CEO-MAG.COM
THE SECRET TO STUDENT SATISFACTION
/
AUTUMN 2017
FOUR WAYS LEADERS CAN HELP PREVENT EMPLOYEE BURNOUT
WHY CORPORATE EARNINGS MATTER SO LITTLE TO AMAZON
93%
of our graduates had a job waiting for them when they completed their MBA, with virtually all securing a job within 1 year
86%
of our graduates received at least one promotion or changed jobs for increased salary
THE SPECIALIZED MBA. PROVEN EVERYWHERE. An MBA uniquely focused on pharmaceutical and healthcare business.
Leveraging almost 200 years at the forefront of the pharmaceutical industry, University of the Sciences delivers an MBA uniquely focused on pharmaceutical and healthcare business with: • flexible online, evening, and certificate programs • direct access to faculty, including former CEOs and senior industry executives who have their fingers on the pulse of the pharmaceutical and healthcare industries • small class sizes so you can interact and explore the business of healthcare collaboratively Whether transitioning to a new career or growing within your current field, investing in an MBA in Pharmaceutical and Healthcare Business from USciences pays satisfying long-term career dividends.
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usciences.edu/MBA_CEO
ceomag.co.uk / Spring 2016
TABLE OF CONTENTS
FOUR WAYS LEADERS CAN HELP PREVENT EMPLOYEE BURNOUT Mark Crowley
2017 MBA RANKINGS CEO Magazine
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REAL PEOPLE, REAL RETURNS USciences
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THE SECRET TO STUDENT SATISFACTION Mike Zeliff
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ceo-mag.com / Autumn 2017
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REWARDS AND RECOGNITION IN THE NET PROMOTER SYSTEM® Bain & Company
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AN INNOVATIVE APPROACH TO PROBLEM-SOLVING David Goodwin
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IS THE MBA A WASTE OF TIME AND MONEY? Bert Wolfs
LEADERSHIP LAPSES: WHEN IS FIRING THE RIGHT RESPONSE? Knowledge@wharton
ceo-mag.com / Autumn 2017
ceo-mag.com / Autumn 2016
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38 41
LEARNING FROM THE BEST Jeffrey Palermo
WHY CORPORATE EARNINGS MATTER SO LITTLE TO AMAZON Howard Yu
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SCIENCE SAYS YOU SHOULD TAKE A VACATION NOW Ed O’brien and Ellen Roney
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THE NEUROSCIENCE OF LEADERSHIP RMIT
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ceo-mag.com / Autumn 2017
— Design your future Make it your business to shape the world with an MBA from RMIT. To get ahead in today’s world of business, you need more than knowledge. We understand this, and that’s why at RMIT we collaborate with industry leaders from across the globe to create MBA programs that offer unique industry insight and experiences that go beyond the expected. So if you’re ready to embrace the future and challenge the old way of doing business, choose an MBA program that puts design thinking, creativity and collaboration first. RMIT is located in Melbourne, the world’s most liveable city.* Choose RMIT. To find out more visit rmit.edu.au/postgrad *Economist IU 2016
Aynur Cakal Executive MBA CRICOS: 00122A | RTO: 3046
TABLE OF CONTENTS 49 51 56
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11 LEADERSHIP GUIDELINES FOR THE DIGITAL AGE Liri Andersson and Ludo Van der Heyden
INSPIRED BY PUBLIC VALUE Martin Kitchener
LIST OF CONTRIBUTORS
ceo-mag.com / Autumn 2017
CEO Victor J. Callender Group Editor-in-Chief Alexandra Skinner Design & Illustration pentacreate.com Financial Controller Anthony Gordon
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Head of Production Steven Whitaker Features Writer Amber Callender
@ceo_mag
/CEOMagazineGlobal
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FOUR WAYS LEADERS CAN HELP PREVENT EMPLOYEE BURNOUT MARK C. CROWLEY
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ceo-mag.com / Autumn 2017
I
f you’re feeling stressed out, overwhelmed by all your job demands, or in constant distress over how many of your waking hours you now devote to work, you’re not alone. Burnout has become an increasingly serious problem in the American workplace - one that’s accelerating and causing profound harm to human beings and to the organizations that employ them. Perversely, many of us have come to think that burnout is a badge of honor, a hallmark, and even a requirement of success. But if we’re to listen to our pleading inner voices, the condition of our work lives today has become entirely unsustainable and in needing of an immediate fix. According to recent research, our feelings on the matter hold the greater grasp of the truth: We’ve reached a pivotal moment where we now must call out the key causes of workplace stress, and fully commit to mitigating as many of them as we possibly can. In 2015, Stanford Business School professors, Joel Goh, Jeffrey Pfeffer and Stefanos Zenios identified the top 10 stressors in the workplace today (e.g. long hours, job insecurity, excessive job demands and low social support at work), and studied how they impact employee and organizational health and wellbeing. Their conclusions were stunning: “Stressful workplaces contribute to at least 120,000 deaths a year,” the researchers found, “and nearly 8 per cent of the nation’s healthcare costs. Stress not only has a direct effect on employee health, it also induces unhealthy choices ranging from alcohol abuse, smoking and drug consumption.” (As confirmation, a JAMA study released in August shows that 1-in-8 American adults is now an alcoholic).
And it is companies, not just workers, that are paying dearly for all of this. According to the Stanford study, by looking away from the effects of burnout, business leaders have unwittingly driven higher attrition, lower engagement, and a tremendous loss in productivity. “This is costing organizations upwards of $125 billion per year.” It cannot be denied that work has always added stress to people’s lives. But as the Conference Board, Stanford and many other researchers have confirmed, it’s the newer workplace stressors that have the most potent and compounded effect of making people feel burned out. Here is a summary of what these modernday stressors are, followed by four specific remedies leaders can use to turn the tables on employee burnout and restore people, teams and organizations to optimal levels of performance: The Critical Few Causes Of Modern Day Burnout We Live In Scary Times We can’t blame the workplace for one of the key sources of human stress - the world we live in today. Our 21st Century society is increasingly challenging and often frightening when you factor in recent flareups with North Korea, Russia and China. Add in the contentiousness that pervades our political discourse, and the economics of trying to make a living and support a family, and you have people walking into work already filled with fears and concerns. People do their best to leave these stressors at the workplace door, of course, but in reality, don’t start off their days feeling balanced, stress-free and bringing their very best selves to work. Excessive Workloads And Work Days In response to the Great Recession, leaders flattened their organizations by requiring workers to do double-duty including having managers concurrently perform as individual contributors. As the economy rebounded, workloads weren’t significantly adjusted, and people are now working longer hours than ever. The average worker today toils 47 hours per week, with managers putting in closer to 60. Work-life balance has become but a theoretical construct for most people, especially those working for bosses who expect them to be available at all hours of the day, including weekends. What employees are feeling today is best summarized by the lyrics of legendary songwriter, Johnny Mercer: “Something’s gotta give, something’s gotta give, something’s gotta give.”
ceo-mag.com / Autumn 2017
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“Business leaders must accept that it’s time to restore a more humane way of working.”
Technology Means Our Days Never End It’s hard to believe that it wasn’t all that long ago when people finished their workday and went home to spend uninterrupted time with families and hobbies. With only a landline phone at their disposal, bosses weren’t in the practice of contacting employees at dinnertime or asking them to respond to questions on Saturdays and Sundays. 10
While the advent of technology has surely improved human lives in innumerable ways, it’s irrefutable that it has also eliminated traditional boundaries between work life and personal life. As author Adam Alter says in his book, Irresistible: “People are now bound to their workplaces 24 hours a day. Until recently, people left work behind when they left the office. But now, with the introduction ceo-mag.com / Autumn 2017
of smartphones, tablets and emails that find us wherever we are, that stopping rule is obsolete.”
least managers can do is let them go to the beach the other couple of weeks to fully renew their spirits.
Four Top Remedies For Workplace Burnout: It’s unreasonable, of course, to expect that all work-related stress can be fully eliminated. But organizations and leaders bold enough to implement the following four practices, will surely move the needle. Burnout can no longer be the chronic outcome of work that it is today, and there is nothing but upside for companies that choose to take action.
3. Actively And Broadly Develop People Workers today are not immune to ubiquitous reports saying that robots and automation will soon eliminate millions of jobs. These stories lead to the fear, and yet another stressor, that they won’t have the skill-set needed to quickly find a new job were they to lose the one they have. What workers of every generation want today is the opportunity to grow and develop. Fulfilling this need just happens to be a huge driver of employee engagement. But it also represents a powerful off-set to a stressful work life: the belief that they’re building a portable portfolio of skills that they can use to take care of themselves and their family under any scenario. Leaders must give people exposure, experiences, education and training. Everyone will be better-off for it.
1. Give People Back Their Productive And Renewal Time Business leaders must accept that it’s time to restore a more humane way of working. This means providing greater clarity on when is an appropriate time to send an email or text, and when work hours generally end. In the absence of these kinds of guidelines, leaders implicitly convey to employees that they must always be available. And this lack of clarity and thoughtfulness has proven to make people feel both resentful and overloaded. Another essential fix is to limit the time people can spend each week in meetings. By defining rules for when meetings can even be called (and when an email will suffice), you’ll not just hold fewer of them - you’ll give people back the productive hours many unnecessary meetings steal away. 2. Ensure People Get Real Time Off The single most important thing human beings can do to re-energize and increase productivity is to have time off. Despite this widely-known fact, Americans generally don’t take all the vacation days they earn, and when they do take a few days away, they bring work with them. Never really unplugging means that they’re getting no vacation at all. A chronic complaint from workers is that their bosses never seem to find the right time for them to be away, and passively pressure them into delaying - or even forfeiting - their earned vacation time. So, we’ve reached the moment when companies and leaders must step-up and insist that their people start enjoying the time off to which they’re entitled. Taking this one step further, managers must be clear in insisting that employees need not dial-in for calendared conference calls, or respond to emails. Calling people in emergencies is an appropriate off-set. Noting that everyone will be away from the office at some point, we must also teach employees how to effectively cover for coworkers, and how to keep up with their workloads. For 50 weeks a year, people slave away for their bosses and companies. The ceo-mag.com / Autumn 2017
4. Make “Caring About People” A Core Leadership Competency Ask a roomful of people to shout out descriptions of the best boss they ever had and the list will always look something like this: “They were kind and respectful.” “They believed in me.” “They coached, developed and appreciated me.” “Deep down, I felt like they cared about me as personally.” Whilst this type of leader is a rarity in business currently, it’s time that every American worker had a boss like this. These are the types of managers we now must mint. One reason for this is that bosses who demonstrate care for other people consistently drive greater performance. The test of this is to reflect on how committed you were while working for that “great” boss you had somewhere in your career. But feeling cared for also supports a human need that takes on even greater meaning when our lives can so often feel overwhelming: just knowing our boss has our back is deeply consoling. Some bosses are predisposed toward being this kind of leader. They relish in the success of others, and create work conditions that lead to human thriving. But even if a manager doesn’t have this natural inclination, we must now insist that they learn it. If we know anything at all about employee burnout, it’s that uncaring, unsupportive, self-focused and even toxic - managers only serve to make it worse. Perhaps the greatest improvement we can make to workplace burnout, therefore, is to require all managers to cultivate the ability to lead with greater heart - or get weeded out.
ACKNOWLEDGEMENT
While only one name shows at the top, this article was a joint effort. Leadership speaker & consultant, Mark C. Crowley, is the author of Lead From The Heart: Transformational Leadership For The 21st Century, now being taught at four American Universities. Connect with Mark on Facebook, Twitter @MarkCCrowley, or his website. Rebecca L. Ray, Ph.D. is Executive Vice President, Knowledge Organization; Human Capital Practice Leader At The Conference Board - a century-old non-profit business research firm based in New York. 11
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2017 GLOBAL MBA RANKINGS
he benefits attached to an MBA are well documented: career progression, networking opportunities, personal development, salary... and the list goes on. However, in an increasingly congested market, selecting the right business school can be difficult, which is far from ideal given the time and investment involved. Using a ranking system entirely geared and weighted to fact-based criteria, CEO Magazine aims to cut through the noise and provide potential students with a performance benchmark for those schools under review.
Weighting of Data Points (full-time and part-time MBA)
Quality of Faculty:
34.95 %
International Diversity:
9.71%
Class Size:
9.71%
Accreditation:
8.74%
Faculty to Student Ratio: Price:
7.76% 5.83%
International Exposure:
4.85%
Work Experience:
4.85%
Professional Development:
4.85%
Gender Parity:
4.85%
Delivery methods:
*EMBA Weighting: Work experience and international diversity are adjusted accordingly.
