Focus is not just something you have it is also something you do. This type of focus is not static; it is an intense, dynamic, ongoing, iterative process. This kind of focus conjures pictures of Steve Jobs saying to Jony Ive day after day, “This might be crazy, but what if we...” until once in a while the idea took the air out of the room. It’s the constant exploration needed to see what is really going on and what the “noun focus” should be.

Imagine if the moment you woke up this morning your eyes focused one time and then never adjusted again. You would be out of focus all day. Our eyes produce clarity through a perpetual process of adjustment. Similarly, in our lives and on our teams, it is not enough to say, “We have our focus!” Rather, and adapting Dwight D. Eisenhower’s statement, “Focus is nothing, focusing is everything.” That may take the point too far, but it still makes the point that having a focus is insufficient.

The downside to thinking of focus as a verb only is that it can lead to being overly reactive.

It can lead people to making and remaking decisions too fast for any real momentum to take place. It can result in counterfeit agility where things feel fast but people aren’t going forward. It can become motion sickness instead of momentum.

The answer is to develop and value both types of focus. Professor Henry Mintzberg taught that there are two sources of strategy: deliberate strategy, where leaders develop a clear vision and map this to long, medium and short term goals (focus as a noun) and emergent strategy, where people respond to unanticipated problems and opportunities (focus as a verb). It is the disciplined pursuit of both of these approaches that best enables us to focus on what is essential. We can plot this on a two by two to see what is at stake.

Here are three ways to combine both types of focus to ensure we’re getting the vital few things done.  Ask the right questions. Bill Gates said of Warren Buffett, “I first met him... at a dinner my mother had put together. On my way there, I thought, ‘Why would I want to meet this guy who picks stocks?’ I thought he just used various market-related things—like volume, or how the price had changed over time—to make his decisions. But when we started talking that day, he didn’t ask me

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HIGH

LEARNING TO FOCUS

Get the right thing done

Get almost nothing done

Get a bit of everything done

Focus as a noun

Get the wrong thing done

LOW

Focus as a verb

about any of those things. Instead he started asking big questions about the fundamentals of our business. ‘Why can’t IBM do what Microsoft does? Why has Microsoft been so profitable?’ That’s when I realized he thought about business in a much more profound way than I’d given him credit for.”  In order to have focus we need to escape to focus. As I wrote in Essentialism, “I once attended a question-and-answer session with Bill at the headquarters of the Bill and Melinda Gates Foundation in Seattle, Washington. By chance he had just completed his latest ‘Think Week.’ Though I had heard about this practice, what I didn’t know was that it goes all the way back to the 1980s and that he stuck to it through the height of Microsoft’s expansion. In other words, twice a year, during the busiest and most frenetic time in the company’s history, he still created time and space to seclude himself for a week and do nothing but read articles (his record is 112) and books, study technology, and think about the bigger picture. Today he still takes the time away from the daily distractions of running his foundation to simply think. Whether you can invest two hours a day, two weeks a year, or even just five minutes every morning, it is important to make space to escape in your busy life.”

HIGH

Focusing on what is essential is a powerful ability, perhaps the most powerful in a world where we are so bombarded with distracting ideas, information and opinions.  Know how valuable your time is.

As Bill Gates has written, “No matter how much money you have, you can’t buy more time. There are only 24 hours in everyone’s day. Warren has a keen sense of this.

He doesn’t let his calendar get filled up with useless meetings. On the other hand, he’s very generous with his time for the people he trusts. He gives his close advisers at Berkshire his phone number, and they can just call him up and he’ll answer the phone.”

Focusing on what is essential is a powerful ability, perhaps the most powerful in a world where we are so bombarded with distracting ideas, information and opinions. However, if we want to consistently give our energies to what is essential we need to develop both kinds of focus.

Only in this way can we answer with confidence the question, “What’s important now?”

Biography Ø Greg McKeown is the author of Essentialism: The Disciplined Pursuit of Less.

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GLOBALISATION OF BUSINESS

Global DELUSIONS How well do big companies leverage their global reach?

Many companies are described as global.

Some even claim to be “born global”.

But few are truly global.

Cyril Bouquet and Jean-Louis Barsoux

How well the company leverages what it knows and the talent at its disposal have become key indicators of an organization’s global credentials.

W

hen the term "global company" first gained currency – with the wave of mostly US-based multi-national corporations post-1950s – the definition was straightforward. It was based on the percentage of sales outside the home country and the spread of international operations. They were global by virtue of their high foreign direct investment.

The 1990s saw a surge of mergers and acquisitions designed to boost the global presence of large corporations: starting in the US-Europe-Japan triad, with the likes of Sony and Columbia Pictures, Pharmacia and Upjohn in pharmaceuticals or Daimler-Benz and Chrysler in autos; and later worldwide, with India’s Mittal absorbing Arcelor in the steel industry or China’s Lenovo buying IBM’s PC business and Geely acquiring Volvo.

While such deals may confer instant global status, it may be a long time before the corporations can claim that their organizational functioning is truly global.

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In parallel, the advent of the internet has enabled startups to gain express access to markets across the world (as in the case of Skype). The lengthy internationalization of established multi-national corporations has been compressed to the point where some claim that it is now possible to be “born global”. In fact, the internet has rendered meaningless the idea of international reach as the hallmark of a global company.

The New Global The definition of a global corporation has evolved. Now, rather than emphasizing where a company operates, we are more concerned with how it manages and structures its worldwide activities.1 The challenge is not only to push, but also to pull: companies must learn from their network of operations and partners across the world. How well the company leverages what it knows and the talent at its disposal have become key indicators of an organization’s global credentials. Many international corporations suffer from systematic biases on both fronts.

Selective attention to markets For companies that have a long history of success by focusing attention on their home or regional market, switching attention to a more global level is bound to present problems. Even if the company can get over its home base fixation, it may still not give individual markets the attention they deserve.2 Some markets are simply off the radar – and weak signals emerging from those areas tend to be dismissed as “noise”. Companies typically focus too hard on the high profile strategic markets at the expense of opportunities and insights from peripheral markets. They tend to follow the herd into “hot” markets or else let past performance dictate which signals are heeded.

