CEO-MAG.COM
/
WINTER 2018
CREATING CHANGE-MAKERS AT THE UNIVERSITY OF VERMONT
THE WAR FOR TALENT IN 2018
HOW TO MANAGE CONFLICT: SIX ESSENTIALS
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
Supareak Charlie Chomchan
Peter von Forstner Managing Director, Häusler Automobiles Alumnus 2010
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
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BARCELONA | GENEVA | MONTREUX | MUNICH | ONLINE
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.
PEOPLE HAVE IDEAS. ENTREPRENEURS MAKE THEM HAPPEN.
ceomag.co.uk / Spring 2016
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HERE’S WHY BILL GATES CALLS STEVEN PINKER’S ‘ENLIGHTENMENT NOW’ THE GREATEST BOOK HE’S EVER READ Mark Crowley
MBA RANKINGS CEO Magazine
TABL CO N E O F TENT S
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CREATING CHANGE-MAKERS David Jones and Stuart Hart
CROSSING $1 TRILLION: WHAT’S NEXT FOR APPLE Knowledge@Wharton
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ceo-mag.com / Spring/Summer 2018
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THE CHANGING FACE OF WORK David Goodwin
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THE SHEFFIELD MBA: BEYOND POTENTIAL Ian Proctor
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TACKLING AI’S UNINTENDED CONSEQUENCES Chris Brahm
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REWRITING THE RULES OF ENGAGEMENT: CONNECTING WITH TALENT IN THE 21ST CENTURY EU Business School
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EMPOWERING AND TRANSFORMING AFRICAN LEADERS Enase Okonedo
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ceo-mag.com / Spring/Summer 2018
ceo-mag.com / Autumn 2016
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4
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HOW TO MANAGE CONFLICT: SIX ESSENTIALS George Kohlrieser
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THE ISEG MBA: PERSONAL AND PROFESSIONAL TRANSFORMATION Jorge Gomes
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WHEN DOING GOOD GARNERS BAD PRESS Georg Wernicke
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LIFE DURING ‘AND AFTER’ THE EXETER MBA Tausif Bordoloi
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HOW TO PREPARE THE ORGANIZATION FOR A NEW MINDSET Michael Lewrick, Patrick Link and Larry Leifer ceo-mag.com / Spring/Summer 2018
KSU EXECUTIVE MBA YOU BRING YOUR DRIVE TO SUCCEED; WE’LL PROVIDE EVERYTHING ELSE. You need an EMBA to accelerate your career. So we’ve designed a unique program that will help you quickly achieve your goals. Starting from day one, you’ll meet coaches and mentors who will support and advise you, and be immersed in a team designed to help you hone your management and leadership skills. KSU’s EMBA program was ranked #1 in Georgia and 9th in the world by CEO Magazine in 2017. One reason is because no other EMBA program will work harder to get you started right, right now. “KSU helped instill in me a belief that it is critical to be a lifetime learner. You have to keep challenging yourself if you want to find success. I am so thankful for the time I spent at the University and for the impact the program has had on my career.” – Jennifer Van Buskirk, Northeast Regional President for AT&T Mobility EMBA Class of 2004
Coles College of Business | Aspire to More™
KSUEMBA.com
TABLE OF CONTENTS 54 58
LEVERAGING YOUR EMBA Vonda Reeves-Darby and Sara Gleason HOW TO GET A COMPANY OFF THE GROUND Waverly Deutsch
56 THE FOUR PILLARS OF ACCELERATING LEADERSHIP DEVELOPMENT Ines Wichert
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LIFE IN START-UP NATION: TWO YOUNG FRENCH ENTREPRENEURS SPEAK OUT James Costantini and Dawn Jarich
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LIST OF CONTRIBUTORS
ceo-mag.com / Spring/Summer 2018
CEO Victor J. Callender Group Editor-in-Chief Alexandra Skinner Design & Illustration pentacreate.com Financial Controller Anthony Gordon
Head Office: Communications House 26 York Street London, W1U 6PZ UK Telephone: +44 (0) 870 067 2077 (UK) Fax: +44 (0) 870 067 2078 (UK) Email: a.skinner@ceo-mag.com Web: www.ceo-mag.com
Head of Production Steven Whitaker Features Writer Amber Callender
@ceo_mag
/CEOMagazineGlobal
Published by CEO Magazine. All rights reserved. No part of this publication may be reproduced without the expressed approval of the copyright owner. Whilst every effort has been made to ensure the accuracy of the information in this publication, the Publisher accepts no responsibility for errors or omissions. The Publisher disclaims responsibility for the views and opinions expressed herein by the contributors. Furthermore, the Publisher does not give any warranty regarding the accuracy thereof. For further information on annual subscription rates visit: www.ceo-mag.com
the degree the world
demands. uvm.edu/si-mba
the sustainable innovation mba is a one-year business program designed to give you the knowledge, skills and capabilities to transform today’s business and create tomorrow’s sustainable and successful enterprises.
ranked no.1 Green MBA by The Princeton Review
HERE’S WHY BILL GATES CALLS STEVEN PINKER’S “ENLIGHTENMENT NOW” THE GREATEST BOOK HE’S EVER READ MARK C. CROWLEY
A
s I started reading Steven Pinker’s new bestseller, Enlightenment Now: The Case For Reason, Science, Humanism And Progress, I must admit I was curious to learn why Microsoft founder, Bill Gates, called it the greatest book he’s ever read. And after making it through only a few pages of the preface, I thought I had my answer. Harvard psychology professor, Pinker packs more information into his sentences than any mere mortal could ever accomplish. Filled with astonishing erudition, brilliant references, and stunning conclusions, this is a book written by a genius for geniuses! The thought even crossed my mind that only a Mensa member could fully benefit from this book. “No wonder Gates loves this!” 8
But as I kept reading through its nearly 500 pages, I soon realized my initial assessment was entirely wrong. Gates didn’t herald this book for its style. He lauded it for its research – and for Pinker’s perfect timing in urging readers to start embracing optimism instead of the negativity that pervades so much of today’s discourse and thinking. “Ordinary people think the world is going to hell in a hand basket,” Pinker writes, “and a solid majority of us believe our country is headed in the wrong direction.” And it’s easy to see why people feel this way. “Every day the news is filled with stories about war, terrorism, crime, pollution, inequality, drug abuse and oppression. We never see a journalist report live from a country to say ‘war has not broken out here.’” ceo-mag.com / Spring/Summer 2018
“Experiments have shown that a critic who pans a book is perceived to be more competent than a critic who praises it, and the same may be true of all critics in society.�
ceo-mag.com / Spring/Summer 2018
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In response, Pinker fills his book with chapter upon chapter of evidence that proves human life is only getting progressively better. We have fewer wars, less violence, more freedoms - and life expectancy has increased by 10 years in just the past half century. In areas of health, wealth, equality, the environment and overall wellbeing, all of it is ascending.
BIOGRAPHY
Mark C. Crowley is a speaker, leadership consultant and the author of Lead From The Heart: Transformational Leadership For The 21st Century. Connect with him on Twitter, Facebook and at his website.
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Consider these compelling examples of how life is actually improving: ● Two hundred years ago, no country in the world had a life expectancy above 40. By 1950, it had only grown to 60. In 2015, it reached 71.4 years. ● People today live far more years in good health than their ancestors lived altogether, healthy and infirm years combined. ● The developing world is feeding itself. Famine deaths are on a steep and steady decline. India’s billion people average 2,400 calories per day. In Africa, it’s 2,600. ● Noting that the richest 1% of society surely has grown even richer since the country emerged from the Great Recession (leading to indisputably greater inequality), the majority of the human race has also grown richer. ● Between 1979-2014, the percentage of poor Americans dropped from 24% to 20%. The percentage of people in the lower middle class dropped from 24% to 17%. And the middle class shrank from 32% of the population to 30%. Perhaps most remarkably, the upper class (annual income of $100,000 to $350,000) grew from 13% to 30%. “The world has become less equal,” says Pinker, “but in more ways the world’s people have become better off.” ● The overall rate of species extinction has been reduced by 75%. No longer on the endangered animals list include condors, tigers, manatees and pandas. And thanks to the cooperation of 197 countries, and their shared ban on fluorocarbons, the ozone layer is expected to heal by the middle of the 21st Century. ● The Pew Research Center has probed American opinions for decades, and now reports that there’s been a “fundamental shift” toward tolerance and respect of rights “with formerly widespread prejudices sinking into oblivion.” ● Americans today spend as much time with relatives, have the same number of friends and see them as often, and report as much emotional support as did their counterparts in the 1970s – the decade of “Happy Days.”
● And the single fact that seemed to most impress Bill Gates: Time spent doing laundry fell from 11.5 hours per week in 1930, to an hour and a half in 2014. If Pinker has but one central thesis, it’s that we’ve managed to take all of these incredible economic and social improvements in stride. Moreover, we’ve deftly found so many new concerns to be upset about that we now live in a perpetual “things never get better” mindset. Not only have we become especially pessimistic as a society, Pinker writes, “none of us is as happy as we ought to be given how amazing our world has become.”
Beating Back The Human Proclivity For Negativity As an outcome of writing his book, Pinker clearly wants to shake us to our senses. He believes humans have adopted a wildly cynical view of life, and even worries that we’ve come to enjoy marinating in negativity: “Experiments have shown that a critic who pans a book is perceived to be more competent than a critic who praises it, and the same may be true of all critics in society.” Just in the last few weeks, a study performed at MIT elevates Pinker’s concerns: Researcher Soroush Vosoughi and his colleagues examined every tweet sent from 2006-2017, and used fact-checkers to label each one as either true or false. What they discovered is that false information was retweeted by more people than true facts, and true stories took six times longer to reach 1,500 people. In assessing the outcome, Vosoughi suggests untrue stories tend to inspire emotions like fear, anger and surprise whereas genuine ones elicit feelings of joy and trust. The implication is we clearly prefer sharing stories that stir strong negative reactions over ones that uplift and inspire. Conclusion In Pinker’s view, we couldn’t be living in a better time in history even if the day-today news appears bleak. So, he urges us to put our trust “in the trend lines and not the headlines.” To be enlightened today, therefore, we must focus on abundance and not lack. We must look for all the possibilities rather than all the limitations. And we must no longer allow the thorns of life to deprive us from seeing the underlying beauty in every rose. To be an optimist today is to be a realist.
ceo-mag.com / Spring/Summer 2018
ceo-mag.com / Winter 2018
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2018 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.
3.8% 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-Chico California State University-Long Beach California State University-Northridge California State University-East Bay California State University-San Bernardino College of William and Mary: Mason Colorado Technical University Drexel University: LeBow Florida International University Fordham University Georgia Institute of Technology: Scheller Georgia State University: Robinson Gonzaga University HEC Montréal Hofstra University: Zarb Hult Internatonal Business School Jacksonville University Kennesaw State University Kent State University Loyola Marymount University Loyola University Chicago: Quinlan Marquette University Mercer University-Atlanta: Niagara University Northern Illinois University Oakland University Pepperdine University: Graziadio Queens University of Charlotte Rensselaer Polytechnic Institute: Lally Rochester Institute of Technology: Saunders Saint Joseph's University: Haub 12