0%
5%
10 %
15 %
NORTH AMERICAN MBA RANKINGS American University: Kogod Appalachian State University Auburn University: Harbert Bentley University: McCallum* Boston University: Questrom Bryant University California State University-Long Beach California State University-East Bay California State University-San Bernardino Case Western Reserve University: Weatherhead Chapman University: Argyros Cleveland State University: Monte Ahuja College of William and Mary: Mason* Colorado Technical University Concordia University: John Molson DePaul University: Kellstadt Drexel University: LeBow* Fairfield University Florida International University Fordham University Georgia Institute of Technology: Scheller Georgia State University: Robinson Gonzaga University HEC Montreal Hult Internatonal Business School Kent State University Loyola Marymount University Lynchburg College Mercer University-Atlanta: Stetson Millsaps College Niagara University Northern Illinois University Oakland University Pepperdine University: Graziadio Queens University of Charlotte Rochester Institute of Technology: Saunders 12
**Online MBA Weighting: Delivery mode and class size are removed.
3.8% 20 %
25 %
30 %
35 %
TIER ONE
Saint Joseph’s University: Haub Saint Mary’s College of California Suffolk University Temple University: Fox Texas A&M University-College Station: Mays University of Akron University of Alberta University of Baltimore University of California, Davis University of California-San Diego: Rady University of Delaware: Lerner University of Louisiana-Lafayette: Moody University of Massachusetts-Boston University of Massachusetts-Lowell* University of Nebraska -Lincoln University of Nebraska-Omaha University of New Mexico: Anderson University of North Carolina-Charlotte: Belk* University of Oklahoma: Price University of Oregon: Lundquist University of Pittsburgh: Katz University of Portland: Pamplin University of Richmond: Robins University of South Florida: Muma University of Tampa: Sykes University of Texas at Arlington University of Texas-Dallas: Jindal University of the Sciences University of Utah: Eccles University of Vermont: Grossman University of Washington: Foster* University of West Georgia* Virginia Commonwealth University Virginia Tech: Pamplin Willamette University: Atkinson
*Some data unavailable
ceo-mag.com / Autumn 2017
TIER TWO Baylor University: Hankamer* Bowling Green State University California State University-Chico California State University-Northridge Hofstra University: Zarb* Kennesaw State University Loyola University Chicago: Quinlan Marquette University Northwest Missouri State University Purdue University-West Lafayette: Krannert*
Seattle University: Albers University of Cincinnati: Lindner University of Connecticut University of Florida, Hough University of Hawaii-Manoa: Shidler University of Kentucky: Gatton University of Memphis* University of Michigan-Flint University of Wisconsin-Milwaukee: Lubar
EUROPEAN MBA RANKINGS Country Aston Business School* UK Audencia Business school France Birmingham Business School UK Bradford University School of Management UK Brunel Business School UK Business School Netherlands Netherlands Carlos III University of Madrid Spain Copenhagen Business School Denmark Darmstadt University of Applied Sciences Germany Durham University Business School* UK EBS Business School Germany Ecole des Ponts MBA with Solvay France and Belgium ESADE Business School Spain EU Business School Spain, Germany and Switzerland HHL Leipzig Graduate School of Management Germany IE Business School Spain
TIER ONE
Country IESE Business School Spain ISEG Portugal Leeds University Business School UK Maastricht School of Management Netherlands Mannheim Business School Germany MIP Politecnico di Milano Italy Nebrija Business School Spain Porto Business School Portugal SBS Swiss Business School Switzerland The Lisbon MBA Catolica | Nova Portugal Toulouse Business School France Trinity College Dublin School of Business Republic of Ireland University of Amsterdam Netherlands University of Exeter UK University of Liverpool Management School UK University of Nottingham UK University of Sheffield Management School UK
MBA RANKINGS-THE REST OF THE WORLD Country Central Queensland University Australia Griffith University Australia HKUST Business School China IAE Business School Argentina INCAE Business School Costa Rica La Trobe University Australia RMIT University Australia Swinburne University of Technology Australia The University of Adelaide Australia Universidad Adolfo Ibáñez Chile Universidad de Chile Chile ceo-mag.com / Autumn 2017
TIER ONE
Country University of Otago Business School New Zealand University of South Australia Australia University of Southern Queensland Australia University of the Witwatersrand, Wits Business School South Africa University of Waikato, Waikato Management School New Zealand University of Wollongong Sydney Business School Australia Victoria Graduate School of Business Australia
*Some data unavailable
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GLOBAL EXECUTIVE MBA RANKINGS Rank Country 1 University of Ottawa: Telfer Canada 2 Ponts-Fox Global Executive MBA France and (École des Ponts Business School and Temple University) North America Spain, Germany 3 EU Business School and Switzerland 4 Copenhagen Business School Denmark 5 Global OneMBA Mexico, Brazil,
(EGADE, FGV-EAESP, Rotterdam School of Management, University of North Carolina at Chapel Hill and Xiamen University School of Management)
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Netherlands, North America and China Switzerland
SBS Swiss Business School Purdue University-West Lafayette: Krannert - Global EMBA North America 8 Temple University: Fox North America =9 Kennesaw State University North America =9 Loyola Marymount University North America =9 Virginia Commonwealth University North America =9 INCAE Business School Costa Rica 10 CEIBS Zurich institute of Business Education China and Switzerland 11 McGill-HEC Montréal EMBA Canada 12 Purdue University-West Lafayette: Krannert North America =13 Hult Internatonal Business School North America =13 IfM Institut für Management Austria =13 Maastricht University Netherlands =13 Trinity College Dublin School of Business Republic of Ireland 14 Leeds University Business School UK =15 Rutgers Business School North America =15 IE Business School Spain =15 IESE Business School Spain =15 The Lisbon MBA Catolica|Nova Portugal =16 Florida International University North America =16 AIX Marseille Graduate School of Management France =17 Kent State University North America =17 Business School Netherlands Netherlands =17 University of Nottingham UK =18 Fordham University North America =18 University of Utah: Eccles North America 19 Universidad Adolfo Ibáñez Chile =20 Case Western Reserve University: Weatherhead North America =20 Rochester Institute of Technology: Saunders North America =20 Mannheim Business School Germany =20 IAE Business School Argentina =20 Maastricht School of Management Netherlands =21 University of Oklahoma: Price North America =21 University of Texas at Arlington North America =21 University of Exeter UK =21 Concordia University: John Molson Canada =22 Georgia State University: Robinson North America =22 Mercer University-Atlanta: Stetson North America =22 Oakland University North America =22 Audencia Business school France 7
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TIER ONE
Rank Country =22 Stockholm School of Economics Sweden =23 University of California-San Diego: Rady North America =23 The Durham EBS Business School Executive MBA UK and Germany 24 Pepperdine University: Graziadio North America 25 Boston University: Questrom North America =26 Baylor University: Hankamer North America =26 Millsaps College North America =26 RMIT University Australia 27 Bradford School of Management Executive MBA in Dubai Dubai =28 Northern Illinois University North America =28 University of Kentucky: Gatton North America =28 Villanova University North America =29 California State University-Long Beach North America =29 HHL Leipzig Graduate School of Management Germany =29 Porto Business School Portugal =29 University of Wollongong Sydney Business School Australia 30 Washington State University: Carson North America 31 Bradford University School of Management UK 32 University of Tampa: Sykes North America 33 Solvay Brussels School of Economics and Management Belgium 34 University of Oregon: Lundquist North America =35 California State University-East Bay North America =35 University of Texas-Dallas: Jindal North America =35 University of Wisconsin-Milwaukee: Lubar North America =36 Marquette University North America =36 Saint Mary’s College of California Trans-Global EMBA North America =36 University of Alberta Canada =36 University of Washington: Foster North America =36 College of William and Mary: Mason* North America =36 Aston Business School* UK =37 Georgia Institute of Technology: Scheller North America =37 ESADE-Georgetown Global Executive MBA Spain and North America =38 Auburn University: Harbert North America =38 University of Connecticut North America =38 University of Pittsburgh: Katz North America 39 MIP Politecnico di Milano Italy =40 Loyola University Chicago: Quinlan North America =40 Seattle University: Albers North America =40 Suffolk University North America =41 Saint Mary’s College of California North America =41 Texas A&M University- College Station: Mays North America =42 Saint Joseph’s University: Haub North America =42 ESADE Business School* Spain 43 University of Hawaii-Manoa: Shidler North America =44 Chapman University: Argyros North America =44 University of South Florida: Muma North America =45 Hofstra University: Zarb* North America =45 University of New Mexico: Anderson* North America =45 Universidad de Chile Chile
*Some data unavailable
ceo-mag.com / Autumn 2017
TIER TWO Rank Country =1 Bowling Green State University North America =1 University of Florida: Hough North America 2 Drexel University: LeBow* North America 3 Cleveland State University: Monte Ahuja North America
Rank Country 4 University of North Alabama North America 5 Birmingham Business School UK 6 University of Louisiana-Lafayette: Moody North America 7 University of Memphis* North America
GLOBAL ONLINE MBA RANKINGS Rank Country 1 EU Business School Spain, Germany and Switzerland 2 SBS Swiss Business School Switzerland 3 IE Business School Spain 4 University of Otago Business School New Zealand =5 University of Utah: Eccles North America =5 Nebrija Business School 6 =7 =7
=7 8 =9 =9 =10
=10 =10 11 12 13
14 =15 =15 =15 =16 =16
Spain
Temple University: Fox North America The Open University UK Rochester Institute of Technology: Saunders North America MIP Politecnico di Milano Italy Bradford University School of Management UK La Trobe University Australia American University: Kogod North America The EuroMBA France, Spain, (Aix-Marseille, Audencia Nantes, EADA, HHL Leipzig, Kozminski University and Germany, Poland, Maastrict University) and the Netherlands Colorado Technical University North America Maastricht School of Management Netherlands University of Massachusetts-Lowell* North America Jack Welch Management Institute North America Washington State University: Carson - EMBA North America RMIT University Australia University of Southern Queensland Australia University of Liverpool Management School UK Durham University Business School* UK Griffith University Australia California State UniversitySan Bernardino North America
GLOBAL DBA LISTING Aston Business School Baruch College, City University of New York: Zicklin Case Western Reserve: Weatherhead Cranfield School of Management DePaul: Kellstadt Drexel University: LeBow Durham University Business School École des Ponts Business School EU Business School Georgia State University: Robinson ceo-mag.com / Autumn 2017
Rank Country =17 Washington State University: Carson North America =17 Queens University of Charlotte North America =18 Saint Mary’s College of California North America =18 Pepperdine University: Graziadio North America =19 University of Texas-Dallas: Jindal North America =19 Suffolk University North America =19 Mercer University-Atlanta: Stetson North America =20 University of the Sciences North America =20 University of Baltimore North America =20 Saint Joseph’s University: Haub North America =20 Florida International University North America =20 Central Queensland University Australia =20 Birmingham Business School UK =21 University of Delaware: Lerner North America =21 Swinburne University of Technology Australia 22 Georgia WebMBA (Columbus State, Georgia College,
Georgia Southern, Kennesaw State, University of West Georgia, Valdosta State)
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Hofstra University: Zarb* Aston Business School* Baylor University: Hankamer University of Hawaii-Manoa: Shidler University of Cincinnati: Lindner Drexel University: LeBow* College of William and Mary: Mason* University of Florida: Hough University of Nebraska-Lincoln University of North Alabama Auburn University: Harbert Cleveland State University: Monte Ahuja University of Memphis* Northwest Missouri State University
24 25 =26 =26 =27 =27 28 29 =30 =30 31
=32 =32
North America North America UK North America North America North America North America North America North America North America North America North America North America North America North America
Based upon accreditation, quality of faculty, geography, and international standing, this year’s Global DBA Listing is designed to showcase the market’s premier DBA providers.
Harvard Business School IE Business School Kennesaw State University: Coles Maastricht School of Management Rollins College: Crumer SBS Swiss Business School Temple University: Fox University of Dallas: Gupta University of Manchester: Alliance Washington University in St. Louis: Olin *Some data unavailable
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REAL PEOPLE, REAL RETURNS
University of the Sciences Pharmaceutical and Healthcare MBA
87%
Received at least one promotion or changed jobs for increased salary.
34% Received one promotion
42%
Received two promotions
24 %
Received three or more promotions
WHAT KIND OF SALARIES DID THESE GRADS COMMAND?
39%
Made more than $125,000
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54% Made between $50,000 and $125,000
39% Made between $75,000 and $125,000
ceo-mag.com / Autumn 2017
B
usiness programs are fond of calculating the value of their MBA programs with sophisticated analytics such as salary-to-debt ratios, net present value of money, time value of money, and opportunity loss and gain. And it is an important question for applicants to consider - graduate education is expensive and time consuming. At University of the Sciences (USciences) we take a straightforward approach - we ask our alumni in biannual surveys. The results have consistently validated what we know the value of our specialized program to be.
Most MBA programs hang their value on ratios of program cost, debt and exit salaries. Our most recent alumni survey confirmed that our graduates have done exceedingly well in this regard. Our tuition is approximately $42,000 for the entire program and exit salaries range from $50,000 to over $125,000. More specifically, 54% of our graduates made between $50,000 and $125,000; and 39% made more than $125,000. This compares well with national statistics that show that the average elite MBA exit salary is $100,000 and twoyear tuition ranges from $80,000 to well over $100,000. But there is far more to the value of an MBA than salary. What about getting to work in your field; and how valuable is it that you will be promoted quickly? Our surveys indicate that 91% of our graduates find work in the pharmaceutical and healthcare space in areas ranging from BigPharma and biotech to consulting and advertising. And when they get there they are promoted - 87% received promotions or job changes for increased salaries within a few years. A further 42% were promoted twice in a 5-year period and 24% were promoted at least three times in the same period. And promotion also means that these employers see the value in hiring these new MBAs. So, based on salary and advancement, the positive ROI is clearly apparent. ceo-mag.com / Autumn 2017
90 %
Of graduates were satisfied or very satisfied with the program.
90 %
Would recommend the program to others.
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GRADUATE SUCCESS MBAs are also real people with real stories to tell; and these stories are more rewarding than the positive numbers described above. earlier.Three Threeof ofthese these real people are Adrianna Rogers, Yelena Yankovskaya and Chris van Biesen. the University of Sciences the Sciences to offer a unique springboard a Each found University of the to offer a unique springboard to a to more more professionally rewarding career. professionally rewarding career.