As one country manager told us, “Nobody at HQ wakes up wondering about what we can learn from Canada today.”3 26

To get the most out of our global presence, we need to harness the best practices and innovations bubbling up across the organization and to invest in the most valuable opportunities. This means thinking about how we allocate our attention to different units and markets worldwide.

There is no easy way to devote the right attention to the different sources of information, but we can at least make sure that multiple “attention channels” exist so that important new insights are more likely to come into view.4 For example, the Dutch firm Irdeto, a leading player in media content security, took the radical step of creating a second head office in Beijing in order to force a change of mindset.5 The move dispelled the “mothership syndrome”, whereby everything – including customers, product development and employees – was seen from a European perspective. Through structure, organizations create information channels, they create positions, as well as processes and teams that increase the salience of the information located in those different places.

Tunnel vision on talent A closely related problem – in that it inhibits receptiveness – is of course the lack of C-suite cultural diversity. All too often companies claiming to be global count barely any foreigners in the senior ranks. At an organizational level, the biggest obstacle to developing a global mindset is the widespread perception that access to opportunities is driven by nationality. New entrants quickly get a sense of “who gets promoted around here.” There may be little incentive to try to develop a wider perspective if there appear to be limited opportunities for anyone from outside the parent country or its close neighbours.

Typically, there is a significant time lag between establishing a global presence and trying to globalize the top team. An interesting counterexample is the Lenovo group.6 Since acquiring IBM’s PC division in 2005, the

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References

The definition of a global corporation has evolved.

Now, rather than emphasizing where a company operates, we are more concerned with how it manages and structures its worldwide activities. company has used its multicultural leadership team – seven of Eastern and five of Western origin – to reflect and accelerate its global ambitions. Building a cosmopolitan top management team sends a powerful message that the center no longer regards itself as the source of all knowledge and influential ideas. Although founded in China, the PC maker has no official headquarters. Its top team simply gathers wherever it makes most sense, often in the fastest growing markets (recently in South Africa).

Of course, if “passport blind” is the metric, then few companies claiming to be global would even qualify.

In reality, the perception of openness to diversity can be achieved with relatively modest levels of overseas representation. It’s about sending signals to the organization that anyone can reach the top. According to Irdeto’s CEO, Graham Kill, leaders must ask themselves: “To what extent do people in the satellite operations really have opportunities to break through the ceiling to become part of the global fabric of the company?”7

Less Global Than We Thought Becoming aware of these organizational biases has become critical to competitive advantage. It is all too easy for corporations to take comfort from their global footprint and the global recognition of their brands. But to stay ahead they also have to leverage their global reach to develop new business models and mindsets which then feed back into their operations worldwide, including domestically.

Courtesy of IMD. This article is drawn from the forthcoming IMD book Quest: Leading Global Transformations.

1. Fang, Y., Wade, M., Delios, A. & Beamish, P. W. (2007). “International diversification, subsidiary performance, and the mobility of knowledge resources.” Strategic Management Journal, 28(10): 1053-1064.

2. Morrison, A. & Bouquet, C. (2011) “Are you giving globalization the right amount of attention?”

MIT Sloan Management Review, 52(2): 15-16.

3. Bouquet, C., Crane, A., & Deutsch, Y. (2009) “The trouble with being average,” MIT Sloan Management Review, Spring, 50(3): 79-80.

4. Bouquet, C. & Birkinshaw, J. (2008) “Weight versus voice: How foreign subsidiaries gain attention from corporate headquarters,” Academy of Management Journal, 51(3): 577-601.

5. Bouquet, C., Birkinshaw, J., & DuBrule, A. (2010) “Global growth at Irdeto (B): A dual HQ strategy,” IMD case series, IMD-3-2090.

6. Nie, W., Dowell, W. & Lu, A. (2012). In the shadow of the dragon: The global expansion of Chinese companies – and how it will change business forever (pp. 99-124).

New York: Amacon.

7. Graham Kill interviewed

by Paul Hunter (2010).

“Lessons from the top,” featured on IMD’s exclusive Corporate Learning Network “Wednesday Webcast” series, July 3.

Biographies Ø Cyril Bouquet is Professor of Strategy at IMD and Jean-Louis Barsoux is a senior research fellow.

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LEADERSHIP

N R A E L U O Y N A C A E B O T

Is it time for a CEO school to train leaders for the top job or is it even a profession one can be schooled in?

Stanislav Shekshnia, Kirill Kravchenko and Nadezda Kokotovic

A

participant of an INSEAD executive development programme recently challenged us to consider an interesting concept: "Your institution misses one very important programme – CEO school.

Running a company is a profession just like medicine or flying an aircraft. You should train for that." We had never thought of it as a profession. Intrigued, we decided to find out what people who professionally manage companies think of their jobs, whether they consider it's worth having occupational requirements for it, special curricula and, who knows, standard qualification exams?

Initially we wanted to interview a professional (not an owner) CEO of a company operating globally from each of the G-20 countries, but later we expanded our sample to owneroperators from the same countries to get their perspectives. We were privileged to speak to such distinguished business leaders as Jeff Immelt of General Electric and Bob Dudley of BP, but also to lesser known, but equally remarkable, CEOs globally, such as Vladimir Rashevsky of SUEK, Russia, Diego Bolzonello and Mario Moretti Polegato of Geox, Italy and José Ángel Sánchez of Real Madrid, Spain among others.

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The study provided us with some unorthodox insights, not only into the original research question, but also the qualities and competencies CEOs consider necessary for the top job and where they get them from.

No exams please!

Let us begin with the point every leader we interviewed agreed upon on the question of what a theoretical CEO school should look like – there should be no CEO exam. None of the experts believed anyone could be qualified enough to administer such a test, nor could there be a standard ‘CEO curriculum’. “I think it’s hard to test for that. A test would be backward looking and CEOs are always about how you become more forward looking,” Jeff Immelt told us.

CEOs jobs are very situational. The person ready to run BP most likely will fail as a CEO of SUEK, or a CEO of Real Madrid, the Spanish soccer club. As Vladimir Rashevsky said,”It would be wonderful to have a renaissance man with the complete range of necessary skills and knowledge, but such a person simply does not exist, so on each occasion you have to try and find the most suitable person for a particular company.”