20 %
25 %
30 %
35 %
**Online MBA Weighting: Delivery mode and class size are removed.
TIER ONE
Saint Mary's College of California Seattle University: Albers Suffolk University Temple University: Fox Texas A&M University-College Station: Mays Texas Christian University: Neeley University of Akron University of Alberta University of Baltimore University of California at Davis University of California-San Diego: Rady University of Cincinnati: Lindner University of Connecticut University of Delaware: Lerner University of Louisiana-Lafayette: Moody University of Massachusetts-Boston University of Massachusetts-Lowell University of Michigan-Flint 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 South Florida: Muma University of Tampa: Sykes University of Texas at Arlington University of Texas-Dallas : Jindal University of the Sciences University of Vermont: Grossman University of Washington: Foster University of West Georgia University of Wisconsin-Milwaukee: Lubar Virginia Tech: Pamplin Willamette University: Atkinson Xavier University
*Some data unavailable
ceo-mag.com / Spring/Summer 2018
TIER TWO Bowling Green State University Cleveland State University: Monte Ahuja Millsaps College Northwest Missouri State University
Purdue University-West Lafayette: Krannert* University of Hawaii-Manoa: Shidler University of Kentucky: Gatton University of Nebraska -Lincoln
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 Darmstadt University of Applied Sciences Germany Durham University Business School UK EBS Business School Germany École des Ponts Business School France EDHEC Business School France, Singapore and the UK EU Business School Germany, Spain and Switzerland GSBS Global Business School Spain IE Business School Spain
TIER ONE
Country
ISEG Portugal Leeds University Business School UK Maastricht School of Management The Netherlands MIP Politecnico di Milano Italy Nebrija Business School Spain SBS Swiss Business School Switzerland Toulouse Business School France Toulouse Business School (with IIMB) India Trinity College Dublin School of Business Republic of Ireland Belgium, Italy United International Japan, the Netherlands, Business Schools Spain and Switzerland University of Exeter UK University of Liverpool Management School UK University of Sheffield Management School UK
MBA RANKINGS-THE REST OF THE WORLD
TIER ONE
Country
Country
Central Queensland University Griffith University IAE Business School INCAE Business School La Trobe University Lagos Business School RMIT University The Instituto Tecnológico Autónomo de México (ITAM) The University of Adelaide University Adolfo Ibáñez
University of Chile University of Otago Business School University of South Australia University of Southern Queensland University of Waikato, Waikato Management School University of Wollongong Sydney Business School Victoria Graduate School of Business Western Sydney University
ceo-mag.com / Spring/Summer 2018
Australia Australia Argentina Costa Rica Australia Nigeria Australia Mexico Australia Chile
*Some data unavailable
Chile New Zealand Australia Australia New Zealand Australia Australia Australia
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GLOBAL EXECUTIVE MBA RANKINGS Rank 1 University of Ottawa: Telfer 2 Global OneMBA
(Fundação Getulio Vargas (FGV-EAESP); Rotterdam School of Management, Erasmus University (RSM); Tecnológico de Monterrey (EGADE); University of North Carolina at Chapel Hill (UNC); and Xiamen University, School of Management (SMXMU))
3 SBS Swiss Business School 4 EDHEC Business School
Country Canada
Brazil, China, Mexico, the Netherlands and North America Switzerland France, Singapore and the UK
5 The Instituto Tecnológico Autónomo
de México (ITAM) 6 Temple University: Fox 7 Kennesaw State University 8 EU Business School
Mexico North America North America Germany, Spain and Switzerland
=9 École des Ponts Business School
Global Executive MBA
France
=9 Purdue University-West Lafayette:
North America UK North America North America North America Spain North America The Netherlands
Krannert Leeds University Business School Rutgers Business School Georgia State University: Robinson Loyola Marymount University IE Business School Hult Internatonal Business School Maastricht School of Management Purdue University-West Lafayette: Krannert (IMM)
(Fundação Getulio Vargas (FGV), MIP Politecnico di Milano, Tianjin University and Tilburg University)
Brazil, China, Italy, the Netherlands and North America
10 11 12 12 14 =15 =15 16
17 University Adolfo Ibáñez (AMBA)
Chile France 19 Texas Christian University: Neeley North America 20 IfM Institut für Management Austria 21 INCAE Business School Costa Rica 22 AIX Marseille Graduate School of Management France 23 University of California-San Diego: Rady North America 24 Stockholm School of Economics Sweden 25 Maastricht University The Netherlands 26 Northern Illinois University North America 27 Kent State University North America 28 Trinity College Dublin School of Business Republic of Ireland 29 Pepperdine University: Graziadio North America 30 University of Wollongong Sydney Business School Australia 31 University of Wisconsin-Milwaukee: Lubar North America 32 Florida International University North America 33 RMIT University Australia 18 Audencia Business school
TIER ONE
Rank 34 35 36 =37
University of Oregon: Lundquist University of Kentucky: Gatton Virginia Commonwealth University Saint Mary's College of California (Global EMBA) =37 Saint Mary's College of California 38 Bradford University School of Management 39 EBS Business School (with Durham) 40 University of Chile 41 Aston Business School 42 University of Oklahoma: Price 43 University of Tampa: Sykes 44 Jacksonville University 45 Mercer University-Atlanta: Stetson 46 IAE Business School 47 Rochester Institute of Technology: Saunders 48 Bradford University School of Management 49 Villanova University 50 Boston University: Questrom 51 University of Texas-Dallas: Jindal 52 University of Texas at Arlington 53 Fordham University 54 Oakland University 55 University of Nebraska-Omaha 56 University of Sheffield Management School 57 University of Exeter 58 Pontifical Catholic University of Chile 59 Virginia Tech: Pamplin 60 University of Washington: Foster 61 University of Pittsburgh: Katz 62 Texas A&M University-College Station: Mays 63 University Adolfo Ibáñez 64 University of South Florida: Muma 65 Auburn University: Harbert 66 Georgia Institute of Technology: Scheller 67 MIP Politecnico di Milano 68 University of Alberta 69 Loyola University Chicago: Quinlan 70 Lagos Business School 71 University of Hawaii-Manoa: Shidler 72 Saint Joseph's University: Haub 73 California State University-Long Beach 74 Solvay Brussels School of Economics and Management 75 Seattle University: Albers 76 College of William and Mary: Mason 77 Niagara University =78 Millsaps College =78 Xavier Univesity 79 University of Connecticut 80 Suffolk University 81 California State University-East Bay 82 Western Sydney University 83 University Adolfo Ibáñez 84 Marquette University 85 University of New Mexico: Anderson
Country
North America North America North America
North America North America Dubai Germany Chile UK North America North America North America North America Argentina North America UK North America North America North America North America North America North America North America UK UK Chile North America North America North America North America Chile North America North America North America Italy Canada North America Nigeria North America North America North America Belgium North America North America North America North America North America North America North America North America Australia Peru North America North America
TIER TWO Rank Country 86 Birmingham Business School UK 87 Drexel University: LeBow* North America 88 Bowling Green State University North America
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Rank Country 89 Cleveland State University:
Monte Ahuja
90 University of North Alabama 91 Hofstra University: Zarb
*Some data unavailable
North America North America North America
ceo-mag.com / Spring/Summer 2018
GLOBAL ONLINE MBA RANKINGS Rank Country 1 EU Business School
Germany, Spain and Switzerland 2 SBS Swiss Business School Switzerland 3 University of Otago Business School New Zealand 4 Maastricht School of Management The Netherlands 5 IE Business School Spain 6 United International Belgium, Italy Japan, Business Schools the Netherlands, Spain and Switzerland 7 INCAE Business School Costa Rica 8 Nebrija Business School Spain 9 University of South Australia Australia 10 Temple University: Fox North America =11 University of Southern Queensland Australia =11 GSBS Global Business School Spain =12 Bradford University Business School UK =12 The Open University UK =13 The EuroMBA (Aix-Marseille, Audencia Nantes, EADA, HHL Leipzig, Kozminski University and Maastrict University) =13 La Trobe University 14 Washington State University: Carson 15 University of Massachusetts-Boston 16 Griffith University 17 MIP Politecnico di Milano 18 Pepperdine University: Graziadio 19 RMIT University EMBA
France, Germany, the Netherlands, Poland and Spain Australia North America North America Australia Italy North America Australia
TIER ONE
Rank Country 20 Jack Welch Management Institute 21 Suffolk University 22 Durham University Business School 23 Colorado Technical University 24 Mercer University-Atlanta: Stetson 25 University of Cincinnati: Lindner 26 University of Massachusetts-Lowell 27 Rochester Institute of Technology:
Saunders
28 RMIT University 29 Birmingham Business School
North America North America UK North America North America North America North America North America Australia UK
30 Washington State University:
31
Carson EMBA Georgia WebMBA
(Columbus State University, Georgia College, Georgia Southern University, Kennesaw State University, University of West Georgia, Valdosta State University)
North America
North America UK North America North America North America North America UK North America North America North America
32 University of Liverpool Management School 33 Queens University of Charlotte 34 University of Delaware: Lerner 35 University of Baltimore 36 Niagara University 37 Aston Business School* 38 Saint Joseph's University: Haub EMBA 39 University of the Sciences 40 University of South Florida: Muma
TIER TWO Rank Country 41 California State University
San Bernardino 42 Saint Joseph's University: Haub 43 Cleveland State University: Monte Ahuja 44 American University: Kogod 45 University of Texas-Dallas: Jindal 46 College of William and Mary: Mason 47 University of North Alabama EMBA 48 University of Washington: Foster*
North America North America North America North America North America North America North America 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 Harvard Business School
ceo-mag.com / Spring/Summer 2018
Rank Country 49 Florida International University 50 Drexel University: LeBow* 51 University of Hawaii-Manoa: Shidler 52 Virginia Commonwealth University 53 Central Queensland University 54 University of North Alabama 55 Hofstra University: Zarb* 56 Auburn University: Harbert 57 Northwest Missouri State University
North America North America North America North America Australia 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.
IE Business School Jacksonville University 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 University of Missouri-St. Louis Washington University in St. Louis: Olin
*Some data unavailable
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CREATING CHANGE MAKERS
A L E X A N D R A S K I N N E R TA L K S T O DAVID JONES AND STUART HART
Q. What prompted the redesign of your MBA offering? Our former MBA programme was nondistinctive and had grown stale after several years of declining enrolments – it was time for change. In 2012, Dean Sanjay Sharma convened a committee to analyse the competitive landscape, conduct an internal review of the School’s capacity and core competencies, interview business leaders to understand the needs of employers, and design a completely revamped MBA programme that would be celebrated as a source of innovation and disruption to MBA education, and serve as a vehicle for impact. In August of 2014, we proudly launched our award-winning one-year MBA programme and we’ll graduate our fourth class in August of this year.
VERMONT’S MISSION: To prepare and train individuals to create profitable and sustainable business opportunities in a world undergoing transformational change. The Sustainable Innovation MBA aims to develop the next generation of leaders who will build, disrupt, innovate, and reinvent sustainable business and enterprises in a world that demands it. 16
Q. How would you describe the new programme, if you were giving a thumbnail description? The Sustainable Innovation MBA offers an AACSB accredited 12-month degree designed from the ground-up for people that understand that new times demand a new approach. Sustainable business strategies and innovation are core to every course we teach and everything we do, and based on our inaugural year we were honoured to receive the 2015 Dr. Alfred N. & Lynn Manos Page Prize for Sustainability Issues in Business Curricula. This has been backed up by our No. 1 ranking in the Princeton Review's list of Green MBAs, our Top 10 Better World MBA ranking, courtesy of Corporate Knights, and CEO Magazine's Tier One accolade. Our new MBA programme couldn’t be further from the ‘plain vanilla’ part-time MBA programme that preceded it, which is probably why enrolment has doubled in the last four years. ceo-mag.com / Spring/Summer 2018
Kindly expand upon your corporate partnerships and the impact they have on the curriculum. We’ve built a community of engaged partners who support our programme in numerous ways, including our diverse multidisciplinary faculty, local business leaders who engage with students in multiple ways (e.g., panel sessions, networking events), world-class entrepreneurs and business leaders who deliver skill building workshops and serve as monthly Innovators in Residence, and the members of our Advisory Board. We also work with over 100 partners who have joined our SI-MBA Changemaker Network to help launch our graduates into fulfilling and impactful careers. Q. How much emphasis do you place upon experiential learning? Experience-based learning is a central component to our curriculum and training model. Most courses include projectbased work, some of which is organised in conjunction with site visits and interactions with company executives and employees. The capstone experiential learning experience of our programme is a forcredit Practicum Project completed in the summer. Practicum Projects are the centrepiece of our programme, constituting nine credits toward students’ degrees. The projects provide hands-on experience in sustainable innovation and problem solving and are designed for mutual value, creating benefits for the sponsoring organisation and important problem-solving learning experiences for the students. Current and past projects have occurred locally in Vermont and around the globe with worldclass organisations like PepsiCo, Novelis, Facebook, Cemex, Philips, Ingersoll Rand, Griffith Foods, Seventh Generation, Ben & Jerry’s, Burton Snowboards, Keurig Green Mountain, Native Energy, Care Enterprises and 1% for the Planet. Practicum projects are typically completed by teams of up to four students. The deliverable for the practicum is a detailed and comprehensive business/action plan for the host organisations. In early August, students pitch their business/action plans to a panel of Executives, Chief Sustainability Officers, Entrepreneurs and Financiers, along with representatives of the host organisations. Q. Your Sustainable Innovation MBA is far from vanilla, which suggests your students are cut from a different cloth. With this in mind, what do you look for in an applicant? The Sustainable Innovation MBA is anything but business-as-usual, and so too are the kinds of students we seek—people ceo-mag.com / Spring/Summer 2018
who are not content to conduct business as usual. We’re talking about people who think differently and know that there is a better way to do business. People who understand that new times demand new approaches: the disrupters, innovators, and visionary entrepreneurs. People who are passionate about harnessing the power of for-profit business to create and scale value for society and investors alike. People who realise the future of business is in addressing world challenges, leading through purpose, and solving social and environmental problems— while making money doing it. We seek students who are ready to embark on a different kind of business education that will prepare them to lead differently, profit differently, and live differently. We tend to attract and admit students who bring a diversity of educational backgrounds, work histories, and life experiences that contribute to a rich, collaborative learning environment. Common to all students we admit is a passion for creating positive impact.
“To reinvent business education – and reinvent business – we must successfully launch our students into fulfilling and impactful careers.”