ADRIANNA ROGERS DIRECTOR, SUPPLY CHAIN AT ASSOCIATE FLUZONE® DIRECTOR FLUZONE® SUPPLY SANOFIPASTEUR CHAIN AT SANOFIPASTEUR
“
I have rocketed; and the USciences MBA has provided much of the fuel for this exciting trajectory.”
“While the work at Merck was rewarding, I very much wanted to move into a role that had a far broader strategic focus. That is the University where the specialized MBA at University of the Sciences came in. As I looked at the various MBA programs, USciences was the only one that offered an end-to-end view of the pharmaceutical and healthcare sector. The program courses like Pharmaceutical R&D, Regulation of Prescription Drugs, International Pharmaceutical Business, Ethical Issues in Pharmaceutical Business and many others fitted the bill.” She went on to explain that the program helped her develop crucial soft skills: “The USciences experience provided a pathway of knowledge and experience that has enabled me to work in and lead teams that are crossfunctional and multi-cultural. The student body itself is multi-cultural, and we were required to work in teams and develop presentations on a regular basis. It has helped me develop the ability to get out of a technical silo and work knowledgably in strategic, cross-cultural settings.” And as Ms Rogers went searching for her next career opportunity, she found that her capstone project positioned her above what she might have otherwise expected. “At my interview with SanofiPasteur, the interviewers said that based on my experience
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and education I might be a better candidate for a more senior position. When I returned for the second interview I brought a few of my Capstone slides that analyzed how supply chain inventory management could improve company profitability. They hired me as the Associate Director for Fluzone® supply chain inventory management. In 2016 I was promoted to Director, and I am now managing people and working internationally.” She concluded that: “I have received praise for my ability to knowledgably work crossfunctionally, present problems cogently, and develop sound solutions in an often ambiguous and changing environment.” “I have rocketed; and the USciences MBA has provided much of the fuel for this exciting trajectory.”
YELENA YANKOVSKAY YANKOVSKAYA PHARM.D., MBA, CLINICAL SPECIALIST, LUCENTIS® GENENTECH
“
I believe my business degree from USciences helped me stand out in the hiring process and in each role then. since then.”
Ms Yankovskaya took a different route, as she combined her Doctor of Pharmacy program with the Pharmaceutical and Healthcare MBA. “The USciences MBA program is special for many reasons. If I had to narrow it down to just three things it would be the technical and business expertise of the faculty, the flexibility of the program and the rich network. The entire program is designed in ceo-mag.com / Autumn 2017
a thoughtful way from diverse introductory courses all the way to advanced capstone work, providing exposure to hands-on experiences and engaging learning methods like market simulation exercises. The flexibility of the program allowed me to me “The flexibility of the program allowed complete anan advanced degree, maintain a fullto complete advanced degree, maintain time job that regular traveltravel and even a full-time jobrequired that required regular relocate work; for thework; program able to flex and evenfor relocate the was program was to mytoindividual Most importantly, able flex to my timeline. individual timeline. Most when it camewhen time to plan for thetonext importantly, it came time plancareer for the step, the USciences was there next career step, thecommunity USciences community for One myOne professors told me about wasme. there forofme. of my professors told ame fellowship with a biotech that about a fellowship with company a biotech company represented a significant opportunity. I won that represented a significant opportunity. the fellowship and five years proud I won the fellowship and five later yearsI’m later I’m to say I’mtostill Genentech! proud saywith I’m still with Genentech!” “I believe my business degree from USciences helped me stand out in the hiring process and in each role since then. Whether it’s managed care marketing or sales, I’ve found myself coming up-to-speed more quickly thanks to the specialized MBA. Obtaining an MBA was a huge commitment and took a lot of effort, but it’s completely worth it when you realize that you feel prepared, confident and supported in whatever might be the next challenge that you choose to pursue in pharmaceuticals.”
CHRIS VAN CHRISTOPHER BIESEN VAN BESIEN CLINICAL PROJECT MANAGER MANAGER,AEGLEA AEGLEA BIOTHERAPEUTICS
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The most challenging, rewarding and impactful experience was that related to efforts associated with my capstone project. project.”
Biesen entered the Pharmaceutical Mr Van Besien and Healthcare MBA program from Austin Texas. “Residing in Austin, Texas I had trouble in finding an MBA program with faculty experienced in the pharmaceutical and biotechnology industry. The specialized Pharmaceutical and Healthcare Business MBA program at the Mayes College of Healthcare Business and Policy contains faculty with real-world industry experience.
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Additionally, the evening and online program flexibility was very conducive to the unpredictable work and travel nature usually associated with clinical development professionals such as mine.” myself.” The value Mr Van Biesen Besien found in the program was not limited to numbers and strategy. He also found great value in the “soft “soft classes so fundamental skill”skill” classes whichwhich are soare fundamental to to success at work: “The program’s weeksuccess at work: “The program’s week-long long intensive courses helpto breakdown and intensive courses help you breakdown understand group dynamics, leadership and understand group dynamics, leadership styles, individual differences and conflict resolution that contribute to highly successful all contribute to highly teams. These concepts, with along group-led successful teams. Thesealong concepts, with experiences, have prepared for similar group-led experiences, haveme prepared me for challenges closely aligned with those within similar challenges closely aligned with those our industry.” within our industry.” As with many other students, the USciences Capstone project proved highly valuable: “The most challenging, rewarding and impactful experience was that related to efforts associated with my capstone project. I was fortunate to have Dr Audet as my advisor, and she assisted in directing my capstone research towards an accurate assessment of a of a real business scenario. I remain real business planplan scenario. I remain forever forever for this opportunity, which gratefulgrateful for this opportunity, which has has provided me a agreat provided me with greatdeal dealofofknowledge knowledge and respect for entrepreneurs within the pharmaceutical and biotechnology industry.” Since leaving USciences, Mr Van Beisen Besien has successfully merged his clinical background and interests with his management training. The result is that he is now a Clinical Project Manager at Aeglea Biotherapeutics, a leader in engineering human enzymes focusing on rare genetic diseases and cancer. While the personal stories for our alumni vary, taken together, the numbers work: costs are recovered in a few years; there are opportunities to work in an exciting sector; the salaries and promotions represent a significant advancement; and the professional experiences are focused and rewarding. We are convinced that the return our students find on their investment is well worth the cost in time and money. And as 90% of our graduates’ report that they would recommend the Pharmaceutical and Healthcare MBA, we are confident that they agree with us.
“These stories are more rewarding than the positive numbers.”
BIOGRAPHY
University of the Sciences is a leading science education college andand a top pharmacy school in Philadelphia, institution a top pharmacy school in PA, specializing science andinhealthcare. Philadelphia, PA,inspecializing science and healthcare education.
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THE SECRET TO STUDENT SATISFACTION “As a student-centric school we expect our faculty to display an intent and willingness to support students, which extends beyond the classroom.”
“Our faculty must have practical experience in business, not just a mastery of theory or research experience. It’s this practical experience that brings the material to life.”
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Alexandra Skinner speaks to Mike Zeliff, Dean of Faculty and Students for the Jack Welch Management Institute Q. We know that the quality of one’s faculty is incredibly important to applicants and students. What sets the Jack Welch Management Institute’s (JWMI) faculty apart from other schools and why? All JWMI faculty members have the academic qualifications to teach our courses. More importantly, all of our faculty are professionally qualified, i.e. they have at least ten years of professional experience within the industry or discipline in which they teach. Our faculty must have practical experience in business, not just a mastery of theory or research experience. It’s this practical experience that brings the material to life for our students. As a student-centric school we expect our faculty to display an intent and willingness to support students, which extends beyond the classroom. They have to show a generosity of spirit to coach and mentor. They must respect that adult learners have complex lives, and show compassion for students. And the support extends beyond the classroom. I need each faculty member to know each student and determine how to transform his or her life, in much the same way a consultant would work with a client. Our faculty also developed a charter whose mission is consistent with that of JWMI. And they outlined the values and behaviors that align with the mission. And each term, they are evaluated against those same values and behaviors via our faculty scorecard. So our professors are living the mission every day in the classroom, and have complete transparency into where they stand. Q. You have a non-traditional approach to recruiting faculty. Kindly expand. The majority of our professors are referred by current faculty members or drawn to us by Jack Welch’s brand. Recruiting great faculty is not a challenge. Many people want to learn from, be coached by, and work in an environment that operates under Jack’s principles. Regardless of the fact that all of our faculty members are remote and teach exclusively online, I interview each candidate in person so I can assess their fit within the JWMI community. The deciding factor in our hiring
process is whether you have that passion to engage, challenge and excite our students, and I have to meet with each candidate personally to assess those traits. Once they are hired, all JWMI faculty members undergo a two-part, 10-week intensive faculty training programme that covers JWMI best practices, course curriculum, and classroom preparation. The first 5-week session includes an in-depth introduction to JWMI, faculty expectations, learning management system usage, and supplemental technology tools to enhance the virtual classroom experience for students. Passing the course isn’t a given. We regularly weed out 30-40 percent of applicants who won’t be successful at JWMI. After passing the first 5-week session, faculty members are assigned to Course Leads within their discipline to review grading standards and instructional content with peer instructors. Upon completion of the 10-week training programme, JWMI faculty members are certified to teach courses within the Jack Welch MBA programme, and do so with a higher rate of engagement and confidence in their digital classrooms. Q. What is the advantage of non-tenured faculty, and how does this model influence teaching behavior? The programme is built around the students, not the faculty. Thus, we need a model to consistently evaluate faculty effectiveness based on their results and alignment with our mission, not their time with the institution. Our faculty are held accountable, via a scorecard, to the charter of behaviors and values (JWMI Faculty Charter) which they created. The scorecard is combined with student survey results, and the faculty enjoy complete transparency in regards to these results. JWMI practices differentiation. Each term we celebrate the top 20 per cent, coach around the middle 70 per cent, and take a hard look at the bottom 10 per cent. We have to consider whether JWMI is the right fit for those that fall into this bracket, and if it’s not, allow them to move on to other opportunities. ceo-mag.com / Autumn 2017
OR AV I
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The JWMI Faculty Charter: Designed and created by the faculty for the faculty in order to guide student success. ceo-mag.com / Autumn 2017
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Q. You use Net Promoter Score to inform your performance measurement. How important is this data in terms of meeting and exceeding student expectations? Student satisfaction is our primary focus at JWMI, and we use NPS to measure both their overall programme experience and their course experience with individual faculty members. While our current programme NPS score of 81 is an all-time high, we are not focused on the compliments. Rather, we take great care to review each suggestion for improvement. The leadership team and staff follow-up with each student who requests a call back. If our students are not satisfied, we are swift to make changes and improve, whether it’s the curriculum, faculty, technology, policy, or practice. For example, if students aren’t finding value in a textbook, we replace it. If students want improved functionality on our learning platform, we implement it. If a course isn’t delivering its learning objectives, we update the content. And we tell all of our students about the specific changes we are making on their behalf, which drives better feedback. The NPS or a student's willingness to recommend a professor is critical, but it’s only the start. We also track the key behaviors that predict faculty success. These behaviors include providing meaningful feedback to students on assignments, engaging enthusiastically in the class with every student, creating inspirational videos and announcements and collaborating well with the students, the faculty team, and the staff. Q. What traits do your most successful students possess? Just as we’ve identified the behaviors that lead to great performance for our faculty, we know that there are similar traits for our students. These defining factors include early and continuous engagement, a willingness to be coached, a desire to learn, and an interest in the greater JWMI community.
BIOGRAPHY Mike Zeliff is Dean of Faculty and Students for JWMI. He is responsible for assessing student learning outcomes, improving retention and graduation rates, scheduling faculty and courses, and resolving faculty and student concerns. Prior to joining JWMI, Mike served as adjunct professor of Marketing at George Washington University, Chief Strategy Officer at JWT Inside, Senior Researcher at TNS Employee Insights, and Chief Marketing Officer for the United States Marine Corps. Mike holds a PhD in Marketing from George Washington University. 22
ceo-mag.com / Autumn 2017
REWARDS AND RECOGNITION IN THE NET PROMOTER SYSTEM BAIN & COMPANY
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anya Riley was at a team meeting at TD Bank when a van emblazoned with the bank’s signature green colors and the words “Wow! the Customer” on its side screeched to a halt outside. Six TD employees piled out of the sliding door sporting green feather boas, huge floppy hats and green sequined bow ties. They sprinted into the building and then into the meeting where they rattled noisemakers and led the other employees in robust cheers for Tanya - the latest employee to be recognized for wowing a customer. Not everyone gets this treatment, of course, but TD Bank recognizes all employees who create great customer experiences by hanging a small “Wow Moment” citation on the wall. A handful of these are nominated for regional awards - like Tanya’s - and a few of those go on to a national award ceremony.