Also, no one can qualify as a CEO for life – business requirements change quickly and an executive who was fully adequate to run a business a few years ago may become obsolete if the situation changes and he or she does not develop. All CEOs we talked

Business leaders we spoke to praised universities, not for targeted professional skills obtained, but for developing general intelligence and such competencies as analytics, logic and systemic thinking.

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to agreed that their jobs required life-long learning rather than standard curricula and entry exams. But they also agreed that there were some essential traits and competencies fundamental to CEO success. Although they used different language, our interviewees spoke about naturalborn qualities, knowledge acquired through formal education and competencies developed on the job as three foundations for an effective CEO.

Are CEOs born or made?

As Diego Bolzonello explained: “You are born with some of it, but you also must learn it.” The CEOs also distinguished between what it takes to

become a CEO and what makes them effective on the job. Qualities such as curiosity, ambition and passion are considered indispensable traits, while formal education and on-the-job training are also considered essential complements.

Business leaders we spoke to praised universities, not for targeted professional skills obtained, but for developing general intelligence and such competencies as analytics, logic and systemic thinking.

Diego Bolzonoello of Geox said, “Analysis is very important and that you get from the school.” Research supports this point – welleducated CEOs are better able to find and process information and are more adaptive to changes (Hitt and Tyler, 1991; Wiersema and Bantel, 1992; Wally and Baum, 1994).

Should we open a CEO school?

Business schools should at least look at their curricula to see if they teach subjects relevant to future CEOs – developing vision, selecting talent, enabling performance, managing in crisis,

communicating with the whole organisation, personal discipline and efficacy, preparing legacy and managing succession, to name but a few.

Although there are bits and pieces of this in all major business schools, they are often buried in courses built around traditional disciplines such as strategy, operations, marketing, and organisational behaviour, and in over-complex frameworks and terms such as ‘cognitive maps’, ‘unambiguous signalling of intentions’ or ‘unconscious intrapsychic dynamics”. Development of future CEOs requires a competency-focused cross functional approach.

If business schools want to be relevant to CEO development they should start teaching things they have not traditionally taught. They should teach how to learn and unlearn at all stages of one’s career, how to be healthy, and how to find and maintain one’s style. Some schools are already experimenting in these areas and we will see more of these courses coming. But we would like to suggest that business schools seriously consider taking a step further and offer education in hard skills to complement the soft skills needed. They could partner with technical universities and provide training, not only in managing technology and/or services, but in state-of-the art or future technology and services.

It will make them much more attractive places for aspiring and acting CEOs. Last, but not least, business schools should help people thinking about the CEO’s job to assess their potential, make a data-based decision about that choice and develop a specific plan to achieve it. INSEAD and its Global Leadership Centre started on this road by developing assessment instruments, collecting and analysing the data of thousands of high-potential executives, conducting group and individual coaching sessions, and helping participants to prepare and implement personal development plans. To make it more relevant to future CEOs, this work should become more focused on the attributes the CEOs themselves consider critical to their success.

Courtesy of INSEAD Knowledge.

Biographies Ø Stanislav Shekshnia is an Affiliate Professor of Entrepreneurship and Family Enterprise at INSEAD. He is also the CoProgramme Director of Leading from the Chair, one of INSEAD’s Board Development Programmes, and a contributing faculty member at the INSEAD Corporate Governance Initiative. Ø Kirill Kravchenko is the CEO of NIS and Nadezda Kokotovic is the Head of Staff.

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THE GEORGIA WEBMBA

Getting to know the

Georgia WebMBA

Alexandra Skinner speaks to Faye McIntyre

The Georgia WebMBA is offered by six University System of Georgia schools. To what extent does this strengthen your value proposition?

– each school selects faculty with experience in teaching the

The Georgia WebMBA is unique in its consortium format. All

study, faculty receive training in online teaching prior to joining

professors teaching in the programme have doctoral degrees.

the programme and regular updates of those skills at annual

The vast majority have industry experience as well. Students

workshops. The quality of the programme is clear to our students

in the WebMBA benefit from working with the best faculty

– that is why we are rated number one in student satisfaction

from all six universities. These faculty are the best of the best

among 434 online MBA programmes by GetEducated.com.

Accreditation is not our goal – it is the result of excellence in curriculum, highly qualified and productive faculty, and staff that continue to innovate and improve the programme.

graduate course and experience teaching online. In addition to continued professional development in their chosen fields of

As one might expect, all course-work pertaining to the Georgia WebMBA is done online.

How important is this level of flexibility to current and potential students?

The level of flexibility of the WebMBA is essential to our students. Most are mid-career professionals who lead busy lives with both personal and professional obligations. Many travel extensively, and quite a few are based in other states

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THE GEORGIA WEBMBA

or countries. They don’t have time to drive to campus to

life experiences as you. Engaging with diverse students

take classes, yet they are committed to furthering their

in the WebMBA programme exposes students to diverse

education. As a recent graduate wrote “You have a very

cultures, thought processes and customs that will help

unique programme that was 100 per cent perfect for my

broaden their perspective on the world. That is vital in

lifestyle. If I had to go to class, I could never have done this

today’s global marketplace.

because I travel, a lot.”

You point to the fact that your graduate education is comparable to that of an on-campus MBA. How do you achieve this?

Given the current economic climate, selffunded MBAs are naturally price sensitive. How, therefore, do you keep costs down and still offer quality, in terms of faculty, teaching and delivery?

We invite only full-time, doctorally-qualified faculty to

The financial model for the WebMBA is built on collaboration

teach in the WebMBA – the same faculty who teach in our

among the six colleges of business. We each employ faculty

face-to-face programmes. The content of the WebMBA

who teach in the programme; we each have staff members

has the same high standards as on campus programmes,

who recruit for both on campus and online programmes. The

and we continually assess learning outcomes to facilitate

WebMBA has only one full-time director dedicated exclusively

continuous improvement. All of our MBA graduates receive

to the programme. All other staff are part-time employees

a degree that says Master of Business Administration,

who are associated with one of the six universities.

regardless of whether the delivery format was online, on campus, or at a branch campus.