Q. How much emphasis do you place upon entrepreneurship? We place a lot of emphasis on entrepreneurship, both in the traditional start-up sense and intrapreneurship within established companies. In 2016 we were honored to be selected as an Outstanding Specialty Program by the Global Consortium of Entrepreneurship Centers. As we state on our website and elsewhere, our programme focuses on “Transforming Today’s Business, Creating Tomorrow’s Ventures.” Our curriculum includes courses in creating new ventures and business models, early stage financing approaches tailored to sustainable business models, and leading with an entrepreneurial mindset and creating a culture to support innovation. Each year some of our students can and do pursue their own ventures for their summer practicum projects. Q. As the name of your programme suggests, significant weight is given to the business of sustainability and innovation. How do you balance this with the core/traditional elements (finance, accounting etc.) of an MBA education? Traditional MBA programmes have long included content that may have served an important purpose in the past but has become less relevant in the contexts of today. Because The Sustainable Innovation MBA was effectively designed from a clean sheet, we were able to reduce or eliminate non-essential “legacy” content found in traditional MBA curricula. For example, 17
we eliminated detailed content relating to factory optimisation, queuing theory and large-scale administrative practices, while maintaining coverage of the core knowledge, skills, and capabilities that any MBA graduate must possess. We then designed an innovative curricular format to deliver the core MBA toolkit through more than 25 one-and two-credit courses, each infused with sustainable business and innovation content. We also deliver “traditional” MBA content through self-paced on-line courses that students complete before they start their in-person classes in late August. This approach brings all of our incoming students up to speed on basic concepts in accounting, finance, and economics, regardless of their prior education and business experience. What makes The Sustainable Innovation MBA truly unique is the integration of innovation and sustainability content throughout the entire programme—not in just a few elective courses. Our curriculum combines core MBA training with a substantial amount of additional material to provide students with the framework, skills, and tools they need to create sustainable value for owners, investors and society through innovative for-profit business models that can address 21st century challenges. This commitment to sustainability has been recognised #1 Green MBA in the US as per Princeton Review. Traditional MBA programmes offer precious little coverage of the skills needed to succeed in this new business frontier, such as an understanding of world challenges, systems thinking and tools, natural capital, clean technology, life cycle thinking, innovation through collaboration, leading for transformational change, base of the pyramid business models, and co-creation skills, to name but a few.
The Sustainable Innovation MBA
Removal of Legacy MBA Content
n We eliminate legacy content of the past, and focus on tools for present and future. n Instead of preparing managers for functional execution and administration, we develop visionary.
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Kindly expand upon the Changemaker Network and the benefits it offers. To reinvent business education – and reinvent business – we must successfully launch our students into fulfilling and impactful careers. To this end, we formed The SI-MBA Changemaker Network: an active, committed “ecosystem” of companies, organisations and individuals who share a belief that business has a new mission, both globally and locally. The Changemaker Network comprises a rich, dense network of over 100 partners from the spheres of sustainable business, clean technology, corporate social responsibility, base of the pyramid enterprise, and those seeking to reinvent business. The mission of the Changemaker Network is to provide a strong support system committed to launching our graduates into opportunities and careers within network companies, ventures, and other organisations. This support system is vital to a programme like ours, and to talent-hungry organisations seeking to leverage the power of markets and private enterprise to change the world through profitable ventures. Q. Some of your students will have a very clear plan in place for their post-MBA career journey. However, what support do you offer to ‘career change’ professionals that are in the process of pivoting? Most of our students are coming to the programme because they are looking to “shift gears” and embark on a new career direction more consistent with their passion and personal values. As a result, all of our students receive individualised career support. Our Career Launch programme, which we’ll talk more about, includes individualised career counselling, career management and skill building workshops (e.g., informational interviewing), networking events, and careers panels. However, mainstream MBA programmes across the country are only just learning
Core MBA Toolkit
n Accounting n Finance n Economics n Statistics n Marketing n Operations n Management n Strategy
The SI-MBA Difference
n We integrate sustainability and innovation in everything we do, and students learn from top leaders in sustainable business. n Graduates gain project-based experience via practicums hosted by world-class companies and ventures..
ceo-mag.com / Spring/Summer 2018
private equity with a sustainability focus) how to accommodate this new breed of MBA student, which obviously poses a challenge ● Consulting focused on sustainability, for career specialists in ‘placing’ so-called development and corporate transformation impact students. How can any single career ● “4th sector” -- non-profits focused on counsellor possibly know about employment leveraging the private sector to achieve opportunities in renewable energy, clean tech, sustainable innovation and development. affordable health care, inclusive business, Our Launch system has been designed to intrapreneurship within larger companies, enable our students to identify their preferred and other innovative ventures, to name a few? pathway and zero in on the opportunities they Compounding this challenge is that many would like to pursue, post-graduation. The of the job opportunities in these spaces are Launch system is composed of four phases. unadvertised and network-based. The initial Discovery phase begins during For us, however, impact students aren’t Orientation Week, where students draft a a subset of the people train—they are the professional vision and complete validated only people we train. In fall 2016, we realised career assessment tools. During the first that we had the opportunity to develop a module, students participate in two onecustomised system supported by a robust on-one sessions with an experienced career network of partners that could become a counsellor. One of the main objectives of model of career support for impact this initial phase is for students students everywhere. to identify the career pathway(s) To create and enable a newly they wish to pursue from the six developed Launch system, we outlined. secured a $145,000 gift from In the Focus phase, students Vermont Works, which is an receive mentoring from career independent investment firm coaches and professionals within “We seek supporting Vermont’s job and each identified pathway. They economic development. students who are also attend career management We implemented a four-phase workshops and complete ready to embark Launch system for the first time associated assignments (e.g., during the 2017-‘18 year, and we’re improving their resume and on a different rolling out Launch 2.0 in 2018-‘19. conducting an informational interview). Networking events kind of business supported by members of our Q. Why is the practicum project so education that Changemaker Network are also important for your students? organised, and students begin to As discussed, the Practicum is will prepare hone the potential employment the Capstone experience for the them to lead opportunities in which they are programme. It is the integrative interested. mechanism to coalesce and apply differently, profit most The Customise phase has all the learnings from the previous students working with employment nine months. differently, and experts to tailor their job pitches The Practicum Projects are live differently.” and personal brand, and to further designed to be meaningful, highnarrow the potential organisations impact work with local, national, and employers they wish to focus and global partners. on. Students begin interviewing in Students interested in pursuing an the Launch phase, and funds are entrepreneurial venture may elect allocated to support travel needs to launch their own business idea in for their employment search. lieu of a company-based project. While unveiling the full Launch system for the first time during the 2017-‘18 year, Q. Post-MBA, what roles do your graduates we began experimenting with some of its typically occupy? elements at the end of the 2015-‘16 year, and We believe our Sustainable Innovation even more so during the 2016-‘17 year. Our MBA Programme is especially effective at current cohort of students is well along the preparing students to pursue opportunities in Launch process and many of our graduates six key pathways: have also benefitted from elements of the ● Purpose-driven companies Launch system. ● Large, multinational corporations with a focus on sustainability or corporate innovation/transformation ● Joining or launching a start-up or other venture in the clean tech or inclusive business space ● Impact investing (venture capital or ceo-mag.com / Spring/Summer 2018
BIOGRAPHIES
David Jones is the Director of the Sustainable Innovation MBA at the University of Vermont.
Stuart Hart is the Director of Practicums and External Relations for the Sustainable Innovation MBA at the University of Vermont.
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CROSSING $1 TRILLION: WHAT’S NEXT FOR APPLE
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onsumer electronics giant Apple is finding itself in a whole new race after last Thursday, when its share price rose to $207, making it the first U.S. company to cross $1 trillion in market capitalization. As Apple and its CEO, Tim Cook, set their sights on the future, experts from Wharton and elsewhere point out that the company does face some challenges: Apple’s smartphone sales have slowed (although margins have gone up); it has no big-bang product around the corner, notably in augmented reality or artificial intelligence (AI); its R&D investments are lagging; and its next big leap may take place under a different CEO. Meanwhile, other tech giants such as Amazon, Google’s parent Alphabet and Microsoft are close runners-up in the trilliondollar race, heralding a new era of large, cashrich companies. Platforms and ecosystems are critical to success in the next round, and some predict that Amazon looks poised to become the first $2 trillion company, especially with its ability to seemingly enter any industry it chooses to.
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Credit Where It’s Due At least the first $500 billion of Apple’s market cap should be credited to the firm’s previous CEO, the late Steve Jobs, according to John Sculley, who was CEO of Apple from 1983 to 1993. During a recent interview with the Knowledge@Wharton show on SiriusXM, Sculley recalled his first meeting with Jobs at Apple in 1982: “[He] was thinking about something that nobody else in the high tech world thought was even important — he wanted to build a personal computer, because he thought the future of computing was going to be for non-technical people to be able to have something easy to use [to] do all kinds of amazing, creative things…. Those foundational principles that Steve created way back in the early 1980s are still the foundational principles that Apple sits on today.” He then gave Cook “a lot of credit for the next $500 billion,” and explained why: “He came up with a strategy for loyalty with shareholders that is incredibly powerful, just like Steve came up with a strategy for loyalty with consumers.” That said, “Apple doesn’t have a next act that we’re aware of after the iPhone,” said Sculley. “Steve Jobs had the brilliance to realize that you could do photography in an entirely different way with a handheld device, and that you could send photos to another device. And that led to all the things we [have today]. The question is, what comes next?” According to Sculley, Cook is probably right when he said in an earnings call last year that augmented reality will be the next big area of action in consumer technology. He noted that from the standpoint of shareholder value, Apple may not need a blockbuster product anytime soon, “but it is going to need
“Jeff Bezos is the most competent CEO in the world right now, and it doesn’t look like he has any intentions of slowing down.” John Sculley
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“If we believe that design is not going to be enough, and deep tech is going to be a differentiator … Apple should speed up its investment in R&D.” “The big question is: What’s the next category of products — Home? Car? Augmented reality? Apple is trying to play in all of these, but we have not seen a game-changing product yet….” Gad Allon
it in maybe five or seven years” — when AI, augmented reality and “other foundational things that will probably be part of what comes next after iPhone will happen...” At present, Apple lacks “a significant depth or innovation in the areas that are going to be significant in the future,” noted Wharton professor of operations, information and decisions Gad Allon. Apple is lagging in AI and AI-based products such as Siri, and sales of its HomePod speakers are slow, he added. “If we believe home and TV are the next battle, Apple has not figured out these, and if we believe mobility — or car as a platform — is the next battle, Apple is losing there as well.” Apple has been lagging in its R&D investments as a percentage of revenues, behind its competitors including Amazon, Google and Samsung, said Allon, who is also director of the Jerome Fisher Program in Management & Technology at the University of Pennsylvania. This is notwithstanding the fact that Apple has increased its R&D investments significantly over the last few years, he added. “If we believe that design is not going to be enough, and deep tech is going to be a differentiator in some of these key areas, Apple should speed up its investment in R&D.” Erik Gordon, a professor at the University of Michigan’s Ross School of Business who joined Sculley on the Knowledge@Wharton radio show, agreed that augmented reality will be the arena for the future of consumer technology. “It’s going to be fabulous, and it’s going to be very cool, but I don’t think it’s in Apple’s next product cycle,” he said. “But keep in mind that Apple has good technology capabilities and they have more cash probably than the U.S. government to invest. They can keep shareholders happy over the next four or five years – they can just keep them happy with stock buybacks; they have so much cash.” A Wartime CEO Gordon said that he sees Apple as a contender in the markets where AI and augmented reality will reign. “Apple will be a player in the next round,” he predicted. “But it might be a new CEO because it’s not Tim Cook’s strong point.” Tim Cook is a “peacetime CEO,” according to Allon. “He got the firm in very good shape with a deep, innovative product line, and his main role has been executing the plan. He has a great user base that is absolutely addicted to Apple’s products. Tim Cook has done pretty much what he needed to do to deliver on this.” That said, Apple’s next CEO “will have to be a wartime CEO — one that is getting a few depleted cash cows with the need to recreate the next innovation.”