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I don’t feel like this is a job,” says Tanya. “To come to work to do something that I just absolutely love doing, and then to get recognized on top of that, it just really makes me feel… Wow. I don’t ever want to leave this company.” TA N YA R I L E Y
Positive reinforcement is a powerful way to inspire the right behaviors. Yet too often, companies focus on negative reinforcement. They talk about “holding people accountable” for improvement. But it is many times more important to recognize and reward employees. It’s tempting to think that we’re talking primarily about compensation here. For the most part, we’re not. Recognition and rewards come in many forms, and while compensation is the most obvious way to reward employees, it’s a blunt instrument. Incentive plans tend to be loaded with half a dozen initiatives or more. If 15%–20% of an employee’s pay is incentive comp, that works out to about 1%–3% for each initiative. If you’re trying to send a message about behavior that the company values, why rely solely on something as infrequent, blunt and watered down as incentive comp? If you want to reinforce desired behaviors, small, regular, immediate rewards are far more effective: the day-to-day praise of a supervisor, daily recognitions of small victories in a team environment, regular recognition from senior leaders. Each can be delivered with precision and detail, and offer
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opportunities to tell stories that reinforce the behavior not just for one employee, but for all employees who hear them. And the most powerful form of motivation? The satisfaction that comes from making a customer’s life better. Net Promoter System companies tap into this natural human desire for intrinsic rewards. Most people enjoy knowing that they have made someone else happy or satisfied. Indeed, if your employees are receiving that feedback and don’t find it motivating, you probably have the wrong employees. Let’s acknowledge up front that recognition is not something companies do naturally or easily. That’s why compensation is such a common form of reward. The center can set it up, based on standard metrics and targets, and the center doles it out. Recognition, by contrast, is handled by hundreds, even thousands, of teams across a company. That’s more difficult. But done right - when it taps into and reinforces your employees’ natural motivation to make other human beings happy - it can make your company truly stand out as a customer leader. Let’s take a look, then, at the variety of reward and recognition techniques available. Real-time feedback. The central technique of the Net Promoter System - the one with the greatest impact - is to provide each individual piece of customer feedback as soon as possible to each of the employees who were involved in the transaction that produced that feedback. Why is this so important? Because customer feedback tends to be overwhelmingly positive. Many people mistakenly assume that Net Promoter® feedback consists largely of detractor complaints, but the opposite is true. The average relationship or episode Net Promoter Score® for companies is in the 30–40 range - and much higher at some well-run Net Promoter companies. That means the front line hears significantly more positive feedback than negative. And because employees hear it almost in real time, customer feedback is memorable. It comes in story form and allows the employee to remember - and feel good about - the specific behavior that produced that result. Such immediate, real-time feedback fosters learning. Informal and formal storytelling. Promoter stories can also be reinforced and shared in supervisor-led conversations or team huddles. Supervisors pick out a specific piece of feedback and have a conversation with the employee to explain what they believe the employee did that created such a positive experience and such a high score. This reinforces not just the score, ceo-mag.com / Autumn 2017
but the behaviors that made the customer an enthusiastic promoter. Other types of reinforcement can include personal conversations, handwritten thank you notes or formal shout-outs during team huddles. One variation is a version of what TD Bank’s Tanya Riley experienced. Supervisors write up small citations for employees who create great customer experiences and include the story about what that employee did to create a promoter. Those citations are delivered in front of the employee’s other team members and also hung on the wall. This memorializes the behavior, establishes that behavior as a cultural norm and creates a goal for many employees: “I want my name and customer story hanging on that wall.” Coaching. People often think of coaching as a way for supervisors to respond to mistakes and errors by employees. But some of the most effective coaching reinforces the behaviors that lead to organizational success. In the Net Promoter System, supervisors and managers regularly make follow-up calls to customers to discuss their feedback - negative and positive. The negative feedback creates coaching opportunities, of course, but the best managers also make sure they follow-up with employees to share constructive feedback, to express pride in the employee’s actions - even if they diverged from standard practice. If the driving force behind company policies is to create promoters, but an employee broke from that policy because he or she saw a way to create a promoter for life, supervisors should celebrate the initiative and reinforce the behavior. At some companies we know, top executives also make a habit of making follow-up customer calls - and following-up with employees. Award competitions. Some organizations have competitions to ensure recognition is embedded in the culture and celebrated. At TD Bank, some of the “Wow” stories that go up on the wall are nominated for a regional award, and those employees get special recognition in front of their regional peers, as well as special training, access to company leaders - and even a premium parking spot. A few of these go on to a national award ceremony, and the very best are rewarded with a trip, a dinner with the CEO or other perks. And at every level, the emphasis is not on a score, but on a story: which behaviors and what actions produced this result. Peer recognition. For many employees, the most meaningful recognition often comes from colleagues and teammates. During huddles at some companies, employees identify colleagues who contributed the most to their ability to serve customers. When employees regularly give each other shoutouts for making it easier for the team to serve 25
the customers better, such gratitude becomes infectious and creates a deeper sense of communal purpose. Executive recognition. Executives often have more influence than they fully understand, and the symbolic messages they send through the positive reinforcement can have a huge impact on employees. Executives who take the time to recognize an individual or a team create real momentum. And it’s just as important for those executives to explain why they’re recognizing those people - to preach what they practice, if you will - as it is for them to spend the time in the first place. Employees can be remarkably quick to ascribe motives to executive behavior, but often misinterpret it. When an executive takes time to recognize people for the right behaviors, it’s a golden opportunity to teach the company’s values. Executives who do this discover a surprise bonus: It’s good for the soul. Senior executives often find themselves caught up in the various fire drills that inevitably arise in a business. Taking time to recognize employees is a personally rewarding and meaningful way to reinforce the business strategy and walk away feeling better about the company and what you’ve achieved collectively. Likewise, executives who get involved in recognizing loyalty-earning behavior also increase their understanding of what they need to do to enable those behaviors. At Vanguard, Martha King, the managing director of a business unit, made follow-up calls along with the rest of her senior team. They regularly spoke to frontline employees, shared the positive feedback they were hearing from clients and expressed gratitude for the hard work that made that possible. That made employees feel recognized, to be sure, but it also gave those executives personal insights into what sorts of behaviors inspired real gratitude from customers. Goals and objectives. Accomplishments are motivating. One way to instill a sense of achievement is to set aggressive goals and then achieve them, such as improvements in Net Promoter Scores, retention, revenue per customer, cross-selling, referrals or first-call resolution. It’s hugely rewarding to know that you’re on a winning team, doing a better job of serving your customers, whether that comes from internal measures or in the form of awards from third parties such as industry associations or companies like J.D. Power. Some goals can be simple achievements: Creating one more promoter each day, helping a colleague master a new skill or simply trying to offer positive feedback - or gratitude - to a colleague one more time per week. Compensation. With some caveats, there are still plenty of situations where 26
compensation is an important part of the rewards system. For senior executives, it’s almost always a good idea to link their goals and incentives to competitive improvement measured by competitive benchmark Net Promoter Scores. Such benchmarks measure performance against a high-level corporate goal that links directly to the business strategy. Executives can influence performance, but can’t game the scores. Using compensation as a reward for customer-facing employees, on the other hand, can be dangerous. In the early days of a Net Promoter System, it’s almost always unwise to use customer-based feedback as a source of evaluation and incentives. An organization new to the system typically has limited skills for achieving fundamental improvement, and the temptation to game scores is high. Eventually, you do want to include Net Promoter Scores in incentive compensation, but the key is to do so only after you have established trust in the system and reached a point where people believe they can influence the outcomes. In a Net Promoter System, this implies that you have met six conditions. Here’s a quick run-down of those requirements: n An established, stable system with reliable metrics. Only when everyone in the organization can see that the feedback is accurately collected and measured will they believe that the scores are reliable. n Crystal-clear links between scores and financial and strategic outcomes. Changes in incentive compensation make sense to people only when those changes help the business succeed by encouraging the right kind of discretionary effort. n Processes and tools that help employees understand root causes. The heart of the Net Promoter System consists of employees and supervisors who figure out what delights or angers customers and then take action (or recommend changes to higher-ups). But if they don’t understand the root causes, they can’t affect the feedback and are powerless to affect their incentive compensation. n Organized learning. The more that frontline employees can learn from each other and from supervisors, the faster they will progress. That makes for a better customer experience, which then generates better ratings and higher bonuses and encourages more learning. It’s a powerful virtuous cycle, but getting it started means putting those opportunities in place. n Repeated communication. Companies should regularly remind ceo-mag.com / Autumn 2017
employees of the incentive plan’s goals and motivations, how it should function and what they can do to increase their own compensation. n Strong anti-gaming rules. It should be a firing offense to talk to customers about the scores they will ultimately give you. The best companies watch for patterns that suggest tampering and audit the feedback. n Negative consequences. For senior executives, there should be an upside for gaining ground vs. the competition and a downside for losing ground, because that adds or destroys value. At Enterprise Rent-A-Car, if your team is in the bottom quartile on its Enterprise Service Quality index, you can’t be promoted. Likewise, companies need to watch out for incentives that can harm customer relationships. Sales is one obvious example; companies need to create clear consequences for anyone who makes a sale that results in an unhappy or angry customer. One insurance company divides salespeople into quadrants. Those who make lots of sales but also create lots of detractors are penalized. Rewards and recognition take many forms, and this is not an exhaustive list. Not long ago at JetBlue, for example, the vice president responsible for the airline’s flight attendants explained in her auto-reply email message why she was out of the office: She was in the air, filling in for a flight attendant whose customer feedback was so consistently great that she had been given the day off. What that example and the techniques described above have in common is that they all aim to reward employees and build a culture built around the intrinsic motivation to have a meaningful job; to do something that makes customers and your peers happier. Net Promoter®, Net Promoter System® and Net Promoter Score® are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
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“If you want to reinforce desired behaviors, small, regular, immediate rewards are far more effective.”
BIOGRAPHY
Rob Markey is a partner and director in Bain & Company’s New York office and leads the firm’s Global Customer Strategy & Marketing practice. He is co-author of the best-seller The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World.
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AN INNOVATIVE APPROACH TO PROBLEM-SOLVING
Alexandra Skinner Speaks to RMIT’s Director of MBA Programmes, David Goodwin Q. What type of candidates are the RMIT MBA and EMBA designed for? RMIT offers two quite distinct MBA programmes. Our baseline MBA targets aspiring executives, interested in acquiring the core skills essential to a career in business leadership. The Executive MBA we offer is aimed at emerging executives, with significant experience and pre-existing exposure to the practice of leadership - in this programme, candidates operate in more of a 'masterclass' mode. Our EMBA students bring their personal business experience and 'war stories' to bear in classroom discussions, and this means they learn at least as much from one another as they do from their teachers.
“RMIT enjoys a reputation for being applied, innovative and strong in design.”
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Q. RMIT enjoys a number of strong corporate relationships. How much support does the school receive from these businesses? Interaction with the real-world of business is at the core of RMIT's DNA. Our institution was founded in 1887 with the motto "A skilled hand and a cultivated mind", and our offerings today continue to be true to this heritage. We pride ourselves on a hands-on approach to preparing our graduates for life and work and, in the case of our graduate programmes, for career progression. RMIT enjoys a reputation for being applied, innovative and strong in design. We aim to develop leaders who can both articulate theories of leadership and actually lead others to achieve organisational objectives. This means that industry is deeply embedded in everything we do. Our corporate partners - organisations as diverse as Spotless, Capgemini and the National Gallery of Victoria - support our programmes in a variety of ways. They provide guest lecturers and mentors who offer current exposure to the challenges of contemporary business practice. They accept our students into business internships and employ our graduates. Our partners also share with us real-world problems, which become the basis for assessment tasks - in a large proportion of the courses in our programmes, our students work in teams to address live business challenges.
Q. Are students able to take advantage of these relationships Our students are absolutely in a position to capitalise on the business relationships which surround our programmes. The potential of alumni networks, and the power of relationships built within each student cohort, should not be underestimated. Our university has been offering MBA programmes for more than 40 years now, so our alumni networks are extensive. Q. What are some of the key market trends that you see emerging in 2017/18, and how will this affect RMIT’s MBA and EMBA offering moving forward? Our dialogue with the corporate sector suggests that the characteristics organisations are looking for in their 'employees of the future' can be summarised as the 'seven Cs' - collaboration, critical thinking, creativity, curiosity, communication skills, confidence and compassion Our challenge as educators and as coaches of future business leaders is to ensure our programmes inculcate these capabilities, at a high level. By the time our graduates complete our programmes, we want them to have refined these traits so they become instinctive. A focus on collaboration equips students to be well prepared for the diversity and complexity of the global world of work. An MBA qualification should signify a commitment to think critically, which drives dissatisfaction with the status quo and a constant striving for improvement. Modern-day firms’ relentless emphasis on innovation means they expect creative problem-solving from people at all levels of their organisations. And these characteristics flourish when they are underpinned by an innate curiosity- a quality which a university like ours is well placed to foster. To become great communicators, our students need to develop superior listening, speaking and writing skills. It is a given that employers expect MBA graduates to exude confidence, but they now want to see that blended with compassion, a vital ingredient of leadership in a rapidly changing world. ceo-mag.com / Autumn 2017
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David Goodwin has been RMIT's MBA Director since March 2016. He teaches Corporate Governance and Regulation and Executive Consulting and has research interests across the fields of business ethics, organisational governance, alternative dispute resolution, economic torts and maritime law. ceo-mag.com / Autumn 2017
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AMBA is the world’s only MBA-specific Accreditation Organisation, accrediting just 2% of the world’s Business Schools. www.mbaworld.com ceo-mag.com / Autumn 2017
IS THE MBA A WASTE OF MONEY AND TIME?