Our virtual classroom reflects real-world working

The Georgia WebMBA provides an excellent quality programme at a reasonable price, as much as one-third or one-quarter of many competitors. Our goal is not to be the

environments perhaps more so than most traditional

cheapest MBA programme, but to be the best. Our value

programmes. The person sitting in the office next to you

proposition is clear and consistent. The programme has

is probably not going to have the same background or

received a Best Buy designation by GetEducated.com for many years, and our cost structure of just under $21,000

The content of the WebMBA has the same high standards as on campus programmes, and we continually assess learning outcomes to facilitate continuous improvement.

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is substantially below the average of $37,011 for AACSB accredited schools. An additional note is that all students pay the same tuition, regardless of their location – in Georgia, other states or other countries.

Kindly walk our readers through the admissions process.

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THE GEORGIA WEBMBA

To be considered for admission to the Georgia WebMBA,

the programme has included individuals from 31 US states

applicants must have a bachelor’s degree and at least two

and six countries. Several of our students have been active

years’ of professional business experience. Each applicant

military personnel stationed in locations such as China,

applies to one of the six WebMBA colleges of business and

Afghanistan and Iraq. We have students from global and

must meet the admissions criteria for that college: GMAT

national companies, students from smaller businesses with a

and GPA minimums (overall and upper division), GMAT

more local or regional focus, and students from non-profits,

waiver conditions, pre-requisites, admissions formula and

governmental agencies, and educational institutions.

experience. Each college has an MBA director to assist

We leverage this mix to create an interesting and dynamic

with the application process.

online classroom environment.

Once admitted, WebMBA students from all six

together throughout the entire programme – ten courses

We have long talked about the value of accreditation, and the Georgia WebMBA can boast AACSB accreditation. How important is this third-party validation to potential students and employers?

over five semesters.

All six WebMBA colleges of business are fully accredited

colleges are pooled together and divided into cohorts of approximately 30 students each. Students form teams prior to the programme start, and the team works

by AACSB International (Association to Advance

If an applicant is lacking the requisite academic qualifications or experience, will they still be considered for enrolment?

Collegiate Schools of Business), a recognition held by

For students who lack an undergraduate degree in

programmes and is a key competitive advantage for the

business, we offer self-paced modules to help meet some of

WebMBA. Accreditation is not our goal – it is the result of

the prerequisite requirements. Admissions committees at

excellence in curriculum, highly qualified and productive

each school determine applicants’ eligibility. All applicants

faculty, and staff that continue to innovate and improve

can be considered for enrollment; that does not, however,

the programme. Students and employers look for third-

guarantee admittance into the programme.

party evaluations such as accreditation and rankings,

Please tell us more about the typical profile of your MBA classes.

validate quality. Other indicators of success include a

Most students in the WebMBA are mid-career professionals.

recommendations from those who have gone through the

However, there is much diversity among students, with some

WebMBA. They provide the best endorsement since they

bringing in 30 plus years’ of work experience. Since 2013,

have experienced the programme!

fewer than five per cent of business schools worldwide.

AACSB is the gold standard for quality in business

like those of GetEducated.com and CEO Magazine, to graduation rate of over 90 per cent and numerous positive

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The Wider MBA Market

Each of the six colleges of business offer career

In trying to produce effective managers and the business leaders of the future, ethical, social and environmental concerns have been high on the list of many business schools. To what extent has the Georgia WebMBA integrated the aforesaid points into its MBA offering and how important is the triple bottom line – people, planet and profit – to today’s high potential managers?

services (and other student services as well) to professionals, career services have not been a major request or expectation.

The Future

Profit has always been a key consideration for managers;

What developments can we expect from the online MBA market over the next 12 to 18 months and beyond?

the emphasis on ethical, social, and environmental

The market for online MBA programmes will

considerations has added to the rich discussions of what

continue to increase. As working professionals reach

are appropriate strategies in today’s world. Faculty teaching

out for educational opportunities and as companies

in the WebMBA use a variety of tools such as case studies,

demand graduate degrees from applicants, the need

simulations, discussion boards, etc. that incorporate both

for flexible programmes will expand. Those like the

quantitative and qualitative rigour to facilitate evaluation

WebMBA that offer quality education from accredited

of complex situations, assessment of risks and development

institutions can expect to grow, but with increasing

of an appropriate course of action. These topics are clearly

competition. Programmes without third-party quality

articulated in our learning outcomes, and we regularly

verification such as accreditation or without name

assess how successfully students achieving these outcomes.

brand recognition may find the market more difficult.

How important is it for universities and business schools to provide students with career services in today’s economic climate, and what efforts do you have in place to this end?

Several of our students have been active military personnel stationed in locations such as China, Afghanistan and Iraq.

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students. Since most WebMBA students are working

Biography Ø Faye S. McIntyre, Ph.D. is Dean and Sewell Chair of Private Enterprise, Richards College of Business, University of West Georgia. The Georgia WebMBA® is offered by University of West Georgia, Columbus State University, Georgia College & State University, Georgia Southern University, Kennesaw State University and Valdosta State University.

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AUSTRALIAN INSTITUTE OF BUSINESS

Faculty TOP CLASS

to get you to the

TOP OF THE CLASS

Australian Institute of Business (AIB) prides itself on its practical, work-based qualifications that highlight the fact that experience is the most effective teacher for students in the real world.

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cademic theory and professional experience are so greatly integrated at AIB, that each lesson learnt by students is drawn from and applied to real-world organisations.

While many facilitators struggle with the challenge of making content ‘real’ for students, teaching faculty at AIB aren’t limited by the number of real-life examples they can provide, as they have lived and breathed the subjects they’re facilitating.

AIB’s facilitators hold not only the academic qualifications that count, but also the years of experience in industry that allows them to showcase real-life examples with their students, teaching valuable life lessons from their experience in the field.

With experience in making the decisions and dealing with the problems students face every day at work, AIB’s facilitators have the knowledge and advice that supports students in their career every step up the corporate ladder.

The result is that students become active participants in the learning process, encouraged to bring their own professional and life experience to the discussion so that learning from each other with the support of their facilitator becomes the norm.

Whether studying on-campus in Australia or at one of AIB’s 12 international Teaching Centres, students of all AIB’s qualification levels can trust their facilitator will provide the insight, expertise and diverse breadth of knowledge that has immediate applicability.

AIB’s facilitators have the knowledge and advice that supports students in their career every step up the corporate ladder.

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This is one of the things that makes AIB the ‘practical business school,’ and what makes its teaching faculty worldclass leaders who are able to provide AIB students with the first-hand knowledge and expertise to make change for their organisation and their country.