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The task for Apple’s next CEO would be significant, Sculley said. “I wouldn’t want to be the next CEO coming in after Tim Cook, because the next CEO is probably going to have a very challenging strategic set of issues over the next four, five, six or seven years — eventually this model will be a challenge because there [will need to be] innovation.” If Apple fails to seize the moment and gain leadership in augmented reality or another new technology, some other company will, Sculley said. “As AI and machine learning become more and more integrated into everything, [the next leader] will be [a company] like Google, which has clearly invested incredible amounts [into] R&D and great talent. Will they be able to productize it better than Apple? The next CEO who follows Tim Cook is going to have to focus on those kinds of issues.” Amazon Closing In Gordon pointed out that Amazon has performed better than Apple on the stock markets. “Amazon actually in some ways has a better market cap growth story; its market cap now is somewhere around $890 billion, which is about 90% of Apple’s,” he said. Seven years ago, Amazon’s market capitalization was only a third the size of Apple’s market cap. The pace at which that has grown clearly makes it “the rocket ship” in market cap growth, he added. Other large technology companies are close, such as Alphabet with a market cap of nearly $870 billion, and Microsoft with $830 billion, he noted. “So we have a group of really large new-generation companies.” Gordon did not see any natural limit to how large those companies could become. “They have their fate in their hands,” he said. “As long as they creatively reach out and do new things, I don’t know why [$1 trillion] would be a ceiling. For example, Amazon, which seems to be willing to try almost anything — how to put a cap on them?” Amazon is Sculley’s pick for the next big winner. “Apple may be the first $1 trillion company, [but] Amazon probably is a more likely candidate to be the first $2 trillion company,” he said. “I would agree with [Gordon] that Amazon has been able to invent line of business after line of business after the line of business. I think Jeff Bezos is the most competent CEO in the world right now, and it doesn’t look like he has any intentions of slowing down.” Apple’s Strengths Apple put up a strong show in its latest fiscal 2018 third-quarter earnings report last week, posting a 40% growth in earnings per share and a 17% growth in revenues, year-over-year. Gordon parsed those to ceo-mag.com / Spring/Summer 2018
highlight some trends that underscore Cook’s contributions. For example, he noted that revenues have grown smartly although smartphone sales growth was almost flat in the third quarter. “Their success has been getting people to buy more expensive phones, so the average selling price has gone up,” he said. He noted that the ability to sell $1,000 phones may have seemed far-fetched five years ago. Apple has also been vastly more profitable than others in its industry, Sculley said. “Apple only has 15% of the physical smartphone market, but it’s got about 95% of the profits in the smartphone ecosystem,” he said. “Apple is leveraging its ecosystem — a consumer experience so good between the different devices — and leveraging that service revenue.” At the same time, smartphone users have slowed down their pace of upgrading their devices, said Sculley. “We haven’t seen the replacement cycle [being] as rapid as it’s been in the past.” According to Sculley, Cook has done “a very good job” building shareholder loyalty. “He does it because he has 10 times as much cash ($285 billion as of December 2017) as Amazon does. He’s buying back stock — about $100 billion this year. They give a big dividend. They don’t try to be the innovator of what’s coming next and take risks. They trail innovation by a couple of years. So the iPhones don’t necessarily have the latest new technology, but they do a really good job when they deploy it and they do it at scale.” Apple has also in recent quarters increased its emphasis on services, said Gordon. Although services form a small part of its revenues and profit, they tend to have high profit margins, he noted. In recent earnings calls, the company has encouraged equity analysts to focus also on that part of its business. He pointed to one survey, which showed that 38% of a sample of 1,000 iPhone users had additional iCloud storage; about 18% stream Apple Music — about the same number of iPhone users that stream Spotify — and about 23% buy AppleCare protection plans for their devices. However, Gordon did not expect the services push to compensate for the next blockbuster product. “They will need something else to regenerate growth after they’ve bought back all the stock they want to buy back,” he said. Allon is convinced that “Apple has been, and will be, a product firm.” He said the services are used to help and sell more products, and gain a bigger share of the wallet from existing customers. “But Apple makes money by selling better products than any other firm,” he said. According to Allon, Apple’s “only truly innovative product” in recent years was the ceo-mag.com / Spring/Summer 2018
Apple Watch; the HomePod was “too late to the market,” and although the iPhone is doing well, that is not where growth will come from. “The big question is: What’s the next category of products — Home? Car? Augmented reality? Apple is trying to play in all of these, but we have not seen a game-changing product yet there from Apple, and it is definitely losing ground.” Platforms over Products Platforms will be more important than products for the next tech leader, according to Sculley. “[It’s] being driven by all kinds of new innovations — in drones, in precision medicine and robotics. All of these are opening up huge opportunities to completely re-imagine what industries will be like. The most fundamental to all of them are the business architectural platforms. Apple obviously has an important platform, but so do a lot of other companies.” With more and more innovation occurring in the platform space, he saw “the opportunity for more Apples, more Amazons, more Microsofts over the next decade.” Scanning the future for the smartphone market, Sculley said he expected the industry to become more and more commoditized. Chinese companies are likely to have an edge in that scenario, because of the speed at which they are able to scale production, he added. “We don’t know how to scale a business that fast in the U.S. So there are going to be different ground rules for creating these extraordinary, successful companies in the future that are different than the models that we’ve used in Silicon Valley up until now.”
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.
“[Augmented reality is] going to be fabulous … but I don’t think it’s in Apple’s next product cycle.” Erik Gordon
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THE CHANGING FACE OF WORK DAVID GOODWIN
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he face of work is being transformed by revolutionary global trends. Supply chains are being redesigned, jobs redefined and organisational structures reshaped. These trends demand that businesses evolve their approaches to both recruiting and developing their future leaders. Business schools, too, are being fundamentally reinvented. RMIT University’s Executive MBA and MBA programmes are designed to be highly practical, with an emphasis on real-world problem solving. With campuses in major business hubs such as Melbourne and Ho Chi Minh City and a research centre in Barcelona, RMIT continues to collaborate with executives across multiple industries who are facing disruptive workforce changes. Here’s what those executives are telling us. Big changes ahead Traditional MBAs must continue to adapt to respond to the turbulence now being experienced by business. MBA programmes must also remain connected to what is immediately relevant to business practitioners. Take digital disruption. Amongst the main forces predicted to change how organisations operate are automation, big data and analytics. Industry 4.0, Artificial Intelligence (AI), machine learning, robotics, blockchain… the list goes on. A study undertaken by Boston Consulting Group in 2017 described numerous ways the explosion in device connectivity, data volumes and computing speed, combined with advances in automated systems and artificial intelligence will enable robotic devices to perform many tasks more efficiently than humans. In fact, it is predicted that a significant portion of today’s jobs will simply not exist in 15 years’ time. Modelling undertaken for the Committee for Economic Development of Australia in 2015 indicated that 40% of the Australian workforce could be replaced by computers in the next 10 to 15 years. This shift brings with it a raft of implications concerning cybersecurity, data protection and privacy perspectives, to name just a few. Responding to these growing and evolving challenges will shape the future agendas of business schools. The alarming issue (for many) is that rather than unfolding in a linear manner, disruption is occurring exponentially. This means that digital capability, particularly the ability to develop insights based on complex data analysis, is more important than ever before. Employers now expect MBA graduates to arrive equipped with
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BIOGRAPHY
Dr David Goodwin has been RMIT's MBA Director since March 2016. With a background in law, he teaches Corporate Governance and Business Consulting. He has diverse research interests across the fields of business ethics, organisational governance, alternative dispute resolution, economic torts and maritime law. In 2017 David coached the team of RMIT Executive MBA students which took out first place in the prestigious International Graduate Competition hosted by the Canadian university HEC Montreal, competing against top international business schools. 26
developing nations of the Pacific Rim. Over this capability. The use of automated the past 18 months, more than 400 students systems is increasing the complexity have been researching and solving challenges of tasks that managers are required to related to this theme - enabling them to gain undertake. Accordingly, there is strong true insight into the digital revolution and its and growing demand for data science impact on organisations and careers. experts who have also cultivated broader A third response is continually rebusiness understanding. The companies that engineering courses to ensure greater dominate the next decade will likely be led by emphasis on the technical skills needed for executives who have a deep understanding of success in the digital age. This includes coding how to apply technology. and data analytics, as well as the foundation The new digital landscape is also seeing skills of problem-solving and cognition the value and focus of management’s (including mathematical reasoning). Core contribution shifting to areas that are more requirements for many future jobs will be difficult to automate. Expertise in creating the ability to work with voluminous data greater organisational efficiency is a highlyand confidently make data-based valued credential. Relationship decisions. management experts with the ability Finally, it is important to to identify and work with partner address development of students’ organisations to build ‘ecosystems interpersonal skills including of capability’ are also growing in “Continuous empathy, communication demand. effectiveness (active listening, Continuous disruption requires disruption and written, oral and non-verbal managers to routinely problemrequires communications); collaboration; solve in entirely new situations. service orientation; cultural Thus, a high degree of comfort with managers sensitivity; conflict resolution and ambiguity is needed, along with very to routinely relationship-building. At RMIT we sophisticated change management see this as interlinked with mastery skills. Resilience, the capacity to problem-solve of design thinking principles focused work under relentless pressure, around human-centred design. and an appetite for constant change in entirely new Traditionally, the development have become essential behavioural situations.” of interpersonal skills has been expectations of corporate leaders. viewed as an adjunct or secondary outcome of an MBA education, A four-pronged response but the message from the business How should business schools community is clear: interpersonal respond? There are four logical effectiveness is a critical differentiator of steps that MBA programmes must implement high performance in the new world of work, to respond to these trends. and the most highly valued candidates for The first is to deepen and strengthen employment are those that demonstrate industry partnerships. The new dynamics superior ‘soft’ skills. that have been unleashed mean that the Some argue that the behavioural qualities formation of relationships with organisations required of future business leaders can only at the cutting edge of digital disruption is be fully developed in the cut and thrust of more important than ever before. This is the day to day business life. This is undoubtedly only way to shorten the distance between true. That's why we also work hard to ensure the currency of practitioner experience our graduates understand and respect the and awareness of the latest trends amongst fact there's no substitute for real world student cohorts. business experience. But these qualities can Our industry partners continue to tell also be incubated and tested within business us that an MBA education cannot simply be schools. MBA programmes enable the fastfocused on a top-down transfer of knowledge. tracking of capability development. While we Instead, it needs to be dynamic, flexible, can’t entirely replicate the complexities that industry-connected and practical. managers’ face, we can simulate them. A second vital step is the creation of Preparing graduates for the future world student challenges which are sufficiently of work requires a calibration of real-world complex, multi-faceted and increasingly exposure at the cutting edge, development global, to mirror the real-world of professional of the new suite of technical skills required practice. As an example, at RMIT we’ve for the digital age and renewed emphasis on commenced a multi-year engagement with the interpersonal skills. It’s about developing APEC (Asia Pacific Economic Cooperation) people with a global perspective who are Business Advisory Council to explore the highly adaptive and willing to act quickly complexities and implications of digital despite complexity and uncertainty. innovation for entrepreneurship in the ceo-mag.com / Spring/Summer 2018
Q. Sheffield’s MBA is based upon three core pillars: consultancy, entrepreneurship and leadership. How are these components woven into the curriculum and what are the resulting benefits for students? Although the pillars have been in place for a while, we’ve spent time latterly really thinking about the ambition for those pillars. With regards to consultancy, this is not about training people to be consultants but rather giving them the skill set of a consultant. So, when we think about what that means, it’s really about asking the right questions, and this is a skill that can be used when managing people, working with peers, or customers for that matter. We put this into practice via a marketing and consultancy challenge in the first semester. Essentially, student teams work with an organisation’s staff and customers on a marketing related challenge and then present their findings to a senior management team at the end of the process. Importantly, work in this area is not confined to just one module, students work on realtime projects with businesses throughout the programme. Entrepreneurship is about implementing ideas well, and this really manifests itself in the New Venture Creation Challenge. Working in teams and guided by mentors, students are tasked with developing a business plan for a start-up idea in their second semester. At the end of this period, students are not only expected to have a robust business plan, but to pitch their idea to a panel of investors, much like Dragons’ Den or Shark Tank. The module we offer on leadership really emphasises the importance of providing ‘responsible leadership’ and so significant weight is given to ethics and strategy. This is underpinned by the development of our students’ leadership style, which we
ceo-mag.com / Spring/Summer 2018
THE SHEFFIELD MBA: BEYOND POTENTIAL V I C T O R C A L L E N D E R TA L K S T O I A N P R O C T O R
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“The opportunity to be in such a diverse, multicultural setting is special, and it’s one that you will probably not experience again, so I think the takeaway here is to be open and engaged.”