Alexandra Skinner sat with Dr Wolfs of SBS Swiss Business School in Zurich for their annual MBA talk. A summary of their fascinating conversation follows:
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s an educator, reading the respected international and economic press these days only gives you headaches. The headlines relating to Master of Business Administration (MBA) programmes around the world aren’t particularly flattering. They typically range from: “An MBA Is No Longer Worth The Investment”, to “MBA Schools Closing Due To Lack Of Students”. As the Academic Dean of a business school, I don’t deny that we are going through a transformation. This is significant for our industry, since the education sector is traditionally a very conservative and riskavoidant market. However, if you look at the Graduate Management Admission Council (GMAC) figures for 2016, you can clearly see that the statistics for the executive MBA and online MBA are on the rise. In fact, both programmes have seen application volume growth of 7.5%, with most business schools recruiting their international students from China, India and the USA. The major drive for these students being the career opportunities given in the destination country - in other words, where the business school is located. China and India boast large-scale populations and lots of young people who want to obtain business skills but cannot always join local universities or business schools due to the stiff competition for places. In the USA, more and more American students want to go abroad, learn different cultures and, eventually, a language in order to return to the US, post-MBA, with a competitive difference. Political polarisation is also a factor when it comes to students’ choosing one country over another. The Financial Times (FT) recently reported that, according to their calculations, it could take up to 10 years’ post-graduation to recoup your MBA investment. They concluded that many may never see the return, which may point to the supposed drop in MBA applicants. However, we need to make an important ceo-mag.com / Autumn 2017
differentiation here. Whilst the majority of graduate business programmes in the US reported declines in international applications this year compared to last year (GMAC, 2017), Canada and Europe both reported increases and, despite Brexit plans, the UK also reported growth in international applicants. It has also been suggested that MBA programmes have been suffering as a result of specialised degrees taking over the market and providing immediate Return on Investment (ROI). So, are specialised master’s programmes cannibalising MBA programmes by recruiting younger students and giving them the requisite tools they need now? From SBS Swiss Business School’s data, and other international data, you can see that this is not the case. In fact, those candidates who already have a master’s degree see this as an entry ticket to the MBA and return to business school to complete an MBA after their master’s degree. Where is all this negative press coming from and is it warranted? It wasn’t long ago that we were under attack for not focusing enough on ethics, then there was the issue of gender equality in MBA enrollment numbers, and now this! The World Economic Forum stated in a report (2016) that the job of the future, so to speak, doesn’t exist today. Business Schools, therefore, are facing a dilemma: we need to educate future generations with abilities and skills, not knowing how industries will transform. Yes, the future is challenging, but I strongly believe in incremental change. We need to improve our business programmes and delivery models, and thanks to our stakeholders, including the press, who remind and focus us on doing so, we will continue to do so.
“Business Schools, therefore, are facing a dilemma: we need to educate future generations with abilities and skills, not knowing how industries will transform.”
So, what’s the big picture? Changing demographics have an impact on the entire world. I have often referred 31
“For experienced managers, reskilling and retraining is part of a lifelong learning process, where content focuses on today’s requirements and not past successes.”
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to them as a “silent bubble” - one which is already bursting, but which no-one wants to acknowledge. People only notice the changes once they see them in the form of cuts made to their pension funds. However, in the past, technological advancements and demographic changes have led to more job creation. According to the International Labor Organization (ILO), the world’s global workforce consists of more than three billion people. This means that we need to learn how to integrate older employees into advanced economies, and not only look at labour cost. On the flip side, in emerging markets, we have youngsters without work experience who want to be part of the working world. The key technological drivers of change are mobile internet and cloud technology, advances in computing power and Big Data, the Internet of Things (IoT), advanced robotics and autonomous transport, 3D printing and Artificial Intelligence (AI).
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These technologies are forcing companies to rethink their business models. What is expected today from employees and leaders? Good leaders need a set of abilities and basic skills, including content and process skills. In addition, they need cross-functional skills such as social and system skills, technical skills and complex problem-solving skills. These cross-functional skills will need to be learnt via a form of formal education which produces an outcome in the form of a certificate or degree. In my own experience, and from looking at best practice, business education needs to be practical. This practicality, and the possibility of dual-learning, results in very low youth unemployment in Switzerland. I suggest that people undertake an MBA while they continue to work. This gives you the advantage of applying the theoretical concepts learnt immediately.
What features should an MBA applicant look for when considering a robust MBA offering? Personalised learning and hybrid models. To maximise the benefits of the programme, you need to look for opportunities to personalise your studies towards your individual goals. A perfect tool for this is the thesis. This should be an individual project focused towards your personal interest. During a good MBA programme you will at some point need to write a business plan. Why not write about that dream or idea you’ve had for years? Use your professors as consultants and experts. Students who receive a blend of lecturerdirected and inquiry-based instructions achieve the best outcomes. Cross-industry collaboration. Do you have the chance as a student to interact with speakers and representatives from different industries? Do you have the opportunity to undertake an in-company project? Are company visits and interactions with senior leaders from said companies part of your curriculum? Does the business school have a Business Advisory Board? Does the institution help with career advising and job placement? Accreditation & Rankings. Here, I have a slightly different view to most business school Deans. The MBA degree has a legal value and a market value. The legal value relates to the legal operation of the business school in your respective country. The market value comes from the specialised business accreditation agencies. The most prestigious ones are US and UK-based. They carry names such as ACBSP, IACBE, AACSB and AMBA. In regards to rankings, MBA applicants need to consider the following: Is the business school listed in multiple rankings? What is the school’s position in those rankings? How many years has the business school achieved a ranking? Final Thoughts... The peer pressure from stakeholders in the education industry keeps business schools alive and alert. It forces them to take the aforementioned challenges and opportunities into consideration. I strongly recommend that talented young managers yet to consider an MBA do so. It broadens your mind, it provides you with a personal network, it offers lifelong learning and, above all, it is worth your time and money. For experienced managers, reskilling and retraining is part of a lifelong learning process, where content focuses on today’s requirements and not past successes. An MBA does all of this! Keep on having fun learning, and see you maybe in Switzerland!
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BIOGRAPHY Bert Wolfs, Ph.D., is the Academic Dean of SBS Swiss Business School. 33
LEADERSHIP LAPSES: WHEN IS FIRING THE RIGHT RESPONSE? T he sequence of events is so familiar now as to be predictable. A CEO or high-profile employee commits a blunder or transgression, a social-media campaign fans the flames of outrage, and employer and employee appear to be left with no other choice but to part ways.
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Are there alternatives, or have we firmly settled into a culture that prefers firings and forced resignations? After all, the departure of leadership often means the loss of valuable talent and institutional memory, and changes to a key position can be costly to organizational momentum and mission. In fact, it is possible for a company to signal to constituencies, internal and external, that it is taking appropriate corrective action without firing the employee. But a lot depends on the transgression - an ethical lapse, or simply a failure? - as well as the transgressor. “Punishments are bigger for leaders because the audience for them is bigger: The message value of the punishment is more important,” says Wharton management professor Peter Cappelli, director of the school’s Center for Human Resources. “Transgressions that have to do with ethics and values are more serious and require bigger punishments because the internal audience is bigger - corporate culture is influenced by it.” He does wonder, though, why there are no demotions or other punishments in US companies. “In the military, for instance, officers who are punished often lose rank. Chinese companies routinely punish employees who fail. I suspect a lot of this in US companies is simply a mistake: We blame individuals for failures that are beyond their control.” But when a company errs, something must be done, and firing someone is often seen as the path of least resistance. “Thinking about what problem they are solving, when you fire someone it’s a very clear signal you are going in a different direction and a clear signal that you are taking the issue seriously,” says Wharton professor of operations, information and decisions, Maurice Schweitzer, who has written about the value of penance and apologies with co-author Adam Galinsky in Friend & Foe: When to Cooperate, When to Compete, and How to Succeed at Both. “If you want to communicate to shareholders that this is a serious issue and we believe ceo-mag.com / Autumn 2017
change is needed, then firing someone does that in a very powerful way. What else would it take to convince people that you are taking a significant action to effect change? It could be committing money to structural change, and there are alternatives that could send the same message as firing someone. But it has to be expensive; it has to be costly to somebody. Because if it’s just cheap talk, that may not be sufficient.” When Breaking Up Isn’t Hard to Do A spate of high-profile firings and forced resignations in the past few months suggests 35
that separations have become de rigueur. Three highly experienced CNN journalists stepped down this summer after the network said it could not fully stand by the reporting of a story on Trump acolyte Anthony Scaramucci. A dean at Yale was placed on leave, and then left her position permanently in June, after writing a Yelp review that recommended a restaurant for “white trash” customers and calling movie theater employees “barely educated morons.” Google recently found itself weighing freedom of expression against tolerating the proliferation of gender stereotypes when an internal memo written by a software engineer spread well beyond the company. The memo argued that the low number of women in technical positions was not because of discrimination, but stemmed from biological differences. The engineer was fired. While such episodes have surely generated outsize publicity, there is some statistical evidence to suggest that one kind of firing is becoming more common. CEO dismissals because of ethical lapses have increased by more than a third in the past five years, according to the 2016 CEO Success Study, by PwC’s Strategy&, which analyzed CEO successions at the world’s 2,500 largest public companies (based on market capitalization). Dismissals for ethical lapses globally increased to 5.3% in 2012-2016, from 3.9% in 2007-2011. The study’s authors don’t believe ethical lapses like bribery, sexual indiscretions, fraud and insider trading have increased, but that a higher level of public accountability has caught more lapses. More government regulation, the rise of social media, the 24/7 news cycle and a dip in the general public’s confidence in corporate conduct have all contributed to the current environment, meaning CEOs are under much greater scrutiny, and all stakeholders have much smaller margin for error. While it may appear that it is public pressure forcing corporations to take action when there is a transgression, this may be something of a mirage, according to Jonathan A. Segal, partner of Duane Morris’ employment group and managing principal of the Duane Morris Institute. “There are times when, due to pressure from various stakeholders, it appears that a company was compelled to terminate, and that’s because the process takes some time,” he says. “It looks as if it was in response to public pressure, and it’s not. I can think of at least a couple of times when, because some things were being done internally, it appeared as if the employer wasn’t doing anything.” Parting ways often seems like the only acceptable remedy, according to Wharton marketing professor Americus Reed. Keeping 36
the transgressor around is a viable strategy that depends on several factors, he says, including: how egregious the transgression is and how much “goodwill” the company has banked previously; the “brand” of the transgressor - “Is he or she humble or contrite, or a sympathetic character?”; and the immediate impact on sales and the longterm impact on the brand. What companies don’t want to do is to keep the person around and risk being perceived as condoning the behavior. “Usually, it’s safer in the above conditions to just cut bait, and not risk the immoral halo to the brand,” he says. “The other aspect that is tricky is that these CEO types always ‘fall forward’ - they get fired and get tremendous severance package benefits, so sympathy is hard to generate.” Indeed, if you are an employee who has messed up, how that mess gets cleaned up depends a lot on who you are. “In unionized workplaces where employers expect to have to prove that they had ‘just cause’ to discharge a person, there is a greater likelihood that lower levels of discipline will be meted out, such as short suspensions,” says Janice Bellace, Wharton professor of legal studies and business ethics. “Also, workers may be ordered to do some sort of course — for example, someone found to be using drugs may have to go to some sort of awareness program. In some ways, we see this with very high-ranking executives, albeit under other names. For instance, consider the case of a person who screams or shouts at work. A lower-level employee may be fired. The top executive may be given a coach or sent to an anger-management course.” Companies think that it is worth it to try to improve the behavior and performance of the higher paid person, but it seems that often lower-paid persons are deemed not to be worth the expense, she notes. “Yet when one considers the cost of recruiting another person, the loss of institutional knowledge, etc., the financial calculation may be wrong. This company response may also reflect the decline of a human resources training function as companies cut back on all types of training. HR trainers usually are adept at getting employees to be more self-aware.” When Apologies Work - and Why Sometimes, nothing can substitute for a good, public firing - even for a transgression that is not unethical or illegal. The recent Google episode involving the manifesto on women demonstrates that sometimes a company just has to send a message, says Schweitzer. “[The memo’s author] was not fired when he wrote that manifesto and began circulating it. It was only when it went viral externally and became a hot and well-read ceo-mag.com / Autumn 2017
manifesto that Google executives chose to fire him, and so they clearly did it not in reaction to the ideas that he was airing, but in reaction to the firestorm created when his ideas went viral. That’s a good example where social media changed the way Google reacted, and I think they wanted to send the message that they care about diversity - that they don’t endorse the idea that women are biologically different when it comes to programming or math, and firing an employee was a way to send that message.” Would an apology have helped? Maybe not in this case. In Friend and Foe, Schweitzer and Galinsky distinguish between core and non-core violations of trust. Core violations are a breach of trust within the most relevant, reputational domain, and are hard to come back from. Non-core violations are more peripheral, with surprisingly little residual damage. Accounting firm Arthur Andersen was found guilty of shredding documents relating to accounting practices at Enron, and never recovered. Martha Stewart, on the other hand, was found guilty of lying to investigators looking into a suspicious stock trade - a crime not related to her compact with lovers of hand-painted wallpaper and one-bowl chocolate cake recipes. “To many people’s surprise, Martha Stewart came roaring back,” they wrote. Successful apologies must happen with speed, they must come with a promise to change, and must include penance. “We want to see the transgressors suffer in some way. This helps us move forward because it demonstrates remorse,” says Schweitzer. “I think apologies work when they are perceived to be sincere and when there is remorse, and you can do that. But again, you need to signal remorse and sincerity in a way that is costly. So, to say, ‘I really mean it, I’m really going to change,’ people wonder: ‘How do I know that to be true?’ Firing someone is a good way to show proof. Are there other ways to signal change? Absolutely. But they are often more complicated and less visible and can be difficult to understand.” Demotions in lieu of dismissal are one less visible way, and they do happen, says Segal. Another less visible way is a monitoring period of, say, 120 days - a kind of one-lastchance deal. “The idea is that there is going to be some period of time to see whether the person can sustain the necessary improvements,” he says. Many have come to believe that the question of whether to jettison an employee or key leader requires not only decisiveness, but also individual consideration of the myriad factors in each case. “I would just observe that the issues are often the result of lack ceo-mag.com / Autumn 2017
of controls or fostering the right culture in an organization, sometimes not the CEO’s behavior him or herself. So, it is deeper,” says Gary L. Neilson, principal with PwC. “Sometimes it is about the CEO. Either way, companies want to move forward fast and not distract from the business issues. A program of behavior change may not be enough for these types of issues involving a lack of, or not paying attention to, moral compass issues.” If an organization is able to determine that the person they have in place is a good fit on compass issues, is there anything the firm can do to signal that it takes the transgression seriously and has taken corrective action? Or does life in the modern fishbowl make partings inevitable? In fact, a company often is taking corrective action, but because it’s going on behind the scenes, we never see it reflected in the press, says Neilson. “It might affect a bonus or a promotion [as in no promotion] that is more private. No records exist on this, but that is what I believe happens given my experiences.” No matter how plentiful and creative the alternatives, though, some companies will always choose the path of least resistance, and fire rather than taking the time to flog and fix. “Some of it may just be that it’s easier for leaders,” says Cappelli. “You don’t have to run into the person you punished.”