Nichola Harvey Facilitator, CTS College of Business and Computer Science Head Business Operations – NGOSS Programme at TSTT Bachelor of Science (Sociology and Management) MBA – UWI Institute of Business Nichola has a rich history of corporate experience, holding qualifications across human resource management, change management, organisational development, organisational effectiveness, business process re-engineering, public relations and broadcasting.

Currently a youth advisor on the executive team of WABY (We Are Better Youth) and founder of the WABY Says YES!!! (Youth Entrepreneurship for SelfEmpowerment) programme, Nichola is following her passion of contributing to the mental, spiritual, physical and social development of young people through this non-profit organisation.

Annie Andrews Facilitator, SITAL College of Tertiary Education Executive Masters (Dist.) in Business Administration Annie holds more than 15 years of industry experience in human resource management, as a senior human resource manager. She has held various management positions in finance (banking and insurance), corporate marketing, tourism development, and training and development and tertiary education sectors over the past 25 years.

A strong believer in lifelong learning, continuous education and the pursuit of higher academic involvement, Annie is renowned for her diligence, knowledge, compassion and commitment to students’ success.

She demonstrates this by giving individual attention to students and applying her practical professional experiences within the marketplace to increase lessons gleaned from the coursework within the BBA and MBA programmes.

Kenn Dolan Facilitator, AIB Adelaide campus Managing Director and Management Consultant, Ferguson Project Management Services Master of Project Management – The University of Dundee Bachelor of Civil Engineering –

Using education to benefit a country For course facilitators Nichola Harvey and Annie Andrews, facilitating AIB’s work-applied courses at an AIB Teaching Centre in Trinidad and Tobago was part of a greater cause to make positive change in their country.

By offering training that is relevant to developing areas of the economy, both facilitators hoped to improve the country’s workforce by teaching skills that could be applied directly to the world of work.

“I found that as a country we were producing many educated and ‘degreed’ persons, but they were coming into the organisation without practical skills that they can immediately use in the workplace,” Nichola said.

Annie also saw a need for the education and training of working adults, finding the path for young students through four years of university to be inadequate to meet the country’s growing needs.

“I understood the need for persons to be exposed to that practical approach, because the country was more involved in human capacity building, and needed to have that education developed very quickly,” she said.

Both facilitators quickly saw the immediate value their wealth of practical experience had at AIB – not only to help students learn the theory, but how to apply their newfound knowledge to their professional role.

“When I seek to explain something I can refer to having done it, having seen it done, having seen the outcome, having seen where some approaches work and some didn’t,” Annie said.

“I can use this to share with the students who, beyond the book and beyond their paradigm, may not have the experience that will allow them to bring the concept, the principles, the information and the slides to life.”

Applying passion and theory to business With many years’ experience in their respective fields, AIB course facilitators Dexter Emrit and Kamla Rampersad de Silva know how to engage their students with examples from their professional experience.

Dexter’s passion for leadership and more than 18 years of experience in human resources roles across industry have led him to write three books on the subject, and while

The practical learning model far exceeds the value of just providing specialised business knowledge to the student.

Imperial College London An in-demand management consultant, project manager and public speaker, Kenn has extensive experience advising clients in the financial, IT, defence, resources, construction and public sectors around the world.

With qualifications including a Masters of Project Management and a Bachelor of Engineering, Kenn has studied and worked across five continents and is today sharing his expertise with students at AIB’s local Australian campus, where he has been facilitating for almost two and a half years.

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he believes that “everything rises and falls with leadership,” he rates most of the world’s leaders poorly.

“I believe that leaders are really servants, but which leader really serves his constituents? Most serve themselves,” Dexter said.

“My motto is to be a leader you must put others before you. Leadership is the oxygen of an organisation, and if the leadership is poor, people will suffocate, and the organisation may die,” he said.

“I always tell my students if they want to be true leaders, they must serve their stakeholders before they serve themselves. They must crown the organisation, not themselves. They must have humility, yet professional will to make a difference/dent on the universe.”

Similarly, Kamla’s passion for change management has allowed her to have a scrupulous eye when it comes to analysing business – and through facilitating the AIB programme she’s watching her students do the same.

“A lot of the challenges facing business are a result of people doing the same things in organisations over and over again – sometimes because people want to stay with what is familiar, but very often it is because they don’t understand what needs to be changed,” Kamla said.

“The challenge is compounded by the fact that they are not able to envision what the future can look like, nor are they able to design new systems and processes to achieve different results,” she said.

“The practical learning model is ideal in this instance because it takes the student on a journey through their organisation with new eyes where they have a better understanding of what an effective organisation looks like based on their studies.”

According to Kamla, this adds immediate value for students because it encourages them to demonstrate the ability to critically analyse their organisations, identify the weaknesses in specific areas and make recommendations based on proven research.

“It is very fulfilling to see the growth which takes place in students when they begin to recognise the gaps and inconsistencies in their work processes and develop the confidence and competence to fix it,” she said.

Dexter Emrit Facilitator, CTS College of Business and Computer Science HR Consultant MBA (HRM) – School of Business and Computer Science Bachelor of Management – School of Accounting and Management Advanced Diploma in Business Studies (A.B.E.) With more than 15 years working across industry, Dexter holds extensive experience in human resource management roles both at the operational and strategic level.

He has played a key role in changing culture at many of the organisations he’s worked at, creating a blend of discipline, results, accountability and high employee satisfaction.

Currently a human resource consultant, motivational speaker, lecturer and author of three books on motivation and self-development, Dexter incorporates his varied professional experience into his lectures, motivating his students to excel.

Kamla Rampersad de Silva Facilitator, CTS College of Business and Computer Science Primary Consultant, De Silva Management Consulting Services Ltd Couva MBA (International) – Arthur Lok Jack Graduate School of Business Bachelor of Law – University of London An experienced management and leadership consultant, manager and lawyer, Kamla’s impressive professional portfolio includes broadcasting, general senior reporting, change management and transformation, lecturing law on a part-time basis, and more.

The primary consultant in her own management consultancy business, Kamla has assisted in the planning and implementation of various projects in the public sector, with all contributions reflected in her professional philosophy of ‘transforming lives by helping organisations become more effective and efficient’.