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achieve through feedback, reflection, and practice, and this is supported by a Leadership Dinner Series which we run throughout the academic year. Senior business leaders will talk openly about themselves as a leader, their successes and failures, and what they’ve learnt from both, which is hugely insightful. This year we’ve welcomed Lord Bernard Hogan-Howe, who happens to be a Sheffield MBA alum, Sue Douthwaite who started Santander’s Business Bank, Tom Bloxham of Urban Splash, and many others. Q. In not subscribing to a ‘one size fits all’ MBA model, your students are actively encouraged to customise the programme, based upon their individual needs. How is this achieved? First, we believe in smaller class sizes, which means we put a cap on student numbers at around 50 people. We really want students to feel like they’re on a personal journey, which is just not possible when you have a
sea of faces looking back at you in a lecture theatre. All of our students have different outcomes in mind, and by maintaining smaller classes we’re able to offer personalised support, tailored to the individual. The other important benefit attached to the cap we put on numbers revolves around shared learning. Students have the ability to contribute to classroom discussions and learn from each other, which is incredibly valuable, especially when you consider the international make-up of our most recent cohort. Kindly walk me through the diversity and experience your students bring to the table. Applicants must have at least three years of work experience, however, over the last two years, students have had an average of 10. That being said, we have students at both ends of the scale – some have three years and others have more than 20. Our students come from a wide range
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of industries spanning consultancy and professional services through to banking and finance, manufacturing, and IT and technology. This diversity is further supported by the international composition of our cohort, which is hugely beneficial to our students, because they have the opportunity to learn about other cultures. Q. How much emphasis do you place upon experiential learning? A significant amount. A good example would be the marketing and consultancy challenge, which I touched upon earlier. At the start of the challenge, six companies discuss a marketing issue they’re facing and student teams are given an hour to come up with a pitch, based upon the issue they’d like to work on. It’s then up to the participating firms to choose the team they’d like to work with. Teams spend the next seven weeks working with their partner firms. The Internationalisation Challenge is another example of our experiential learning approach: Students are tasked with helping an organisation with its international business strategy, whether that be improving exports, exploring new markets, or seeking out joint ventures. Not only does this module provide students with an appreciation of the complexities of international business, it also allows them to present their findings to senior management at the end of the challenge. We also have an individual MBA challenge, which is focused on thinking about the next step in your career. Once students have done that, our job is to pair that ambition with a compatible firm that will offer a project that will help them to move along that path. As an individual project, spanning three or four months, it’s a significant body of work, but one that will certainly enrich the C.V. It’s also possible that the participating organisation may wish to employ the student to implement the work they’ve undertaken for them, which would extend the project further. The quality of one’s faculty is paramount to the success of any programme. Kindly expand upon the make-up of your faculty (full-time and visiting). First, as a Russell Group University, our academics’ time is split between teaching and research, and it’s the research side of the equation that’s particularly interesting, because our faculty are coming up with solutions to real-world problems. The resulting benefit is that our students don’t have to wait for the information to be published in a textbook because they’re hearing it first-hand, and in almost real-time. Our MBA Director, Vasilis Theoharakis, ceo-mag.com / Spring/Summer 2018
typifies the quality of academic that we have at Sheffield. In addition to holding stellar academic credentials, Vasilis has taught at the European School of Management and Technology (ESMT) in Berlin, City University, Cass Business School in London, and the University of California - Berkeley, amongst others. Prior to working in academia, Vasilis spent several years in Silicon Valley in senior level marketing and business development positions with high-tech start-ups and companies such as 3Com. Currently, Vasilis is a member of the management team at the PJ Tech Catalyst fund, a venture capital fund, and an advisory board member at Innoetics, a global innovator in text to speech software, and Aquanetix Ltd., a company that develops cloud-based SaaS applications for the aquaculture industry. Ultimately, our professors are like the conductors of an orchestra. Their job is to get the very best out of our students by drawing out their knowledge and experience, and with skilled educators like Vasilis, this is exactly what they do. Q. An MBA is a significant undertaking, especially when the cultural and geographic landscape may be unfamiliar. To what extent do you cater for international students, and how ‘student friendly’ is Sheffield as an MBA destination? The University embraces international students, and this is probably best illustrated via the campaign we championed a few years ago entitled ‘We Are International’. When you consider that the University has over 28,000 students, of which more than 7,000 are international, and with 141 nationalities represented, we have an incredibly diverse environment. In addition to the MBA induction week and our cultural awareness workshop, we hold an orientation week for international students, which provides an insight into life in the U.K. and what students can expect when attending the University. We also have a student union which has been voted the best in the U.K. for the last 10 years, and one of its functions is the running of clubs and societies for most of the nationalities represented on campus, which certainly helps if you’re missing home. All of these elements are underpinned by a robust mentoring network and counselling service, so our students always have support. Q. So, whilst you attract a lot of international students, do you have many applicants from the U.K.? When you factor in students from our parttime MBA programme, we’re close to 25 per 29
cent, which is great for both our domestic and international students.
“Ultimately, our professors are like the conductors of an orchestra. Their job is to get the very best out of our students by drawing out their knowledge and experience.”
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Q. How important are your corporate partnerships? We are fortunate that as a research-led university working across myriad industries, we have a front door into large corporate businesses. Having this type of access allows us to not only attract influential guest speakers, but also develop meaningful experiential projects. Q. To what extent do you prepare students for life after the MBA, and what resources are available to graduates, post-MBA? We have something called a Career Accelerator Programme (CAP), which runs alongside the MBA and is very much a part of the offering. CAP’s objective is to help students with their soft skills, and so it goes beyond the MBA in looking at negotiation skills, advanced presentation skills, cultural agility, putting together a professional development plan, and things like sales workshops.
In the second semester we have four conference days, which look at things like the ‘future of work’ from an AI perspective, executive recruitment, and life beyond the MBA. Our final conference is held in London and we go on what we call a ‘career safari’. We visit different firms and hear first-hand the direction in which their businesses are going and the type of personnel they want to recruit. Our alumni network is another great tool for our students, during and after the programme, especially when you consider its geographical reach. Q. Finally, what advice would you give to potential applicants? Beyond meeting the entry requirements, i.e. degree classification and work experience, I think it’s about attitude and having that desire to learn, discover new things, and exploring your potential. The opportunity to be in such a diverse, multicultural setting is special, and it’s one that you will probably not experience again, so I think the takeaway here is to be open and engaged.
ceo-mag.com / Spring/Summer 2018
TACKLING AI'S UNINTENDED CONSEQUENCES CHRIS BRAHM
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hether or not they know it, nearly everyone has had an experience that exposes just how dependent we have become on artificial intelligence (AI). It often comes in the back seat of a car. That’s where I was a few months ago, sitting in a rideshare from suburban Scarsdale, New York, to New York City. The driver had recently emigrated from Nepal, and his ability to quickly find work greatly illustrates how ride-sharing platforms open economic opportunities. Once upon a time, my driver would have had to learn the area well before he could drive a customer from place to place. Now AI mapping had him hard at work just weeks after landing. The New York metropolitan region is one
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of the most complicated urban areas in the world, however, and even with the map, my driver struggled. After making a few illegal maneuvers and an unplanned stop for gas, he did get me to my destination, but I exited the car thinking that I’d once had the privilege to expect a far more capable driver. As AI infiltrates more of our experiences and organizations, it’s important to recognize not only its many benefits but its unintended consequences as well. AI protects us from known and unknown threats, helps us connect to one another, and provides better answers faster and cheaper than humans do. And, of course, it’s great that AI frees us from routine tasks such as reading a map. But are we recognizing and addressing the loss of human expertise that accompanies that new freedom?
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For business leaders and others investing in the technology, there are certain high-gain questions that can help them begin to grapple with leadership in the AI age - including how to manage the unique properties and risks of AI, bring clarity and focus to its deployment, and ultimately make better application of it (see Figure 1). Figure 1
More companies are following technology leaders and beginning to experiment with and adopt machine learning Percentage of companies adopting machine learning
100%
80-90
80 60 40 20-30
20 0
Enterprise Widely adopted
Tech leaders Starting to adopt
Experimenting
Source: Bain & Company
There are also a half-dozen risks that should inform those conversations as well. Risk No. 1: AI can create hidden errors Unlike traditional rules-based programming, AI models are statistical representations of the world. They provide answers based on their learning, but they are imperfect. The opacity of many AI models and their ability to quickly scale make it possible for real errors to remain hidden from view. We are familiar with chatbots unleashed on social media that pick up racist views from their data set because that example is on public display. But what about autonomous driving or flying systems? Their training data is growing exponentially and the models based on it are improving dramatically, yet errors in those algorithms continue to be discovered, sometimes only after loss of life.
Risk No. 3: AI can open new hazards Similar to human workers, algorithms are subject to manipulation. But while a worker is observed by management and makes relatively few decisions in the course of his or her day, an algorithm will make many decisions - often unseen. Spammers learned long ago how to get the best of machine learning systems, and there’s every reason to believe that hackers are only getting started on AI. Look at the election-season manipulations of social media newsfeeds or the cottage industry of search engine optimization. Algorithms can be and are being exploited. As algorithms take on broader roles - setting a price on an e-commerce site, determining a car insurance rate, hiring someone - cause for concern increases. Now managers must anticipate how an algorithm might be manipulated and adjust accordingly. Risk No. 4: AI can institutionalize bias
Risk No. 2: AI can lead to a loss of skill, critical thinking and understanding It’s not only new rideshare drivers who are in danger of becoming excessively reliant on AI. One Silicon Valley engineer recently stated that his site’s recommendation algorithm makes it so that his team doesn’t have to think as much. Whether you run a finance department of a company that relies on algorithmic sales forecasts or you are a salesperson getting leads from one, it’s dangerous to lose an understanding of the fundamentals of your business and what’s truly driving demand. 32
Most AI machines learn by studying examples in curated data sets. AI experts may understand how an algorithm reached its conclusion, or it may be a black box that is mysterious even to experts in the field. This lack of transparency raises concerns about bias, since any algorithm trained on historical data will logically come to conclusions that reflect bias present in that data. In the mortgage industry, for instance, lenders had better be certain their algorithms conform to regulations that they not discriminate based on characteristics such as race and gender. Bias does not have to be so clearly wrong for ceo-mag.com / Spring/Summer 2018
it to lead to bad outcomes, either. In customer analytics, for example, an algorithm trained on data culled from an existing customer base will favor those customers’ preferences. But what about the tastes of the many people not yet served? With algorithms now involved in everything from hiring to the delivery of social services to the needy, one very real risk is simply repeating how things have always been done. Risk No. 5: AI can contribute to a loss of empathy As more companies use bots and other machines for consumer interactions, organizations run the risk of losing touch with their customers. To executives, the concerns of workers managed by algorithms, as rideshare drivers are today, may feel similarly remote. Distance could lessen managers’ empathy and ability to listen to either group, but it doesn’t have to. Though I fly often for work, I have taken just one Virgin Atlantic flight over the past few months, and it was delayed 45 minutes. When I landed, the airline’s systems had already spotted the issue and sent an email apology and a voucher for a discount on my next flight. Rather than feeling irritated by the experience, it left me rather impressed. Risk No. 6: AI can cause a loss of control The convenience and speed of AIdriven decision making are attractive, but sometimes humans need to be involved. There is no clearer example than the integral role that human drone pilots play in the remote bombing of military targets. Today, it’s accepted that human judgment must be involved, but as we grow more accustomed to this technology, it is plausible that could change. Will that be OK? Many such difficult questions will arise around AI’s erosion of human control. It will be essential that leaders grapple with them. Governance matters. Top executives need to be involved in establishing the goals and guardrails around the AI that is increasingly enabling their businesses. For decades, financial services organizations that rely heavily on credit algorithms have been expected to stringently govern risk management; a similar elevation of AI governance may now be needed for organizations broadly embedding the technology. Every materially important algorithm in the business should also have a product manager - a human reviewing and testing the algorithm, auditing its outcomes, and assessing and improving its performance. ceo-mag.com / Spring/Summer 2018
Strong, human listening systems are essential. The key constituents of an important algorithm must be regularly solicited for input and feedback, whether they are customers or employees or other partners. Empathy must guide the management and deployment of any algorithm. The organization must be able to recognize when a reset is necessary. How this plays out for any organization depends on the industry and context. Each will have its own particular AI opportunities and potential pitfalls. There are, however, certain questions that can help any executive or board member stimulate the right conversation around AI: ● How well does this algorithm match the essential tenets of our business? How will it work with those key principles? ● Who is going to ensure that we secure the benefits and not the downsides from its deployment? ● Who are the key constituents affected by this algorithm? Are we soliciting their feedback now? How will we be sure we continue to seek their insight in the future? ● Who is going to operate the algorithm? What are their goals for increasing its impact and innovation? The pervasiveness and scalability of AI mean that algorithms can rapidly affect millions. Competition and progress require its use, but technology is neither necessarily moral nor intrinsically improving. That’s up to the humans who leverage it. In a world shaped by AI, human leadership matters more than ever.
“In a world shaped by AI, human leadership matters more than ever.”