“CEO dismissals because of ethical lapses have increased by more than a third in the past five years.”
ACKNOWLEDGEMENT
Republished with permission from Knowledge@Wharton (http://knowledge. wharton.upenn. edu), the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
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LEARNING FROM THE BEST CEO Magazine’s Alexandra Skinner speaks to Jack Welch Management Institute alum, Jeffrey Palermo, founder and CEO of Clear Measure.
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Q. Why did you select the Jack Welch Management Institute for your Executive MBA? In 2007, I joined a small software company as CTO. Over the next five years, I helped to grow it from just four people to thirty. I was eventually promoted to President and needed to transition from a technology leader to a business leader. I knew I didn’t want to leave my career, so I began researching online programmes. I found the Jack Welch Management Institute (JWMI) and it piqued my interest. I subsequently purchased every book written by Jack Welch, read every article, and watched every interview on YouTube. I digested every bit of content I could find on Jack Welch. I researched other programmes, but the right choice for me became obvious very quickly. None of the other programmes offered me a person to model my leadership style after - a proven winner in business. For me, the decision to attend JWMI was a decision to adopt Jack Welch as a mentor and teacher, and I felt confident that the programme would deliver. There was also a lack of clarity on what I would learn from other programmes. Their offerings were very sterile and vague, leaving me uncertain that I would learn anything useful. At JWMI, I knew I would be gaining practical business skills based on Jack’s experiences as a CEO. I was not interested in getting a degree for academia’s sake. I was already working in my field. I was an accomplished software engineer and architect and wanted to grow as a leader in my industry. I wanted to learn and gain new capabilities, not just hang a diploma on my wall. So JWMI’s clear philosophy, combined with the ability to study a proven leader, and the confidence that I was going to gain practical business skills, made the choice to select JWMI very simple.
“I wanted to learn and gain new capabilities, not just hang a diploma on my wall.”
Q. Which classes did you find most helpful? I learned something in every class, but there were two courses that changed my world - Operations Management and Executive Graduate Capstone. Through the Operations Management class, I was able to apply the materials and readings in my job each week. For example, at the time, I was leading a consulting company where we were billing by the hour. In consulting, you have 100 percent inventory spoilage at the end of the day. You can’t sell yesterday’s hours today - it’s the nature of a services business. So the tactics I was learning in class to manage throughput were extremely beneficial and easily transferable to my work. The Capstone class was instrumental in giving me the confidence to start a new ceo-mag.com / Autumn 2017
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BIOGRAPHY
Jeffrey Palermo is founder and CEO of Clear Measure, an expert software engineering firm based in Austin, TX with employees across North America. He recently won the prestigious Austin (TX) Under 40 Award for the Technology category. He has been recognised as a Microsoft MVP for 10 consecutive years and was featured at national conferences such as Microsoft Tech Ed, VSLive, and DevTeach. He is a published author, with articles appearing in industry magazines, and co-author of the book, ASP. Net MVC in Action. He holds degrees from Texas A&M University and Jack Welch Management Institute. He is an Eagle Scout and an Iraq war veteran. When not running Clear Measure, Jeffrey likes to spend time with his family of five out at the motocross track.
company. When I reached the end of the programme, I knew I’d accumulated enough business knowledge to be confident I wasn’t going to miss anything. I wasn’t worried about what I didn’t know anymore. I realised that as long as we modeled our value stream from inputs to outputs, and had the right KPIs to keep score, our company would turn a profit. I graduated in October of 2012, and Clear Measure started operations in January 2013. Q. Are you continuing to use what you learned in the programme today? The decision to enroll in JWMI, and persist, was the most strategic and impactful choice I’ve made in over a decade. You can always apply what you learn from the programme. The lessons are tested and proven by Jack Welch himself. At the end of 2017, Clear Measure will celebrate five years of business and, I continue to put policies and standards in place. We are figuring out the best management structure for our growing employee base. We are trying to align sales levels and investments. I do not claim to have it all figured out, but the JWMI curriculum has given me the tools and skills I need to analyse and improve every part of the business, and keep it balanced along the way. Q. In thinking about the JWMI online experience, how connected did you feel to your fellow students? I went through the programme with a fellow executive at the company I was working for at the time. He and I entered the programme together, we synchronised our
“At JWMI, I knew I would be gaining practical business skills based on Jack’s experiences as a CEO.”
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schedules and we studied together. I’ve connected with JWMI students and alumni as business associates via LinkedIn and other local user groups, post-graduation. I participate in the virtual Q&A held with Jack Welch on a quarterly basis. I’m never going to stop learning - when you can learn from the best, why wouldn’t you participate in the different opportunities made available to you? I’m also excited to give back to the JWMI community. As an entrepreneur, I have much to offer students who are interested in starting a business. And now that there are a growing number of JWMI students and alums in Austin, I look forward to connecting with them in person. Q. What are your biggest takeaways from JWMI’s MBA programme regarding skills or knowledge? During my undergraduate degree in business, I gained technical skills. In the military, I learned about teamwork. But I truly learned how to lead from JWMI. One of my biggest takeaways from the programme is that the business publications are wrong. They write about the BIG idea and strategies, which are important, but they miss what it takes to be successful - the people. JWMI teaches that the team with the best players is going to win. After that, you need strategy and operations management, but it all starts with the people. Afterall, everyone has ideas. What matters is whether you can execute on those ideas. Execution is where most people fail. You can have a great strategy, but if you don't have the right people and trust in those people, you will not be able to execute. If you have the best people and they're aligned with your strategy, you will drive great results, regardless of the business you’re in. Q. Regarding ROI, post-MBA, what are some of the benefits you’ve been able to accrue? As discussed, post-MBA, my colleague and I launched Clear Measure, a software engineering firm based in Austin, Texas. We help mid-market companies modernise their software, and aid in making technology new again. We take the hassle out of maintaining and supporting custom software and technology to keep companies running at peak efficiency. And, we’ve seen tremendous growth; our revenue has increased from $1.4 million in our first year to over $8.3 million currently. In addition to our financial success, we’ve been fortunate to receive some great accolades including the Austin Fast 50 Award for the #1 Fastest Growing Business in Austin, 2015 Best and Brightest Companies to Work For®, and personally, the Austin Under 40 Award within the technology segment. ceo-mag.com / Autumn 2017
WHY CORPORATE EARNINGS MATTER SO LITTLE TO AMAZON
A look at how Jeff Bezos’ alternative playbook achieves fantastic stock price appreciation HOWARD YU
N
o industry captain has garnered as much attention as Amazon’s chief executive Jeff Bezos. When the e-commerce giant announced the acquisition of Whole Foods, its share price shot up to a record high of US$1,017. With his net worth swelled to US$84.7 billion, Bezos passed Warren Buffett to become the world’s second-richest person, only behind Microsoft Corp co-founder Bill Gates. Perhaps because of this astronomic windfall, Bezos tweeted his 222,000-strong followers, asking them how to give some money away. “I’m thinking I want much of my philanthropic activity to be helping people in the here and now – short term – at the intersection of urgent need and lasting impact.” What made the rise of Amazon all the more
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remarkable was its paltry corporate earnings. Between 1995 and 2015, its culminate profit totalled US$2.56 billion. In contrast, Walmart, the bellwether retailer from Arkansas, generated US$14.69 billion in 2015 alone, six times more than Amazon’s 21 years of corporate existence. Still, investors could not stop buying Amazon’s shares. Measured by market capitalization, Amazon is now the world’s fourth-most valuable firm. Walmart does not even make it to the top 10. This is bizarre. For so many corporate executives, the most important task is to deliver steady income growth with increasing profitability. How could corporate earnings matter so little for Amazon? An inescapable mandate for managers in any 41
“Investors are more attracted by the growth prospects of Amazon, many times over, than the solid profitability doggedly pursued by Walmart.”
ACKNOWLEDGEMENT
Courtesy of IMD Business School. BIOGRAPHY
Howard Yu is professor of strategy and innovation at IMD Business School with campuses in Switzerland and Singapore. 42
corporation is to deliver results on time and on budget. It all begins with the corporate planning process that forecasts revenues, taking into account the uncertainties in the external environment. Top management typically extrapolates previous earnings and adds a certain percentage to meet the expectations of the investor community. Once the budget is fixed, the job of general managers is to deliver budgets: to “ship” the exact numbers to the headquarters quarter by quarter according to plans. The biggest fear among chief financial officers is the prospect of missing the consensus forecast among Wall Street analysts on corporate earnings. Indeed, according to a survey published in 2005 by John Graham at Duke University, a majority of finance chiefs considered missing the consensus forecast was tantamount to a major corporate setback. Some would even be willing to sacrifice future growth (by, say, cutting research and development) to meet the investors’ short-term expectations. What Amazon has made abundantly clear, however, is that setting high profitability alone does not drive stock performance. Investors are more attracted by the growth prospects of Amazon, many times over, than the solid profitability doggedly pursued by Walmart. Particularly in the age of ubiquitous connectivity powered by smartphones, embedded sensors and machine algorithms, business offerings often take the form of a networked platform. In the case of Uber and Airbnb, for instance, companies have taken on the role of a platform provider, facilitating sellers on the supply side and buyers on the demand side in their efforts to exchange goods or services. The value of a platform depends largely on the number of users on each side of the exchange. The convenience for Airbnb customers is due to the high number of independent hosts located in a city. Conversely, hosts are attracted to work for Airbnb because there are many potential travellers using the platform. This logic of a “network effect” looms large at Amazon. That explains why Kindle e-readers are priced at a rock-bottom US$59.99 apiece. Amazon must lure a large user base to force book publishers to opt for its e-book format, which in turn increases the size of the library for consumers. The low-cost strategy has also been the touchstone for Amazon’s Echo products, essentially Wi-Fi speakers – a sort of Siriin-a-tube – that listens to and obeys people’s commands. The Echo dot was sold for as low as US$29.99 during Black Friday last year. No
one can make much money at that price. But for Amazon, it is a race for a large installed base. As Bezos likes to say, “your margin is my opportunity”. Low-price strategy But the low-price strategy is only half of the equation. Amazon has also changed the way backend operations are conceptualized. As the firm moved from selling books and CDs to streaming movies and smart speakers, Bezos found new approaches to monetize bank-end infrastructure, which is normally seen as a cost centre, and turn it into new revenue streams. Back in 2012, Amazon started to open its internal computer servers – the backbone of any internet company – to external clients. So resolute was Bezos to win in this business that he insisted all services on the platform be built on an open API, or application programming interface, which allows Amazon’s computer servers to easily communicate with external parties over the standard web protocol. Companies such as Netflix or Dropbox can pay to use its infrastructure rather than building their own expensive servers. That was the basic idea behind Amazon Web Services, a cloud-based solution for the enterprise market. The same idea also applies to the artificial intelligence race. Upon the first launch of Amazon Echo, Bezos aggressively pushed his 1,000-employee Echo team to speed up certifying third-party apps, aka “skills”. In less than 18 months, Echo has mastered more than 10,000 skills, including Uber (hail a ride), Fitbit (review health statistics), Mixologist (make a cocktail), Domino’s (order a pizza), plus applications from other device makers (Philips, Samsung and General Electric). With so many third-party apps, even Google and Apple could not break into Bezos’ stranglehold on the voice-activated home speaker market. Alternative playbook What Amazon has demonstrated over the years is an alternative playbook to achieve stock price appreciation. Neither steady income growth nor high profitability is the only game in town. It is in fact acceptable to invest aggressively in expensive infrastructure while pursuing a low-price strategy. As long as a company can create the prospect of growth by turning in-house infrastructure into new services for third parties, investors are open to such an unconventional strategy. ceo-mag.com / Autumn 2017
SCIENCE SAYS YOU SHOULD TAKE A VACATION NOW
W
ED O’BRIEN AND ELLEN RONEY
estern culture has long honored the notion that work should come before pleasure—a vacation should, in theory, be the reward of many long nights at the office. But research suggests it’s time to stop always putting work ahead of fun. Chicago Booth’s Ed O’Brien and research assistant Ellen Roney find that people enjoy leisure just as much even when they know work will follow. Most people expect difficult or boring tasks ahead will spoil pleasurable experiences. In a series of surveys, respondents consistently said they would get less out of leisure if work loomed. But O’Brien and Roney conducted a series of experiments to actually test this intuition. In one experiment at Chicago’s Museum of Science and Industry, they find that study participants had as much fun playing computer games before completing a looming series of math and word problems as they did
when the tasks preceded the activity. (The math and word problems weren’t the fun kind such as sudoku and crossword puzzles, but a strenuous battery of cognitive tests.) Similarly, when the researchers offered University of Chicago students a spa experience either before or after the students had completed the bulk of their midterm exams, the results again demonstrated that the students found the massages and footbaths just as relaxing before exams as after. In both experiments, participants underestimated how much pleasure they would get from leisure ahead of experiences that were less pleasurable and more like work. The results suggest that when planning their breaks, people should remember that impending work won’t mar their free time as much as they fear. People might want to take vacations rather than delay days off and risk burnout.