Michael Chant Facilitator, AIB Adelaide campus CEO, Life FM MBA – AIB International Advanced Diploma (Administrative Management) – Institute of Administrative Management UK Bachelor of Business – University of South Australia Michael’s career history spans senior positions at several of Australia’s leading not-for-profit organisations, including his current role as CEO of Life FM, Adelaide’s only Christian radio station.

With a host of qualifications including an MBA from AIB, Michael shares his key skills and business acumen from both inside and outside the classroom while facilitating Leadership, Strategic Operations and Final Project workshops at AIB’s local Australian campus.

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Paul Moroney

Practical learning: a better way for the world

Facilitator, Leadership and Strategic Operations, AIB Adelaide campus

The value of AIB’s practical learning model particularly appeals to course facilitators Paul Moroney from AIB’s local Australian campus and Dr Taher Hamed from the Teaching Centre in Egypt.

With more than 25 years of experience in industry, Paul has been facilitating at AIB for eight years, saying the initial appeal for him was AIB’s practical learning model.

“I saw that as a particularly effective way of studying because it not only gave students specific knowledge about an area, but it also helps people learn how to apply it for themselves in their workplace even when it’s not in a study context,” he said.

Dr Taher Hamed, a change management advisor with more than 15 years of experience at senior management level, has also seen the applicability of work-applied learning across industry.

“After working with AIB in Egypt, I found all the subjects are very advanced and relevant to today’s business environment, both globally and in our region,” Dr Hamed said.

“The practical learning model far exceeds the value of just providing specialised business knowledge to the student – it provides important career and professional life skills to the student which they could not otherwise acquire through their conventional undergraduate studies,” he said.

“Those kinds of career and professional life skills have become crucial for any executive, not only to step up the career ladder but to maintain employment in a tough business world.”

Paul agrees, saying his teaching method is a combination of making work that is as practical as possible, as this helps students to learn better because their engagement levels are far stronger.

“The most powerful thing that we offer to people is their ability to learn what other people have done, learn what theories exist, and take that as their base knowledge before trying to solve problems in their own organisation,” he said.

“Therefore the quality of the decision they can make is far higher than it would have been if they didn’t know how to do that.”

Managing Director, Active Operations Management Australia Director, Optimatics Holdings Limited MBA – Australian Institute of Business Bachelor of Arts (Accountancy) – South Australian Institute of Technology Paul has more than 25 years of experience in the fields of finance, programme leadership, operations and general management, working in manufacturing, telecommunications, banking and business process outsourcing.

For the past 10 years he has been Managing Director of Active Operations Management Asia Pacific, a business he started (based on IP from the UK), which has a turnover approaching A$10m.

Taher Hamed Facilitator, American Academy for Training Courses (AATC) General Director for the Middle East/Africa Region at Amplifon Siemens Medical Hearing Aids and Cochlear Implantation DBA (Organisational Behaviour Studies and Human Resources Management) – Arab Academy Graduate School of Business MBA (Change Management) – Arab Academy Graduate School of Business Bachelor of Pharmacy – Cairo University Diploma of Total Quality Management A change management advisor with more than 15 years of experience at senior management level, Dr Hamed has previously held positions at various local and multinational organisations including USAID – Egypt, Johnson & Johnson and Bristol-Myers Squibb.

With significant experience teaching across the Arab Academy Graduate School of Management and American Academy, Taher is currently delivering the Strategic Management and Globalisation of Enterprise subjects on the AIB MBA at AATC.

I believe that leaders are really servants, but which leader really serves his constituents?

Most serve themselves. Ø Australian Institute of Business is a 25 year old business school based in Australia, offering degrees, undertaking research, and providing consultancy services globally. AIB was the first, and remains the only, private institution in Australia to be government approved to confer the full suite of business degrees, including the prestigious PhD.

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DECISION MAKING

PRINCIPLES for making BETTER DECISIONS

“The road to hell is paved with good intentions” says the proverb. Such good intentions are sometimes dashed by bad decisions, but we can improve our ability to choose the best path...

Pan Pan

T

oo few options is clearly not a good thing, but too many good choices can be just as great a bane. Many healthy and wealthy residents of the rich world are overwhelmed with options and attractive choices, yet find themselves unhappy and anxious.

The paradox of choice is illustrated by a famous story told by Jean Buridan. The fourteenth-century philosopher and Catholic priest wrote extensively about free will and the inability to choose due to excess uncertainty and, potentially, excess choice as exemplified by Buridan’s ass: An apocryphal donkey finds itself standing between two equally appealing stacks of hay. Unable to decide which to consume, it starves to death.

Changes in technology and innovations such as smartphones and tablets only exacerbate our plethora of choices. Constant connectivity and the overconsumption of real-time data and social media can leave little room for self-reflection and rest, making it more difficult to make decisions that can ultimately lead to decision fatigue and potentially paralysis.

Yet life is about making choices. In my last blog post, I wrote about how working backwards from your ideal goals can help you put meaning in your career. The exercise was meant to give some guiding principles to make decisions one

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can stand by today. So what are the things one can do to make better decisions? Below are some principles I have found useful:

Distinguish between real options and false options.

It may sound simple, but sometimes it may seem like we are faced with endless choices, but when you examine them carefully you realise they are not as realistic as you think. In fact, you probably face far less options than you think. Case in point: A friend of mine wants to change jobs but says there are so many jobs he can do he doesn’t know which one to choose. Asked to show one solid job offer he can accept and he comes up empty handed.

Differentiate between risk and uncertainty.

Risk means that event probabilities are known.

Uncertainty means that the probabilities are unknown. One can make calculations with risk and decide whether or not to take a gamble, but not with uncertainty. Unfortunately, most life decisions involve uncertainty rather than risk (which is generally limited to casino games, coin tosses and statistics textbooks). We must learn to make decisions with imperfect and incomplete information.

Some frameworks and heuristics for modelling, such as decision-making, actually exist. One example is the Markov process, named after the Russian mathematician Andrey Markov, and another is the optimal stopping rule (choosing a time to take a particular action to maximise reward and minimise loss), first introduced with ‘the secretary problem’ for example.

Draw up your ideal criteria before looking at available options.