BIOGRAPHY
Chris Brahm is a Bain partner based in the San Francisco office; he leads the firm’s Global Advanced Analytics practice. ACKNOWLEDGEMENT
Copyright © Bain & Company, April 03 2018. 33
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RE E IN N TH W TH C O GA E R I T E W N G R I 21 IT N EM UL N ST H E E E G CE TA CTI NT S N LE NG : TU N RY T
G N I IT ES R W RUL T: E R E N TH EMEING AG ECT NT G N NN LE Y E OF CO H TATUR T EN I WTC L S OO 1 H 2S S S C E THS I N E
INE U B U
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n the digital age, the recruitment of top business talent has evolved to become more sophisticated, refined and techdriven than ever before. As the streams of big data, tech innovation and consumerdemand converge, the ability to shape the wave and stay ahead of the competition is, above all else, the primary challenge for businesses today. That the brightest talent is the hardest to find has always been true. But with the widescale growth of new industries and the continued seismic shift towards all things online, modern businesses must adapt and innovate when searching for a tech-sharp needle in a digital haystack. While the challenge has increased, so
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too have the rewards. Top business schools throughout Europe are educating young, ambitious, multi-skilled high-achievers who are keen to be a catalyst for change. They teach them to think faster than previous generations and to be comfortable with abstract ideas as well as traditional timehonoured business wisdom. Changing Business Needs A long-time proponent of innovative business practice, EU Business School (EU) is at the forefront of this constantly evolving educational landscape. They utilise the experiential model, enabling their students to immerse themselves in all aspects of business management. With a faculty made ceo-mag.com / Spring/Summer 2018
up of entrepreneurs, consultants and business leaders, as well as full-time academics, their students gain a broad perspective of what it takes to succeed in business. Computer scientist Boris Bugarski studied an MBA in Leadership at EU from 2014 to 2016. Shortly after graduation he was snapped up by Microsoft, who recognised his talent. “Microsoft value an MBA,” Bugarski says. “The ability to communicate and the technical knowledge gained from studying an MBA gives you an advantage in the workplace. Your employers know you’re someone who has expertise and can be trusted to deliver results.” The panoramic knowledge and skillset gained from studying at a top business school is a big draw for modern businesses. “Previously, people sought leaders specific to one area,” continues Bugarski. “Now you need to be an all-rounder. You need to understand business models and how to digitize the production flow.” Bugarski became CEO of fast growing AI enterprise data42 at the beginning of 2018. He affirms that, in the modern business era, where yesterday’s rules have been rewritten and the future is uncertain, a forwardthinking approach is needed. “The world is rapidly changing. Companies like Netflix have reinvented business models. Modern businesses need to understand how the new generation works.” Be Seen Online Today’s leaders also need to understand how to engage with talent. Social platforms provide an ideal space in which to connect with and attract top candidates. A CV on its own will not be enough and, with the opportunity to showcase abilities, knowledge and professional attributes online, a far more nuanced approach to recruiter-candidate communication can be taken. Learning how to develop a personal brand across digital platforms is a crucial step in standing out in a crowded job market. At EU Business School, students are coached through seminars, workshops and skills sessions to create a compelling online presence. With a dedicated career services department on-hand to provide personalised counseling and advice, they graduate fully prepared to attract employers. EU’s students also gain an understanding of how companies use data to source their ideal candidates. Through the use of advanced algorithmic tools and big data analytics, modern companies streamline their search for talent in order to find their ideal candidate profile. Having knowledge of the nuances of modern recruitment techniques gives EU Business School graduates a distinct advantage over their peers, enabling them to ceo-mag.com / Spring/Summer 2018
stand out to their ideal employers through a tailored online presence. For students to maximize their chances of catching the eye of their dream organisation, they also need to master the more traditional networking techniques. While online headhunting is on the rise and a presence on sites such as LinkedIn is essential, today’s job seekers still need a watertight CV and strong interpersonal skills. Prajakta Prabhune studied an MBA at EU Munich, where she enjoyed the support of a specialist careers team. “Career services helped me prepare my CV and cover letter in a German format, and in a professional way,” she explains. “And it didn’t stop there, I also got guidance on how to network and look for further opportunities.” After all, a visible and impressive online presence will only ensure that an applicant gets noticed. From that point onwards they will need to be able to demonstrate the skills and the knowledge that the employer requires on a far more personal level. Diversity is Key In addition to requiring candidates with a comprehensive understanding of business, progressive companies are now looking for internationally minded, culturally knowledgeable individuals. Connecting with people who have different values and beliefs helps to widen cultural awareness, supports new perspectives and improves social skills. The ability to build connections with an international group of people is an invaluable life skill and can also be used to great effect when leading an international team. The environment in which business students learn can have a big impact on their social skills in a professional setting. With campuses in Barcelona, Geneva, Montreux and Munich hosting over 100 different nationalities, EU welcomes students from every corner of the globe. Learning in an inclusive, culturally rich space not only enables students to build a network of friends from all around the world, but also gives them the opportunity to learn about the diversity of the world we live in. An open and adaptive attitude towards foreign cultures is cultivated among EU’s students, enabling them to become more adept at making lasting connections. They can discover the politics, economics, business customs and daily life of a country that is culturally very different to their own without even leaving the classroom. As a result, many EU Business School alumni have progressed to play crucial roles in successful international businesses. Julian Baladurage graduated from EU in 2012. On the subject of working in an 35
“Businesses must adapt and innovate when searching for a tech-sharp needle in a digital haystack.”
BIOGRAPHY
EU Business School is a triple-accredited, multi-campus, international business school. EU offers programmes at bachelor’s (BBA/BA/ BS), master’s (MBA/ MSc) and doctoral (DBA) levels, all taught in English. 36
international environment he says “You learn a lot about different cultures, about their way of problem solving, their work ethics, their way of communicating. I mean, I run a company with more than 40 people and we have over 15 nationalities among them. [EU’s international study environment] is quite helpful in building intercultural communication and understanding.” Ricardo Gómez studied a BA in Communication & Public Relations and an MBA in E-Business at EU Barcelona. He believes studying alongside classmates from different backgrounds has been paramount to his success. “The mix of students at EU gave me a global outlook and opened me up to meeting new people from different cultures,” he explains. “You can’t buy this kind of experience; one that enriches you as a person. This is the huge advantage of studying at EU.” From developing essential life skills to forging life-long business connections, the benefits of studying in an international environment are clear. Exposure to different cultures broadens the mind, leading to a greater understanding of how the world works. This knowledge has an intangible quality that cannot be taught through books - it is instead experienced through open interaction with people of the same interests and similar ambitions. Working in diverse teams in which a variety of views, customs and perspectives must be considered builds character, empathy and adaptability. These are fundamental attributes for graduates looking to forge a career in today’s increasingly connected business world. Room to Manoeuvre For modern organisations to get the best out of a new generation of adaptable, cultured and dynamic businesspeople, they too need to show flexibility. The development of talent is as important as the initial recruitment and, with many top business schools rolling out online and blended programmes to complement their on-campus offerings, companies are beginning to reap the rewards of a changing educational landscape. Today, through the rise of online education, businesses can continue to utilise the talents of ambitious workers while they develop their skills and knowledge in their spare time. The popularity of online learning has accelerated in recent years and studying remotely is no longer seen as an inferior alternative to on-campus tuition. Njáll Andersen from Iceland completed an Online MBA at EU in 2017. For him, the flexibility of the study format was key, enabling him to continue his career and enjoy family life while undertaking an MBA. “Having a full-
time job and a family while doing an MBA was obviously challenging,” says Andersen. “But the EU Online MBA programme grants you the flexibility to work in your own time. The programme opens up a world of leadership and management, providing you with the tools to tackle real-world issues and advance in your professional career.” EU Business School is keen to ensure that online students also have the opportunity to network and build lasting business relationships with their classmates. Through interactive online seminars, group case studies and regular face-to-face events on campus, EU’s innovative approach ensures that distance learning isn’t a barrier to expanding your network. “At EU, we believe it’s very important that our Online MBA students have the same opportunity to network as on-campus MBA students”, says EU’s online recruitment manager Saras Gil. “This is why, on the tenth week of every term, we invite our Online MBA students to join us on one of our campuses in Barcelona, Geneva, Montreux and Munich.” Through company visits, guest speaker sessions and a fun social calendar, these on-campus weeks ensure that EU’s online learners have the chance to build connections and feel part of the student community. What’s more, the self-discipline and commitment to personal and professional growth shown by online students is a huge attraction to potential employers. As flexible working becomes more common and new technologies open up international markets, businesspeople need to be prepared to spend days, if not weeks, at a time away from the office. They need to have the organisational skills and technological know-how to make a success of collaborating with teams across different locations and time zones. With interactive webinars, group discussions and case studies, EU Business School’s online programmes ensure that students can prove to employers that they are ready to take on the challenges of international business. Business All-rounders Leadership in the 21st century is multifaceted, requiring technical skills, business acumen, knowledge of emerging trends and current affairs, cultured communication skills and creative drive. Top business schools such as EU are creating the ideal environment for the brightest business talent to shine by transforming the way we do business, learn and communicate. For modern businesses it’s a matter of working hard to identify and recruit the leaders of tomorrow - and then giving them a platform to perform. ceo-mag.com / Spring/Summer 2018
EMPOWERING AND TRANSFORMING AFRICAN LEADERS
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DR ENASE OKONEDO
agos Business School (LBS) is at the forefront of developing responsible managers for Africa and the world. Our robust curriculum enables our MBA students to become knowledgeable about global business, with particular attention paid to the intricacies of doing business in Africa. Although delivered with the African market at its core, our curriculum is applicable to business practice in the global market. The key distinction of our MBA programme lies in the preparation of our graduates to play and win in Africa. Q. The balance of fitting an MBA into an already busy lifestyle will be a key consideration for many students. Please can you tell us more about the accessibility of your programmes? The Full-time MBA runs on weekdays for 18 months, with 15 months dedicated fully to inclass study. Nine months in, participants embark on a 12-week internship programme that allows them to incorporate classroom learning with real-life situations in top organisations, where they are also evaluated for possible future hire.
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This variant of the MBA is targeted at young professionals who have limited work experience and have decided to commit 18 months of their time fully to postgraduate study. The Executive MBA (EMBA) programme is more flexible in delivery as it is designed to accommodate busy professionals. This segment of our target audience combines full-time work with their MBA, as classes are typically held on Fridays and Saturdays, with a five-day intensive week once every semester. The Modular Executive MBA (MEMBA) programme is also a part-time programme that offers flexibility in its scheduling. Students are required to come to the campus for one week each month, with interaction continuing via technologically enhanced means in-between. It is a 12-week modular programme, divided into six semesters and delivered over a period of 24 months. The programme is designed to fit into the busy schedules of business executives. Also included on the programme is the international module, held in conjunction with our institutional partners, where students are required to spend a week. Tuition fees for our programmes have not risen as quickly as other business schools because we are mindful of the needs of the market in which we operate. However, our teaching materials and learning facilities meet world-class standards, and our prices reflect this. The school is located in Lagos, one of the most vibrant cities in Africa, accounting for over 60 per cent of the economic activity in Nigeria, and an area with a broad range of industries and a flourishing entrepreneurial scene. A high percentage of our students come from Lagos and are exposed to the opportunities that abound in the city. They also get to take full
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advantage of the network of senior business leaders we have built in the community over the years.
“Our robust curriculum enables our MBA students to become knowledgeable about global business, with particular attention paid to the intricacies of doing business in Africa.”
Q. The quality of a business school’s faculty is high on the list of considerations for potential students. Please, can you tell our readers a little more about the profile of your faculty? Our faculty is made up of academics and industry leaders who are dedicated to the school’s mission of shaping management practice. Many of our faculty members hold impressive academic credentials and strong industry backgrounds, and include advisors to the government, regulators, and entrepreneurs. They are editors of influential journals, visiting professors at leading business schools, members and fellows of professional bodies and well-recognised authors. A good number of them have also consulted for Nigerian and continental organisations. In addition to teaching their core disciplines, they integrate ethics across all functional management areas. Lagos Business School faculty have the largest case collection in Africa and many of these cases have won global and continental awards. Practical experience is extremely important for business school faculty, and LBS faculty members bring to bear their years of practical experience from engagement with industry. This is required of all faculty, and we encourage them to stay abreast of trends in the industries and fields of study within which they practice. We have a qualification standard that they must meet, and we are aware that the transference of quality knowledge is a function of quality experience. Q. There is an expectation from the market that business schools should be creating responsible leaders. How much emphasis do you place on this in your MBA/EMBA programme? During their careers, our MBA students
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will be faced with situations that will challenge their ethical standards. They will equally have to make responsible decisions to avoid ethical pitfalls. One of the values we strongly promote at LBS is ethics, and we adopt a multidisciplinary approach to its teaching. All MBA programmes include a required course on business ethics. In addition, 10 per cent of sessions on all taught courses are devoted to ensuring participants are equipped with the ability to deal with ethical issues in business, and in the context of the society in which they practice. Participants are acquainted with commonly held standards of ethical behaviour in business situations, and use the case study method to explore ethical issues that occur in real-life organisations. Our MBA programme includes an entrepreneurship module where students are given seed capital of less than $15 with the goal of building a business which solves a societal problem and funds itself. This forms part of their individual corporate social responsibility activity. They give an account at the end of the semester, and a large percentage of them return with success stories. The MBA classes also choose corporate social responsibility programmes for execution as a group. LBS has its own Sustainability Centre, where rigorous research work is carried out on sustainable solutions to Africa’s needs. The centre brings together theory and practice on sustainability, builds leadership skills and supports constructive dialogue and collaboration between business, government, civil society and academics to find solutions to critical sustainability challenges. The outcome of this is then integrated into our (E) MBA curriculum Through these courses, participants can build their capacity to lead positive change for sustainability within their organisations and in society. Q. In your opinion, what are the three most ceo-mag.com / Spring/Summer 2018
important skills the market requires from business leaders and how are you equipping your MBA students to meet these demands? Expectations for business leaders have evolved over the past decade, and at LBS we make sure to identify these and stay on top of the trends. Through our relationships with top employers and market leaders over the years, we have learned that the most sought-after skills are critical thinking, leadership and innovation. Organisations seek individuals who can valuably contribute to meeting their set objectives and organisational goals. The market is looking for dynamic individuals who are willing to galvanise change in their chosen industries. The burden is on us to equip our students with the skills to achieve this by integrating the needs of these industries into the curriculum. We help students hone their leadership skills through dedicated modules. We engage them in an action-learning project where they are required to review the operations of selected SMEs, and design an action plan to help them reach the next level. In the Nigerian market, SMEs are a major contributor to economic development. In a 2013 survey carried out by the National Bureau of Statistics, the total number of SMEs in the country stood at 37,067,416 accounting for approximately 47 per cent of Nigeria’s GDP. To further prepare our students to tap into this thriving sector of the economy we offer a course on entrepreneurship in their second year. We also focus on teaching our students to build their critical thinking skills; the approach is to find out the “why?” before embarking on any task, no matter how inconsequential it might. Our MBA participants are taught to probe and question the status quo and not approach situations assuming the facts. Q. To what extent do you liaise with local and national businesses to understand the ROI expectations of employers? At LBS, we believe the main thing that should set African business leaders apart from their global counterparts is a thorough understanding of the landscape, challenges, and practices of business in Africa. The education we offer at LBS is tailored to meet the needs of African managers, and it is based on local and global case study pedagogy, using real-life scenarios to form the basis for class discussions which address the challenges attached to various business environments. We research African companies and proffer solutions based on first-hand knowledge of the problems faced by these companies. We then test these solutions within the local business environment, ceo-mag.com / Spring/Summer 2018
ensuring we provide homegrown solutions to continental challenges with a global outlook. We periodically hold human resources forums to feel the pulse of recruiters and understand their needs. We also carry out focus group discussions to get in-depth analysis on the expectations of an LBS MBA graduate and reflect necessary adjustments in our curriculum wherever necessary. We are flexible enough to incorporate the input of HR practitioners, CEOs, current students and alumni into our curriculum. We also promote experiential learning by ensuring our students engage in realworld scenarios with businesses locally and internationally. As a requirement of the MBA programme, students undergo threemonth internships with organisations across different sectors within and beyond Nigeria. Students work on specific projects and proffer practical and creative solutions to the various challenges these organisations may be facing. Finally, we expose students to key industry players and recruiters through an annual career fair early in the course. Thanks to this engagement, students gain an insight into current operations in industries of interest, and learn to position themselves for the unique needs of those industries. Q. The MBA market is fast-paced, experiencing the frequent addition of new programme offerings, developments in technology and increasing ROI demands from students. How will LBS ensure that it continues to meet these challenges? The key to meeting our students’ demands is to remain sensitive to their changing needs whilst improving on the quality of our offerings. For example, we recognised the need, value, and importance of having our programmes accredited and now have AACSB accreditation, which is an accolade that only five per cent of business schools worldwide can claim. We are also accredited by the Association of MBAs, and were recently ranked in CEO Magazine’s Global Rankings and The Economist’s EMBA Ranking. Over the next 12 to 18 months we plan to strengthen the life-long learning capabilities of our students and graduates by organising refresher programmes and other engagement activities. We will also customise the MBA experience further to suit the changing needs of our graduates and increase the relevance of our programme to industry participants. We hope to launch a new MBA format, create new electives for students and strengthen our focus on leadership, ethics, sustainability and social impact within our curriculum. Finally, Lagos Business School will continue with the internstionalisation of the MBA programme.