“The results suggest that when planning their breaks, people should remember that impending work won’t mar their free time as much as they fear. People might want to take vacations rather than delay days off and risk burnout.”
ACKNOWLEDGEMENT
Courtesy of the Chicago Booth Review. ceo-mag.com / Autumn 2017
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veryone wants to pick the brains of successful leaders but the secret lies not in the brains of others - it’s in your own. Understanding how the brain operates and developing techniques to harness its power can help leaders foster innovative and dynamic teams, manage challenging situations and effectively handle the unexpected.
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Developing deliberate calm Dr Paul Gibson, a senior lecturer at RMIT University who has spent decades researching the science of leadership, says one of the best methods of emotional and thought control is borrowed from the airline industry. “Leaders often find themselves in situations that are very emotionally challenging and that interfere with calm decision-making,” he says. “They need to be able to recognise what’s happening and practise what airline pilots call deliberate calm. In other words, being aware your body is in a state of panic, but not acting on those feelings.” As an example, Gibson cites the case of Captain Chesley Sullenberger, who safely landed a US Airways flight in the Hudson River after one of the plane’s engines was damaged. “Pilots practise deliberate calm in their simulations, so if they can manage that when there’s no engine and 200 people on board, it follows - although it’s difficult - that it’s also possible for leaders to learn how to stay calm.” Brain power Getting the knack of techniques such as deliberate calm becomes easier once leaders understand how the three parts of the brain function. The first is the cerebellum, or brain stem, which is similar in structure to the reptilian brain. It controls the fight, freeze or flee instincts. The second is the limbic system, which is much like the brains found in mammals, and is responsible for emotional reactions. The third part of the brain is the neocortex and it’s involved in higher-order functions such as sensory perception, spatial reasoning and cognition. In times of stress, the brain can become emotionally hijacked. When this happens, reactions are dictated by the cerebellum or limbic system and never make it to the neocortex. This explains why some leaders panic under pressure, which is essentially when they’re needed most. “You can’t develop deliberate calm unless you’re aware there will be situations where your reptilian brain and limbic system are panicking, but acting on that panic can often be the wrong thing to do,” Gibson says. “Unless people practice what’s involved in staying deliberately calm, they’ll be overcome by the panic.”
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“By questioning typical responses, leaders can learn to handle difficult situations smarter and more efficiently.”
ceo-mag.com / Autumn 2017
Re-wiring Neurons fire continuously as the brain evaluates and plans for what could come next, but the brain’s predictive power has a downside. Over time the brain becomes hardwired to respond to situations in certain ways. For example, we may choose to avoid confrontation by walking away from heated arguments or simply acquiescing to demands from others. Without challenging these reactions, the brain forms habits and stops leaders from pursuing alternatives. One of the best ways leaders can grow is to challenge their norms, Gibson says. “They stand up in front of other people and say, ‘the way we’re treating our customers is less than adequate’ or ‘we need to switch our manufacturing’,” he says. “For some people that’s a very difficult thing to do because they haven’t developed a feeling of comfort that they need if they’re going to challenge others and that’s how the brain can interfere and slow down the process of becoming more effective.” Scientists once thought the brain remained dormant until it needed to respond to an event. But we now know neurons are constantly firing as the brain evaluates and predicts what’s going to happen next. The downside of the brain’s predictive ability is we often see what we expect to see. “It means if you’re in a leadership role you could form a negative opinion of some of the people who report to you based on one or two experiences,” Gibson says. “You’re going to expect them to behave in some of those negative ways and you’re more likely to see that instead of their strengths. “Unfortunately, the brain’s predictive power can get in the way of your ability to bring out the best in others because you’re not seeing it – not necessarily because it’s not there, but because we get tied into seeing what we expect.” By questioning typical responses, leaders can learn to handle difficult situations smarter and more efficiently. Organisations have previously competed on the fronts of productivity, quality and customer service. Now that many organisations have mastered these, leadership is the next frontier. Gearing the thinking brain to outsmart the emotional brain will help today’s leaders nail the challenges they confront tomorrow.
BIOGRAPHY
Dr Paul Gibson is a Senior Lecturer in the Graduate School of Business and Law. He coordinates and lectures in the Leadership and Management course in the MBA and designed the Leading People and Organizations course in the Executive MBA. Gibson is also the Coordinator of the Higher Degrees by Research PhD Programs in Business and in Law.
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ceo-mag.com / Autumn 2017
11 LEADERSHIP GUIDELINES FOR THE DIGITAL AGE The old ways of running a company won’t cut it in a digital world. LIRI ANDERSSON AND LUDO VAN DER HE YDEN
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en years ago, when we would ask senior executives or company directors what “digital” meant to them, their response would usually be something related to social media. Today, it might be apps, Big Data, 3D printing, “the cloud” or another current example of digital technology. All such answers are equally correct – and equally in error. More important than the specific innovations introduced by the digital revolution is their earth-shaking cumulative impact on business and on organisations. There is no border anymore between the pre- and post-digital worlds. Digital is business and business is digital. Yet, top corporate leaders are not taking charge of digitalising their organisations, as was made clear to us by a survey we conducted in 2016 – to which 1,160 managers, executives and board directors responded – that developed into a report available for free online. We discovered that most board members lack the knowledge and awareness necessary to lead a digital transformation. To help top management catch up, we recently issued a follow-up report – “Directing Digitalisation: Guidelines for Boards and Executives”. It presents 11 ceo-mag.com / Autumn 2017
strategic implications and recommendations (grouped into three categories), summarised below. These are based on the previous findings, our combined business and teaching experiences, and professional collaborations with organisations across multiple regions and industries. The Business Environment 1. Digitalisation requires an unbiased understanding of the external environment. Analogue-era frameworks such as Michael Porter’s “five forces” will need to be revisited now that the impact of digitalisation is rapidly replacing traditional physical barriers to entry with intangible barriers (e.g. relevant purpose, resonant mission, authenticity and trust) that no amount of industry prominence or cash can overcome. The Organisation 2. Digitalisation may require a reformulation of the firm’s mission. The environmental shift caused by digital may challenge the very existence of individual companies, even entire industries. Boards and executives will need to question all pre-existing assumptions about the firm’s mission and industrial
“Boards and executives will need to question all pre-existing assumptions about the firm’s mission and industrial positioning, as well as the sustainability of its business models and methods.”
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positioning, as well as the sustainability of its business models and methods.
“As with any large-scale cultural change, digitalisation will never take hold unless it is driven by top executives under the board’s leadership.”
ACKNOWLEDGEMENT
Courtesy of INSEAD Knowledge. BIOGRAPHIES
Liri Andersson is the founder of this fluid world: a boutique business and marketing consultancy that enables Fortune 500 organisations to understand, navigate and commercially exploit the changing business and marketing environment. Ludo Van der Heyden is the Chaired Professor of Corporate Governance and a Professor of Technology and Operations Management at INSEAD. He is the founder of the INSEAD Corporate Governance Initiative, co-director of the International Directors Programme and Value Creation for Owners and Directors and lectures on governance, leadership, and business model innovation. 50
3. The meaning and impact of digital to the firm must be clearly stated. Digital advantage resides largely in the opportunity to customise not only products and services but also organisational strategy and structure. Rather than searching for a blueprint to guide them through digitalisation, firms should define their own digital road map. Leaders can start by developing an in-house dictionary, including entries for “digital” and all related keywords, terms and concepts. Like any other dictionary, it will need frequent updates. 4. Digital understanding and capabilities are required across the firm. Digitalisation may involve a great many experts, but the ultimate responsibility for digital transformation belongs to all functions within a firm. Successful change also requires cooperation from junior contributors all the way up to the board by linking digital savvy millennials with the business experience and wisdom of senior executives and directors. 5. Digitalisation must be supported by the firm’s corporate culture. The digital revolution is indeed cultural, not merely technological. As with any largescale cultural change, digitalisation will never take hold unless it is driven by top executives under the board’s leadership. 6. Digitalisation demands a greater level of collaboration. Business success can be achieved only through continuous collaboration and ongoing conversations between shareholders, boards, executives and “frontline” employees. In addition, digitalisation is blurring the lines between different industries, heightening the importance of cross-functional and external collaboration. 7. Digitalisation requires greater engagement with the public. In the past, customers were subdominant. We spoke at them; we marketed to them. With digital, anyone can create and monetise value with size, scope and speed. Just as easily, consumers can destroy value by, for example, dismantling a massive company one tweet at a time. It has never been easier or more essential to co-create with customers and crowdsource ideas, and firms that position themselves as facilitators of customers’ dreams will win in the future. Strategy 8. Business strategy in the digital age becomes
a continuous process. Gone are the days when companies had the luxury to think in terms of five-year strategic plans. With major business trends shifting constantly as they are today, strategy formulation and execution need to happen simultaneously and ideally in a seamless feedback loop. 9. Decision-making in the digital age is increasingly data-driven. Compared with the plethora of advanced predictive and analytics tools available to businesses today, the old-fashioned executive summary laying out binary choices is a primitive instrument. In the absence of Big Data, what used to be allowable as an “educated guess” will become at best a stab in the dark. 10. Digitisation requires firms to enter uncharted territories. Planning for disruption entails exploring new business models and revenue streams. Organisations will have to launch ambitious experiments and quickly take learnings on board. For their part, boards and executives must raise their comfort level as regards uncertainty, ambiguity and risk. 11. Digitalisation is about continuous management of change. In the pre-digital world, a one-off change management programme could pay dividends for years if not decades. Not anymore. Directors and executives must ensure that the will and ability to continuously change are built into the very fabric of the organisation. Responding to revolution The digital revolution, like every revolution, can be viewed either as a catastrophe or as a world of opportunity – depending on whether your allegiances lie with the old order or the new. Optimism is a prerequisite for survival. Digital will undoubtedly force boards and executives to attain unprecedented levels of innovation, competence, effectiveness, leadership and responsibility – with fundamentally positive results for both firms and society. It is unlikely that familiar forms of organisational leadership will survive the digital revolution. In order for boards and executives to fulfil their roles effectively in the future, a reshaping, if not a disruption, of these functions is necessary. The report was launched in connection with INSEAD Directors’ Forum and the 10th Award Ceremony of the Certificate in Corporate Governance on 27 February, 2017 at INSEAD’s Asia campus. ceo-mag.com / Autumn 2017
INSPIRED BY PUBLIC VALUE MARTIN KITCHENER
All types of business schools must articulate their long-term worth to society if they are to remain viable and relevant. That idea has led Cardiff Business School to adopt a public value mission focused on addressing the world’s “grand challenges.” ceo-mag.com / Autumn 2017
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L “By committing to public value, business schools serve a much greater good.”