Write down what you do not want to pursue in life – it is often easier to come up with what you do not want rather than what you do want to do.

Take time to sit down and think hard about this so you only need to do it once. This will save you time and energy later when you consult the list to help you eliminate choices quickly.

Don’t forget the past, but let go of it.

One of the first things we learn on the MBA is the sunk cost fallacy, and it is good to be reminded of it. Rational decision-making asks us to disregard the costs incurred to date, no matter how much you have already invested – monetarily or emotionally. Only the assessment of future

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costs and benefits count. Learn to close doors, only then can you open new windows. Forgive and forget, but keep a list of names! Except for drawing useful lessons, the past is a sunk cost.

The above four points are rational advice. But we are emotional beings and life is not a multiple choice test but full of ambiguity and contradictions.

Above all, it is essential to take decisions that you believe in: Do not be trapped by the noise of others’ opinions and dogma; have the courage to follow your convictions. Come up with your own guiding principles and create your own path.

Our time is limited. Don’t waste it. The status quo is not an option. Steve Jobs said remembering his mortality was the most important tool he’s ever encountered to help him make the big choices in life and avoid the trap of thinking that one has something to lose.

Courtesy of INSEAD Knowledge.

Do not be trapped by the noise of others’ opinions and dogma; have the courage to follow your convictions. Come up with your own guiding principles and create your own path.

Biography Ø Pan Pan is Founder and Managing Partner of Pantèra Ventures. She has an MBA from INSEAD (’03).

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SALES TACTICS

One definition of trust is: my expectation that you have my best in mind. What happens to that expectation when he or she spots your tactic? That’s right, trust gets obliterated. Gone.

Nowhere to be seen.

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any companies and individuals put too much faith in the magic of tactics, and apply them indiscriminately without fully understanding the balance of risks and rewards.

“1. Open enthusiastically” “2. Use the customer’s name as often as possible” “3. Ask three questions that all have a YES response” “4. Create urgency” “5. Test-close” “6. ...”

Her complexion turned fluorescent red as it dawned on her what I had found. Right there, next to her computer, in full view of the customer (i.e. me) was her deepest secret – the list of tactics she was using to ‘sell’ me.

Over the next few seconds she gave me a very creative explanation for how the document had, in fact, nothing to do with sales, tactics or manipulation. She managed to explain all this while simultaneously laughing nervously, and awkwardly moving the document into her desk drawer.

It was too late. She knew it and I knew it. And now it became very hard for her to follow her script.

Sales person: “What are you reading there?”

I was half way through the document when the sales person interrupted me with her question.

She had been busy completing my booking, but now appeared finished and directed her attention away from the computer and towards me.

Negotiator: “I’m reading this document labelled ‘sales tactics’ for use with our customers. I have to say that you did indeed open very enthusiastically.”

Sales person: “You better lock in these prices before they increase!”

Negotiator: “Are you creating urgency now?”

Sales person: “Um... yes...”

Many people consider tactics that can give you an invisible and unfair advantage over the other party strangely alluring. Just as with magic tricks,

When I found the Salesperson’s

SCRIPT Filip Hron

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the uninitiated victim will predictably fall for the same tactic over and over again. That is, until the victim learns how the trick works. From that point, the tactic has been rendered ineffective.

The magic is gone. And in the place of a great illusionist now stands a simple con man.

The likelihood of these tactics working is diminishing by the day. Not only is the average customer today more educated about tactics as a result of their blanket use by sales people, real estate agents, health fund consultants, and advertisers (to name just a few), but the professional negotiators you will deal with are likely to have intentionally studied many or all of the tactics that you plan to throw their way. These tactics are so common that hundreds of them already have established names; anchoring, bait and switch, nibble, bogey, foot in the door, defer to higher authority...

No one likes a manipulator Using a tactic only to discover that it is ineffective is not the real problem here. Let’s for a second look instead at the impact of the other party realising that you are using a tactic on them.

“How many of you enjoy being manipulated?”

I ask the participants in a negotiation workshop.

No one puts a hand up. In fact, to this day I have yet to see even a single person put a hand up in response to me asking this question in a workshop!

When someone catches you using a tactic, then they also catch you trying to manipulate and take advantage of them. What does that do for trust? One definition of trust is: my

expectation that you have my best in mind.

What happens to that expectation when he or she spots your tactic? That’s right, trust gets obliterated. Gone. Nowhere to be seen.

Don’t get me wrong. There can indeed be rewards associated with tactics when these are used carefully at strategic points in selected negotiations. However, the problem with tactics today is the indiscriminate over-use by people and organisations who expect magic results but who don’t fully understand the associated risks with tactics.

Unfortunately there is nothing magic about tactics. Well, apart from how quickly they can make trust vanish into thin air.

Courtesy of INSEAD Knowledge.

Biography Ø Filip Hron is a consultant and lecturer on negotiation. He is also the author of Negotiation Evolved.

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MARKETING

How to Market a

REVOLUTION Every so often, an innovative product fails to achieve widespread adoption because companies don’t connect the dots for consumers.

Markus Christen and Benjamin Kessler

I

t has been 15 years since the DVR (digital video recorder) debuted to much fanfare at the Consumer Electronics Show in Las Vegas. It was instantly hailed as a revolutionary innovation, a paradigm shift like none yet seen in the halfcentury-old TV industry. If adopted widely, it had the potential to transform TV audiences from passive channel-surfers into programmers of highly personalised experiences, through its ability to record and play back analogue TV signals.

Having captured the attention of the industry, DVR soon went on to capture the public imagination by giving it a brand to latch onto: TiVo. After blanketing the airwaves with commercials featuring an empowering slogan (“TiVo: TV your way”) and a mass-market-friendly logo, the brand became a household word. With the public apparently ready to make the technological leap, DVR seemed poised to break through in a big way. Technology market research firm Forrester predicted that by 2005, more than half of American households would have DVR.

TiVo got the customers’ attention, Netflix got the customers’ business.

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A decade and a half on, reality has yet to catch up with these initial predictions. At the end of 2012, DVR had penetrated 41 per cent of TV-owning households in the U.S.; current predictions have the technology achieving 48 per cent penetration by the end of 2017.

During the second quarter of 2013, “time-shifted” viewing (i.e. DVR or video-on-demand use) accounted for only 8.6 per cent of total viewing hours in the U.S., according to Nielsen statistics.