BIOGRAPHY
Dr Enase Okonedo is Dean of Lagos Business School, Nigeria. She is a Fellow of the Institute of Chartered Accountants of Nigeria (FCA) as well as a Fellow of the International Academy of Management (IAM). In November 2015, she was conferred as a Fellow of the Society of Corporate Governance Nigeria (SCGN) in recognition of her exemplary leadership and contributions to good governance in the Nigerian Education sector. Dr Okonedo serves as a member of the AACSB International Board of Directors and the academic advisory board of the Global Business School Network (GBSN). 39
HOW TO MANAGE CONFLICT: SIX ESSENTIALS
From Hostage Negotiations to the Boardroom, These Tips Work
A
GEORGE KOHLRIESER
fraid of conflict? You wouldn’t be human if you weren’t. However, if you train your brain to openly face conflict and negotiate win-win outcomes, you will grow your leadership effectiveness enormously. Managing conflict will create stronger bonds in a team, encourage beneficial business partnerships and improve your ability to inspire and engage. It is also key to generating the creativity and innovation necessary to lead in today’s often turbulent markets. As a hostage negotiator of over 45 years, my experience has taught me that what works in an extreme situation like a hostage-taking also works in a business setting. Hostage situations can be dramatic and intense, but you don’t hear about most of them in the news. That’s because more than 95% are resolved peacefully, without casualties, and with the hostage-takers accepting the consequences. Wouldn’t you like to enjoy this success rate in business? Master these six essential skills to turn conflict into a constructive tool for individual and company success 1. Create and maintain a bond with your adversary Conflict, by definition, is when a difference
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of perspectives is characterized by tension, emotion and polarization. It arises when human bonds are broken and people experience feelings such as loss, frustration and grief – real or anticipated. In a corporate environment, emotional pain may come at an individual level from, for example, a missed promotion; or a loss might be felt throughout an organization when a major contract is lost. Creating a bond will enable you to avoid getting caught up in personal feelings about the other – the Achilles heel for many. Bonding defuses conflict, even in the most devastating circumstances. One example from my experience is a grandmother who created a bond with a night-time intruder, saving her own life and that of her granddaughter’s. Or, less dramatically, you may bond with a colleague to successfully leverage your differing viewpoints in a joint work assignment. You don’t have to like the other person to create or re-establish a bond. You only need what the eminent psychologist Carl Rogers called “unconditional positive regard.” This is a fundamental skill of being able to accept anything as a starting point, even if you do not agree. Acceptance and agreement are two very different things that are often confused. Treat the other party as an ally, not an enemy,
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and find ground for mutual respect, positive regard and cooperation. Being able to separate the person from the problem is a fundamental leadership skill – completely learnable – that makes it possible to avoid responding negatively to personal attacks. Maintaining this awareness also makes it possible to focus on real issues and common goals. 1,2 You will find yourself collaborating with the other party and genuinely wanting to help them as well as yourself towards a true solution to the conflict. 2. Establish a dialogue for conflict negotiation Dialogue requires self-awareness and self-management. Your mind’s eye will help you overcome your natural fear of conflict and see it in a different light. The mind’s eye forms the way you view a particular situation and determines how you will act or react. The fear you feel towards conflict is real: It is shaped by experience. Many leaders facing conflict can become “hostages” to their inner fears, but it doesn’t have to be so. Research suggests that we can change the way we perceive and behave in a situation. 3 Just as an athlete can envision winning a race, you can train yourself, by creating an inner dialogue, to see something as an opportunity, not as an obstacle, or to see the “adversary” as a potential ally. You can change your state of being from fear to courage and do what is counterintuitive: Go towards the person with whom you are in conflict and establish a dialogue. Talking, dialogue and negotiation create
genuine, engaging and productive two-way transactions focused on the common goal. You can harness the energy from the fearful situation and redirect it into dialogue. This means talking - and listening - without hostility or aggression. This may seem like a tall order in some particularly intense situations. In hostage-takings, for example, negotiators are typically dealing with someone who is extremely hostile at the outset. However, responding to aggression with aggression will not serve anyone’s interest. Connect with the humanness of the other person and they will be influenced to enter a dialogue, creating an effective dynamic for conflict management. 3. “Put the fish on the table” Conflict is often messy. However, when you create a bond with the other person, you can face the difference together head-on. The expression “put the fish on the table” comes from a ritual I observed in Sicily, where the fishermen put their fresh catch on a large table and work together in a smelly and bloody mess to clean their fish. Their deep bonds and a clear goal make collaboration easy and enjoyable, even over this difficult task. I’ve actually experienced this ritual myself, invited by a group of fishermen to join them one morning. After getting through the bloody, messy job, we were rewarded by the excellent fish dinner we shared. We have to clean every fish to enjoy that great fish dinner. Imagine if, instead, the fishermen left the fish under the table – no one willing to do their part. The stench would soon take hold.
“Remember that loss, whether real, anticipated or imagined, is ultimately the root cause of any conflict.”
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Something similar happens when a conflict (a fish) is kept under the table rather than being put on it. There’s no opportunity to work through the mess of sorting it out for a mutually beneficial outcome. And to take this analogy a step further, you’ll get absolutely nowhere if you go slapping the other party in the face with the fish! Knowing when and how to “put the fish on the table” is a leadership skill that borders on an art. If you can accurately judge the circumstances and your adversary’s state of mind, you will maximize your success in a conflict management strategy. 4. Keep in mind the cause of the conflict The fish is on the table, you are ready to dialogue, but about what? What are the roots of the disagreement? Not only do you need to understand your own perception, you need to be aware of the other party’s. Often, a disagreement stems from people having a different set of goals, interests or values. There could be different perceptions of the problem, such as “It’s a quality control problem” or “It’s a production problem,” and this is often exacerbated by different communication styles. And, let’s face it, there are simply some difficult people out there. If an individual is motivated principally by their own ego and thirst for power, conflict is likely to swirl around them. With such a person, your conflict management skills become all the more critical. To address the conflict you are facing, it is helpful to ask yourself whether it stems from an interest or a need. An interest is transitory and more superficial, such as land, money or a job. A need runs deeper – identity, security, respect, for example. Many conflicts appear
to be about interests, but in fact the behavior of the people involved is driven by needs. For example, a colleague passed over for a promotion may say they are upset about lost income, but the real wound is a feeling of lost respect or identity. When you know what is really bugging the other person, you can respond to that – instead of the words they may use – in order to resolve the conflict. Remember that loss, whether real, anticipated or imagined, is ultimately the root cause of any conflict. 5. Reciprocity works The law of reciprocity is the foundation of cooperation and collaboration. You’re likely to get back what you give. Reciprocity is a factor in empathy – the ability to re-create and understand others’ experience, intention and feeling within ourselves. This isn’t just social convention; researchers have shown that mirror neurons in the brain establish empathy and therefore reciprocity. 4, 5, 6 Mutual exchange and internal adaptation allow two individuals or more to become attuned and empathetic to each other’s inner states. You will be most effective at using reciprocity if you master the technique of empathizing and managing how you express that empathy – both verbally and nonverbally. This social awareness allows you to make the right concessions at the right time. Once you have made a concession, it is likely that the other party will respond in kind – in other words, reciprocate. And when you recognize a concession has been made, reciprocate with one of your own to move the negotiation forward.
"If you can accurately judge the circumstances and your adversary’s state of mind, you will maximize your success in a conflict management strategy."
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6. Nurture a positive relationship throughout conflict Maintaining a positive relationship means understanding, respecting and staying aware of the other person’s perspective. Even – or especially – when you don’t agree with a specific point or behavior, demonstrate your acceptance of them as a person. You will need to balance reason and emotion – because emotions such as fear, anger, frustration and even love may disrupt otherwise thoughtful actions. As hostage negotiators know, it is more productive to persuade than to coerce. Communicate to the other person your own perspective, and reflect back your understanding of theirs. These are communication skills for conflict management that you can learn, practice and perfect. If you can help the other party maintain feelings of acceptance, value and worth – all basic psychological needs – throughout a conflict negotiation, you will also help them to stay focused on the goal of a mutually acceptable outcome to the conflict. Capitalize on the conflict management opportunity Business managers and companies that use these six essential skills for conflict management leverage great opportunity. The most important conflicts – the ones that lead to positive results when managed well – are the ones in which people feel personally invested in their positions or are bringing something of themselves as human beings into the interaction. As diversity and interdependency in organizations increases, there is opportunity in potential conflict. Dealing effectively with these conflicts enables a company to leverage
the richness of diverse perspectives for innovative outcomes. In fact, conflicts are the lifeblood of high-performing organizations. Disputes, disagreements and diverse points of view about strategy and implementation create energy, stimulate creativity, help form strongly bonded teams, and bring about change. An organization will reap the benefits when the organizational culture fosters a willingness to take the risk of embracing conflict. References 1. Halperin, E. and M. R. Tagar. “Emotions in conflicts: Understanding emotional processes sheds light on the nature and potential resolution of intractable conflicts.” Current Opinion in Psychology, Vol. 17, 2017: 94–98. 2. Zinchenko, A., P. Kanske, C. Obermeier, E Schröger, and A. S. Kotz. “Emotion and goal-directed behavior: ERP evidence on cognitive and emotional conflict.” Social Cognitive and Affective Neuroscience, Vol. 10, Iss. 11, 2015: 1577–87. 3. Neck, C. P., and C. C. Manz, “Thought self-leadership: The influence of self-talk and mental imagery on performance.” Journal of Organizational Behavior, Vol. 13, Iss. 7, 1992: 681–699. 4. Hein, G., Y. Morishima, S. Leiberg, S. Sul, and E. Fehr. “The brain’s functional network architecture reveals human motives.” Science, Vol. 351, Iss. 6277, 2016: 1074-8. 5. Lahvis, G. P. “Social reward and empathy as proximal contributions to altruism: The camaraderie effect.” Current Topics in Behavioral Neurosciences, Vol. 30, 2017: 127–157. 6. Corradini, A., and A. Antonietti. “Mirror neurons and their function in cognitively understood empathy.” Consciousness and Cognition, Vol. 22, Iss. 3, 2013: 1152–61.
“You can change your state of being from fear to courage and do what is counterintuitive: Go towards the person with whom you are in conflict and establish a dialogue.”
ACKNOWLEDGEMENT
Courtesy of IMD Business School.
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“The ISEG MBA – as any other good MBA – will transform you, both professionally and personally.”