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ike many business schools, Cardiff Business School, Cardiff University in Wales, U.K., faces a number of challenges, from the reduction of state financial support to increased competition for staff, students, and research funding. We hear critics question the legitimacy, ethics, and relevance of business education and management scholarship. We share the sense that our enterprise is under intense scrutiny, and we perceive a need to revalidate our license to operate by forging a new social contract with the world around us. To address these challenges, we all first must ask the same question: How do business schools contribute to the economy and society? I have become increasingly convinced that business schools need to more formally develop and articulate the value they provide to the world. So, just after I assumed the role of Cardiff’s Dean in 2012, I launched a thorough review of our institution—via informal discussions, staff workshops, committee meetings, and interactions with stakeholders—to determine who we were as a school, what kind of school we wanted to be,
and why society should support our vision. The result was the creation of what we call our “public value strategy”—a strategy that “promotes economic and social improvement through interdisciplinary scholarship that addresses the grand challenges of our time.” In the year since we launched that mission, we have worked to ensure that it underpins our governance, research, and teaching. Inspired to act Our initial discussions were inspired by two sources. The first was the work of sociologist Professor John Brewer of Queen’s University in Belfast, Northern Ireland. As past president of the British Sociological Association, Brewer had become concerned about how social science could make itself relevant to the problems facing humanity in the 21st century. In his 2013 book The Public Value of Social Science, Brewer presents a manifesto for the future of social science, one that contributes both economic and social value through scholarship. Brewer’s vision combines three features: interdisciplinary cooperation, deeper engagement with society, and focus on the world’s grand challenges. This manifesto struck a chord with us, sparking lively and farreaching conversations. We realized that as a research-led business school with five large departments, Cardiff was well-positioned to respond to Brewer’s call to develop strategies around economic and social improvement. Our second inspiration was the work ceo-mag.com / Autumn 2017
of Mark Moore, the Hauser Professor of Nonprofit Organizations at Harvard University’s John F. Kennedy School of Government in Cambridge, Massachusetts. Moore focuses on how to implement public value strategies within organizations. His key message is this: to ensure alignment with its authorizing environment, an organization must engage with a full range of stakeholders. That means that a business school must interact with its university’s entire community of faculty, staff, students, university leaders, alumni, advisory board members, recruiters, and employers. After our faculty had opportunities to conduct formal and informal discussions, I established a series of workshops where the entire school, including staff in academic and professional services, worked collectively to articulate a vision. These workshops ran for many months. We debated our strengths and weaknesses, identified internal and external challenges, and began to outline our responsibilities to stakeholders. I wanted the process to be inclusive so that everyone in our community would be invested in the result. My management team and I distilled what we learned in these conversations into a clear, succinct vision and mission, driven by the central philosophy of public value. We finalized our strategy by publicly committing the school and its resources to delivering economic and social value to all stakeholders, via presentations to the university’s executive board and council and at the annual conference of the U.K.’s Chartered Association of Business Schools. We’ve also built our vision into our student induction and enrollment program, including the creation of an animated teaching video that highlights the importance of interdisciplinary thinking and the role of management in solving social challenges. (Find the video at http://www. cardiff.ac.uk/business-school). We are placing the delivery of public value at the heart of our school. Public value in action: Governance As part of our strategic shift, we wish to act as both thought leaders and role models. To this end, we have changed our approach to school governance. First, we created our Shadow Management Board (SMB) to invite more diverse participation in the school’s decision-making process. The 14-member board includes a mix of junior and senior faculty members and professional services staff from across the school. The SMB scrutinizes the work of our management board and provides a channel for our staff to weigh in on senior management discussions and decisions in real time, whether via its formal reports ceo-mag.com / Autumn 2017
or through regular discussions with management board members. For example, the SMB recently conducted a review of our postgraduate teaching portfolio and completed an evaluation of the relationship between the school’s academic and professional staff. The school is in the process of implementing many of its recommendations in both areas. The SMB also provides a development opportunity for our faculty and staff: This year, Rachel Ashworth, a professor of public services management, became the SMB’s first academic member to graduate to a position on our full management board. Our second major change in internal governance was to make interdisciplinary and challenge-led scholarship an essential part of our hiring criteria for all academic appointments. When we use the term “challenge-led scholarship,” we are referring specifically to research focused squarely on improving or solving social problems. So far, we have hired six full professors and five other faculty on that basis. Third, we have made sure that our public value mission is increasingly influencing our external engagement activity. Specifically, we have publicly committed ourselves to external initiatives that align with our public value mission to promote economic and social improvement. These include 50-50 by 2020 (5050by2020.org.uk), a Welsh campaign to encourage organizations to increase women’s representation in leadership positions to 50 percent by the year 2020. We’ve also adopted several initiatives related to diversity, including efforts to improve the representation of women on boards and committees, policies to help new parents return to their careers after maternity and paternity leave, and the appointment of a fulltime equality and diversity officer. The Equality Challenge Unit, which promotes diversity initiatives in higher education institutions in the U.K., recently recognized our school with its Athena SWAN Bronze Award for gender equality. Currently, Cardiff is one of only two business schools in the U.K. to hold this distinction. We’re now preparing a submission for the Silver Award based on the outcomes of these initiatives. We’ve developed new relationships with other organizations committed to social improvement. For example: n We are partnering with Business in the Community (www.bitc.org.uk), a charity that enables businesses to work together to tackle key social issues. The BITC is part of The Prince’s Charities, a group of not-for-profit organizations led by Charles, Prince of Wales. n We are developing a partnership with
“I have become increasingly convinced that business schools need to more formally develop and articulate the value they provide to the world.”
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“Variety was once a celebrated strength within global business education. However, in recent years, multiple forces have encouraged business schools to converge around a limited set of models.”
“We are fully invested in helping to solve some of the major economic and social challenges of our time.”
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Enactus (enactus.org), a global community of student, academic, and business leaders “committed to using the power of entrepreneurial action to transform lives and shape a better, more sustainable world.” n In January 2016, just after we launched our public value strategy, Cardiff Business School became a signatory of the United Nations Principles for Responsible Management Education initiative (unprme.org). As a PRME signatory, Cardiff must submit and post “Sharing Information on Progress” reports at least once every two years. These reports outline our activities related to sustainability in our teaching and research. Public value in action: Teaching We’ve made a commitment to produce graduates with a strong moral sentiment and empathetic imagination that they can apply to solving the social and economic challenges of our time. That has meant designing a curriculum that encourages students to question the status quo, provoke change for the benefit of society, and become ethical leaders with the confidence and critical capacity to work differently and think holistically. As one example, we recently revised the management consulting elective of our MBA program to focus on local charities— or what we call third sector organizations (TSOs). We have made this change primarily because many TSOs lack leaders with key business skills; at the same time, they cannot afford to send their leaders to attain quality management education and are often unable to compete on salary for experienced managers. To help compensate for that, our MBA students now complete eight-week consultancies during which they help TSOs identify manageable projects and decide on courses of action. Through their work on these projects, we hope that our MBAs are developing the characteristics of ethical, thoughtful leaders equipped with the skills to tackle social challenges. While helping to upskill TSO leaders, our MBAs are immersed in worlds that many have not encountered before; they interact on a personal level with alcoholics, the homeless, the poor, and the bullied. As students observe and analyze the economic and social contexts for these disadvantaged communities, social problems are made real to them. In the process, our students develop a moral and sympathetic view of disadvantaged populations—as well as a desire to make a difference. As another example, our faculty have arranged for our undergraduate international human resource management students to participate in projects related to the Decent
Work Agenda of the U.N.’s International Labour Organization (ILO). Under this agenda, the ILO works with employers, government agencies, and workers to design programs and policies that provide decent jobs and livable wages for all workers. Our students investigate contexts where people do not have access to meaningful employment; they then present their findings in poster presentations to other students and faculty. The objective of the project is to help students develop a greater understanding of, and sympathy for, workers who face impediments such as wage stagnation, poor working practices, and a lack of social protection. In addition, we are currently generating a searchable “resource bank” of teaching case studies, which we plan to make available to our colleagues this summer. This bank will offer public-value-relevant resources for learning and teaching that have been created by faculty from both the business school and other parts of the university. Public value in action: Research We now encourage our faculty to address society’s grand challenges through their scholarship, and to do so in novel, interdisciplinary ways. Here is just a sampling of their work so far: Reducing alcohol-related violence. A team of researchers from the business school, led by economist Kent Matthews, is working with colleagues from medicine, dentistry, and public policy to address alcohol-related crime. Prompted by a maxillofacial surgeon who was seeing a considerable increase in the number of jaw and cheekbone injuries in his practice, the research team developed what is called the Cardiff Model, in which emergency departments record details of patient injuries caused by violence, including the geographical location of the event and the type of weapon used. Our researchers combined this information with police, economic, and environmental data to create an econometric model that shows that the rate of violence-related injury is negatively related to the real price of beer. They concluded that increased alcohol prices would result in substantially fewer violent injuries and reduced demand on trauma services. Ensuring a living wage for low-income workers. Edmund Heery, professor of employment relations—with Cardiff colleagues Dr Deborah Hann and Dr David Nash, lecturers in human resource management—has carried out research on the U.K.’s Living Wage, a voluntary wage standard that has been adopted by more than 3,000 employers. Working closely with the Living Wage Foundation, the organization that promotes ceo-mag.com / Autumn 2017
the standard, the Cardiff team has surveyed all living wage employers to identify the benefits and challenges that are associated with applying an ethical wage policy. This work has been widely reported in U.K. media and has directly shaped the campaign to further spread the living wage across the U.K. economy. Promoting sustainable development in Africa. Tim Edwards of our Responsible Innovation Network has been working with a charity in Eritrea, Africa. Together, they are building a research program with a local college to assess the community impact of climate resilient agriculture systems. These efforts will support women-run microbusinesses in agriculture. We want these types of research projects, focused on identifying and addressing economic and social challenges, to be the norm at our school. We already have several interdisciplinary collaborations and active research groups that are addressing issues of mutual interest, and we want to inspire more such work across the university. By introducing an explicit public value imperative within existing and new research, we can make the best use of our resources for the greatest good. What does the future hold? We have developed an ambitious roadmap for the expansion of our public value strategy within the business school, across the university, and beyond to the local and global community. The lessons we’ve learned so far might provide a blueprint for other business schools: Lesson No. 1: It takes time, effort, and patience to achieve an organic revolution. To be successful, a school cannot rush the process of completely changing its culture, practices, and attitude. Lesson No. 2: Bring faculty, staff, and stakeholders along at every step. We’ve been careful to include their input as we reviewed and revised our processes and activities. We secured the support of the university executive board, and we articulated our new direction and strategy to stakeholders. We encouraged input to our strategy at all stages. This has led to a natural, user-led engagement with our public value proposition. Once we earned the buy-in of our staff and students, we could accelerate our work. Lesson No. 3: Build a community of collaboration dedicated to translating research into effective solutions for society. To achieve this goal, we’ve worked with colleagues across the university—in an initiative led by our dean of research, innovation, and ceo-mag.com / Autumn 2017
enterprise Rick Delbridge—to develop our Social Science Research Park (SPARK). The new facility will provide a collaborative environment that crosses disciplines, sectors, regions, and nations. When completed in 2018, SPARK will bring together more than 300 social science researchers to address society’s grand challenges. SPARK will be housed alongside an Innovation Centre that will host and support startup and spinout businesses in a 12,000-square-meter facility. There will be events and exhibition spaces, as well as technical facilities to support interdisciplinary research. The goal is to engage practitioners, policymakers and the public in the work we undertake. Lesson No. 4: Dare to be different. Variety was once a celebrated strength within global business education. However, in recent years, multiple forces have encouraged business schools to converge around a limited set of models. I fear that, left unattended, these pressures could lead us to sleepwalk into an increasingly homogeneous future, in which business education becomes sanitized and diminished to such an extent that it is no longer socially relevant. By committing to public value and interdisciplinary scholarship, business schools not only can maintain their diverse perspectives, but also serve a much greater social good. We know we’ve set a bold agenda, but we are playing the long game. We are fully invested in helping to solve some of the major economic and social challenges of our time. We’ve made this change because we believe that the purpose of business schools goes far beyond one defined by abstract theories and purely economic concerns. This is an exciting time, not just for Cardiff Business School, but for business education. We hope that our strategy might inspire other schools, and we are eager to work with colleagues across the globe to help develop a new social contract between business schools and the world around us. *This article originally appeared in the March/April 2017 issue of BizEd magazine at bized.aacsb.edu.
BIOGRAPHY
Martin Kitchener is the Dean of Cardiff Business School at Cardiff University in Wales, United Kingdom. 55
n Liri Andersson
n University of Chicago: Booth
n Bain & Company n Mark Crowley
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N U O V P W Q X R Y S M Z T H I J K
n RMIT University n USciences
n Ludo Van der Heyden
n Ed O’brien
n W Ja Ma elch ck Ins nag titu em te ent
A B C D E F G
n The
Wharton School of the University of Pennsylvania
n IMD n INSEAD
n Jeffrey Palermo
n Martin Kitchener
n Bert Wolfs
n Ellen Roney
LIST OF CONTRIBUTORS
n Howard Yu
n Cardiff Business School
n SBS Swiss Business School
n Mike Zeliff
ceo-mag.com / Autumn 2017
Viktor Göhlin Founder, Nokadi Alumnus 2006
Emilija Petrova Managing Director, Trade Resource GmbH Alumna 2002
Bart van Straten General Manager, Van Straten Medical Alumnus 1996
YOU!
Roxana Flores Founder, BeCaridad Alumna 2011 Peter von Fortsner Managing Director, Häusler Automobiles Alumnus 2010
Supareak Charlie Chomchan
Managing Director, Pacific Rim Rich Group Co., Ltd. Alumnus 2003
At EU Business School, you don’t just learn from entrepreneurs, you become one! Business school is where you build good habits, learn the theory, pick up practical skills and obtain the knowledge necessary to put your ideas into action. You need a business school
that will help you develop both as a businessperson and an entrepreneur. At EU Business School we make a difference in students’ lives and propel them to success.
BARCELONA | GENEVA | MONTREUX | MUNICH | ONLINE
PEOPLE HAVE IDEAS. ENTREPRENEURS MAKE THEM HAPPEN.
ceomag.co.uk / Spring 2016
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IN T
. . . F O S S E N I S U HE B
H C R A E S E R G L E V E L LEADIN L A N O I T A N R E T N I ON AN
Shawn Rohlin, Ph.D. Associate Professor of Economics, Director of Center for Entrepreneurship and Business Innovation
Bob Hisrich, Ph.D. Associate Dean for Graduate and International Programs, Bridgestone Chair of International Marketing
S R E D A E L L A B O L G E R U G FUT
EDUCATIN
120+ partnerships
with institutions in countries including Brazil, China, France, Italy and Slovenia
$2,500
scholarship awarded to all business students in education abroad programs
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SEE WHERE WE ARE HEADED WWW.KENT.EDU/BUSINESS/UPWARD ceomag.co.uk / Spring 2016