So where did the sector fall short? Assuming initial estimations of DVR’s potential had some truth to them – and the rave reviews of early adopters suggest they did – why has its market penetration lagged behind such comparatively dull products as DVD and Blu-Ray players? I explore these questions in my INSEAD case study “Digital Video Recorders: Starting a TV Revolution?” The lessons here apply to all companies that have accomplished, or seek to accomplish, possibly market-upending tech breakthroughs.

“Mousetrap Marketing” As the developer of the first commercially available DVR, TiVo fell victim to classic “mousetrap marketing” assumptions, as in the aphorism often ascribed to the 19th-century American writer Ralph Waldo Emerson: “If you build a better mousetrap, people will beat a path to your door.”

Even when an innovation is truly revolutionary, it should not be marketed as such. Market your revolution in carefully delineated stages, always with reference to what the consumer is already familiar with.

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The mousetrap mindset clearly drove TiVo’s massmarket approach in its early days. The firm spent heavily to reach as wide an audience as possible, with blind faith that getting the word out about this great new product was all the strategic focus needed. TiVo’s 30-second TV spots left audiences with plenty of excited questions, but few concrete answers. For those, they would mainly have to head to electronics stores, the Internet being a less robust resource at the turn of the millennium than today.

As potential customers neared the point of purchase – brick-and-mortar stores – TiVo’s friendly brand message fell away, replaced by whatever message salespeople believed would sell the product. Not investing in education for salespeople was a key error, but perhaps TiVo never should have sought to sell millions right out of the gate. Being more focused on the target customer and distribution would have allowed for more control over the sales process, as well as given TiVo time to tinker with its marketing message and help viewers ease into the changes it was aiming to introduce. Believing the early hype about itself, the company overestimated the average consumer’s ability and willingness to buy into the DVR revolution.

Identity Crisis TiVo emerged at a particularly rocky crossroads period for the tech and media industries: Analysts agreed that TV’s conversion from analogue to digital was inevitable, if not imminent; the Internet had pushed through to mainstream consciousness, but the extent of its impact was not yet fully felt. In the absence of a coherent marketing message, TiVo’s growth was severely hindered by the uncertainties of the moment. Where DVR stood in relation to VHS was of particular concern for customers.

From a marketing perspective, there was a Catch-22: Positioning TiVo as a beefed-up VCR (as many salespeople did) risked underselling its coolest features, but pushing the advanced features such as commercial-skipping might have overwhelmed and intimidated consumers.

TiVo’s messaging was muddied further by the company’s stated bid to become “the operating system for your TV set”. Like an Internet service provider such as AOL, TiVo required users to pay for subscriptions on top of buying a device – so was TiVo a gadget or a service? And which household fixture was it designed to replace: the VCR or the computer, or both? Without a firm grasp on the value created by the new technology, consumers had no trouble performing a cost-benefit analysis, with an unfortunate outcome for TiVo. The high price point didn’t help matters either.

The first TiVo devices were US$499, not including an annual subscription fee of US$99. Then, as now, TiVo encouraged “lifetime subscriptions”, which do not cover, as one might assume, the lifetime of the consumer – but rather the lifespan of the TiVo device.

Given the technological uncertainty of the time, it’s not hard to see why likely buyers stayed away in droves.

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TiVo Today Even TiVo’s sole unequivocal triumph – its brand ubiquity – wound up working against it as rival manufacturers inked deals with pay TV operators and became serious competitors. Without a clearly established category with pointsof-parity (i.e., features that are shared by all category members) and points-ofdifference (i.e., features that allow you to stand out), the brand name entered common usage as a term for any DVR, causing a TiVo executive to complain, “People will know we talked about TiVo and think they have TiVo, [but will have] a generic product that isn’t even ours.”

But the good news for the firm is that, thanks to its partnerships with cable TV providers around the world, TiVo is in more homes than ever before – about 4.8 million, a far cry from the sorts of numbers bruited in the early days. And the company is trying mightily to regain its innovation mojo with its latest line of Roamio hybrid set-top boxes that can stream content to mobile devices.

Just as in 1999, TiVo has a daunting marketing challenge on its hands.

Advice for Innovators To avoid repeating past mistakes, TiVo, and by extension all ambitious innovators, should remember the three key obstacles to innovation adoption: the understanding gap, attractiveness gap, and behaviour change gap. Failing to bridge any one of these can lead to a fatal disconnect between company and consumer, no matter how great or beneficial the product. Bridging the gaps means finding clear, compelling answers to the following questions:  Understanding gap: What is it? What is it for?

Does it naturally fall into existing categories?  Attractiveness gap: What does it give/take away?

Is it easy to see or experience the value?  Behaviour change gap: What do I need to change?

How much change is required to get these benefits?

Who has to change?

Innovative products do not create the conditions for their adoption in the market; rather, market change is a process that must be managed. The contrast between TiVo and Netflix is illuminating. TiVo was more ground-breaking and visionary than Netflix, but the latter managed far better to keep the three obstacles low. Even when an innovation is truly revolutionary, it should not be marketed as such. Market your revolution in carefully delineated stages, always with reference to what the consumer is already familiar with. Points of reference are just as important in product design: The face that a product presents to the world should always be recognisable. TiVo got the customers’ attention, Netflix got the customers’ business.

Failure to manage the change process was a main cause of the eventual DVR let down. Unable to bridge the critical gaps for consumers on its own, TiVo could only gain adopters through (often economically unfavourable) deals with cable and satellite operators, its ostensible competitors. You could say that DVR was caught by its own mousetrap.

Courtesy of INSEAD Knowledge.

Biographies Ø Markus Christen is Associate Professor of Marketing at INSEAD and Benjamin Kessler is the Web Editor of the INSEAD Knowledge site.

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LIST OF CONTRIBUTORS

List of Contributors A

J

Australian Institute of Business

Jacksonville University

B

K

Benjamin Kessler

Kirill Kravchenko

E

M

École Des Ponts Business School Emad Rahim

Mark C. Crowley Markus Christen

G

N

Georgia WebMBA Greg McKeown

Nadezda Kokotovic

I INSEAD Knowledge

P Pan Pan S SBS Swiss Business School Stanislav Shekshnia

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