THE ISEG MBA: PERSONAL AND PROFESSIONAL TRANSFORMATION A L E X A N D R A S K I N N E R TA L K S T O J O RG E G O M E S Tell us a little bit about you My name is Jorge Gomes. I am the MBA Director at ISEG and a lecturer in organisational behaviour and human resources management. My background is in organisational psychology and business studies. I completed my PhD in Innovation Management at Manchester University in the U.K. My defining attribute is my strong belief in the human capacity to create a better world over the long-term. Describe your vision for the MBA? Contrary to popular thinking, I am not really concerned about our MBA becoming a reference point in the market, or being the first in the country. I don’t think that an MBA should be defined in reference to the market. Rather, MBAs should exist to develop high-level competencies in students. Hence, I would like ISEG’s MBA to help students develop a full set of high-order or metalevel competencies that will allow them to create sustainable and high-performance organisations and industries. Specialisation or traditional programme? ISEG’s MBA is a traditional programme, which uses innovative approaches to teaching and learning. Although we cannot speak strictly of a specialisation, we are nevertheless focused on innovation and entrepreneurship. Over the last two years, we have added a focus on intrapreneurship, as many of our students aim to bring revolutionary thinking to their existing organisations. Are you more focused on core business skills or nurturing innovation and entrepreneurship? ISEG’s MBA has three complementary pillars: 1) development of 360º business skills, from marketing to strategy, and from finance to operations management; 2) leadership and team building skills, including negotiation and mindfulness; 3) intra and entrepreneurship innovation. Online learning or campus-based learning? One hundred per cent on-campus learning, although we do use new technologies throughout the MBA, from interviews with applicants to communication with students
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and sporadic online sessions with foreign speakers. Study trips: valuable learning experiences or education vacations? We have a few learning experiences outside the campus. For instance: A weekend at the Air force Academy, during which students undergo a set of field exercises aimed at training leadership and team-building competencies; One week in San Francisco, during which students are immersed in an intensive course on innovation and entrepreneurship. These are valuable learning experiences, and students value the ludic part of these programmes. What’s the biggest challenge facing Deans of MBA programmes? To change their programmes as fast as the world is changing. The unpredictability in business has reached a remarkable level. To cope with such a fast-changing world, MBAs should be able to adapt fast, which is – I would risk to say – a mission impossible for most MBAs around the world. What are the top three responsibilities for business schools? 1) To help develop top-level competencies in students, both from a business standpoint and socially (e.g. ethics); 2) to contribute to a more inclusive and wealthier society; and 3) to contribute to a better and more sustainable world. The first drive is focused on people, the second on the community and the third on future generations. Business schools need to stimulate learning by… Focusing on learning. Business schools, academics and training professionals have been focusing on training for too long. By doing so, they have been creating structures and systems that leverage training. This is no longer the best solution. We should focus on structures, systems, and methods that truly help learning. This is a paradigm shift that will require teachers to… (re)learn how to teach! Can you point to a higher education trend that you didn’t see coming? ceo-mag.com / Spring/Summer 2018
I am a recent arrival to the higher education system so I cannot really pinpoint a trend that I did not see coming. I might have a better answer in two years from now! One that you did… The emphasis on learning, rather than on training. Three business skills that are missing from the market? 1) Critical thinking: people still take many things for granted, without questioning the fundamentals and/or reasons behind decisions and actions. 2) Sustainable vision: organisations and people still look at the short term. The future of Humankind is being designed in the present. If we do not act now, our children and grandchildren might not have a future. 3) Holistic view: societies, organisations and people need to realise that we are all interconnected. The butterfly effect should be part of MBA thinking. Three ‘soft skills’ a business leader cannot do without? 1) Cultural mindset. 2) Dealing with Millennials and the multi-generational landscape. 3) The very concept of “soft skills” might need to be rethought, as people will increasingly need to interact with machines. Regarding the last point, the various interviews held between celebrities and robot Sofia in 2017 and 2018 show that human beings are not entirely prepared to deal with these forms of AI. A business school’s role in nurturing these is? Fundamental!!! One application or interview “do”… Show resilience and perseverance. An MBA is a highly demanding transformational programme. Applicants – and their families – must be aware of this long-term journey.
experiences, religious beliefs, and political positions. This allows ISEG to accept and nurture multiple ways of analysing the world and stimulates the need to take various perspectives into account, before carrying out interventions in economy and society.
“Societies, organisations and people need to realise that we are all interconnected. The butterfly effect should be part of MBA thinking.”
Are there improvements you would like to make? Probably managing the aforementioned perspectives more effectively. Such variety can create tensions and conflicts, which demand ongoing – and sometimes endless – negotiations to reach consensual decisions. Or, at least, decisions which favour the majority. The fact that ISEG belongs to the University of Lisbon, which is a public institution, adds bureaucracy which is often contrary to efficiency and fast decisionmaking. What does the future hold for ISEG? ISEG has several goals, including internationalisation and executive training. In the short term, however, AACSB accreditation is around the corner (end of 2018). ISEG also has a new Dean – elected in May 2018 – who is bringing innovative ways to management. The new Dean is the first woman in 108 years, and one of the few coming from outside ISEG. Do you have any parting words for would-be MBAs? The ISEG MBA – as any other good MBA – will transform you, both professionally and personally. Nothing prepares you for the transformational process that you will encounter here, so you need to come with the right attitude, which includes: positive thinking, passion, perseverance, and loads of energy!
One application or interview “don’t”… Come with little information on what an MBA is, or what is required. What’s the best thing about ISEG? The variety of perspectives from all points of view: scientific paradigms, background
BIOGRAPHY
Jorge Gomes is the Director of the ISEG MBA programme in Portugal and a lecturer in organisational behaviour and human resources management. ceo-mag.com / Spring/Summer 2018
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“Integrating social outreach into core business areas is the best way to prevent the sort of inconsistency that may draw negative attention.”
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WHEN DOING GOOD GARNERS BAD PRESS GEORG WERNICKE
Firms that engage in corporate social outreach should make sure to send consistent signals.
I
n 2016, U.S. companies donated a total of $18.6 billion to charity. That same year, philanthropic donations from FTSE 100 companies added up to £1.9 billion. Sincere altruism doubtless accounts for some of this largesse. However, many companies also hope to manage public perception. If a corporation is seen as contributing to positive social change, it becomes that much harder to vilify it in the public mind – or so the reasoning often goes. Taken to a cynical extreme, this logic could turn companies into pious sinners, attempting to skirt accountability for their questionable conduct through conspicuous prosocial activity. But where senior management might see a balancing of the scales, outsiders may detect hypocrisy. Rather than an indicator of prosocial orientation, unusually robust or sudden philanthropy could be interpreted as a sign of bad conscience. My recent paper in Organization Science (co-authored by Jean-Philippe Vergne of Ivey Business School and Steffen Brenner of Copenhagen Business School) finds that companies sending mixed signals on social issues are more likely to receive a harsh media spotlight than a halo. Feeling the heat,
they are also apt to take steps to resolve the contradiction and salvage their reputations. CEO Overcompensation We chose perceived CEO overcompensation as an example of a negative signal that has inspired stinging criticism in recent years. Increasing media focus on executive pay is tied to broader concerns about rising levels of income inequality across the developed economies. Companies may sow cognitive dissonance if they try to present themselves as good citizens by acting prosocially, while at the same time lavishing compensation packets perceived as excessive on their CEOs. Alternatively, the contrasting signals may simply confuse or irritate observers. We wondered whether that made any difference to how those companies were covered by journalists, compared to companies with more consistent signalling. For the years 1995-2006, we gathered CEO compensation data for 1,477 S&P 1500 companies. To gauge media disapproval, we scoured more than 12,000 news articles in the Factiva database for negative tone, CEO name and compensation-related words.
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realise that their expensive efforts may come to naught due to clashing signals (such as CEO overcompensation), they make tangible changes to preserve the organisation’s standing in the public eye. Our study did not look at whether corrections to overcompensation were maintained over the long term. Nonetheless, our findings may counter the pessimism of some commentators – including the U.S. business editor of The Economist, who said in 2005, “Journalism clearly has an ability to influence this debate, not least by shaming people who read the newspapers. But generally, I don’t think this has been terribly effective…I also wonder whether shaming really is enough and whether the press “When leaders really has the capacity to make a big difference.” realise that their We show that media coverage expensive efforts does sometimes incentivise to change. Also, by may come to naught companies selecting philanthropic companies as subjects of scorn, journalists due to clashing seem to have wisely maximised the signals (such as CEO impact of their message of change.
For the companies in question, we measured the degree to which annual CEO pay was, in fact, higher than strictly warranted by company performance, size, industry standards, etc. Finally, we tracked each company’s philanthropic activity with the help of the independent research firm KLD. After controlling for qualities that may affect media coverage – such as the track record and notoriety of both companies and CEOs – we found that consistency was indeed significant. Disapproving coverage of a CEO’s perceived overcompensation was generally much greater when the focal company also engaged in philanthropy. Firms Taking Action Furthermore, companies did appear to take remedial action. Following a round of bad press, philanthropic companies promptly reduced CEO overcompensation. The extent of the correction was directly proportional to the amount of overcompensation, as well as the company’s level of philanthropic activity. Cuts happened more at older firms, but less at larger, higherperforming firms. We speculate that firms with a demonstrated commitment to philanthropy are particularly sensitive to how they are portrayed in the media. They view prosocial outreach, at least partly, as a reputationbuilding exercise. When leaders
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overcompensation), they make tangible changes to preserve the organisation’s standing in the public eye.”
Mixed Signals We can only speculate as to why the conflicting signals we studied tended to sharpen media disapproval. It is possible that corporate hypocrisy simply makes an intriguing hook for a news story. Or perhaps journalists, being rather meagrely compensated on the whole, are biased towards pursuing stories about the unfair advantages of one-percenters. We expect, however, that our findings can be generalised to a wide variety of inconsistent signals. For example, a firm embroiled in an environmental scandal could worsen its situation by making a large donation to Greenpeace. A company’s outreach on behalf of women and girls may end up triggering a media investigation into the gender composition of its own leadership team. Corporate social engagement creates real value for companies and their stakeholders. When CEO overcompensation was not a factor, our study showed that philanthropy was strongly associated with more positive media coverage. From a reputational perspective, however, prosocial activity is less likey to be effective if it is isolated within a CSR department, away from the real action. Integrating social outreach into core business areas is the best way to prevent the sort of inconsistency that may draw negative attention.
ACKNOWLEDGEMENT
Courtesy of INSEAD Knowledge. BIOGRAPHY
Georg Wernicke is an Assistant Professor in the Strategy and Business Policy Department of HEC Paris. Formerly, he was a visiting scholar at INSEAD. This paper was presented in an Entrepreneurship & Family Enterprise brown bag session organised by the INSEAD Social Innovation Centre. 47
“The small cohort size allows for close interaction with faculty members and fellow students. You are less likely to become ‘invisible’, and you get to know your peers on a more personal level.”
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LIFE DURING ‘AND AFTER’ THE EXETER MBA C E O M AG A Z I N E TA L K S T O TAU S I F B O R D O L O I
Q. What did your career path look like, preMBA, and why did you decide to put your career on hold for an MBA? I started my career as a junior analyst in a life-science consulting firm where I led knowledge management projects for pharmaceutical and IT clients. After three years, I joined a large chemical/biotech organisation where I supported corporate strategy and policy projects, focusing on a range of areas (M&A advisory, technology scouting, competitive intelligence). However, after a while, I started realising how similar everything I did was. I reached a point where I felt the need to intellectually stimulate myself, learn new functional skills and expand my professional network. I thought ticking these points off the checklist would stand me in good stead for more challenging roles in the future.
Q. Why did you choose to study at the University of Exeter? I didn’t want to just pursue traditional disciplines like marketing, finance and operations; I was looking for an MBA programme that would introduce me to emerging concepts like the circular and sharing economy, and the Exeter MBA offered modules in these areas. The University’s strong ranking was another key reason I chose Exeter. Q. How has your life/career changed since completing your MBA? The Exeter MBA certainly lived up to expectations and made me proficient in a number of areas, such as innovation and new business models. It also broadened my cultural awareness and helped me develop long-lasting relationships.
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Halfway through the programme I interviewed at a leading automotive firm and was offered a position in their Capital Project Investments Group in Paris. The Exeter MBA allowed me to change industry, function and country. Q. What aspect did you find most challenging about the MBA programme? The Corporate Challenge where MBA students need to understand a problem posed by a firm, come up with practical solutions, and present to senior leaders, all within four of five days! Q. What were the most valuable lessons you learned during your MBA, and can you give examples of when you applied what you learned in your post-MBA career? Grades are important but networking is even more so - building a strong and expansive network gives you insight into industry trends as well as information on job openings. Mastering topics that will allow you to target your dream roles, firms and/or career is key. If you want to launch your own venture, focus on the entrepreneurship modules and take advantage of the numerous start-up challenges organised by the University. By applying finance knowledge that I acquired during the MBA, I was able to successfully navigate interviews and get a finance job in an automotive firm.
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Q. What was your most valuable experience on the MBA? Working and collaborating with different stakeholders during my MBA consultancy project. It allowed me to apply the concepts that I learnt in the innovation, B2B marketing and strategy modules to solve a real business problem. My recommendations were very well received by the client and the project was awarded ‘Best MBA Project of 2016’.
“The Exeter MBA allowed me to change industry, function and country.”
Q. Why would you recommend the MBA at Exeter? The programme has a strong focus on what’s happening in business today, for instance, the module on emerging business models will allow you to comprehend and appreciate the impact of big data, artificial intelligence and automation on businesses and society. The small cohort size allows for close interaction with faculty members and fellow students. You are less likely to become ‘invisible’, and you get to know your peers on a more personal level. This can have a positive impact on group assignments, and you feel more comfortable reaching out to colleagues later in your career. About The School The University of Exeter Business School is one of the UK's leading centres of business education and research, bringing together internationally respected academics with students from over 80 countries.
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HOW TO PREPARE THE ORGANIZATION FOR A NEW MINDSET
T H I S I S A N E D I T E D E X T R A C T F R O M T H E D E S I G N T H I N K I N G P L A Y B O O K: M I N D F U L D I G I T A L T R A N S F O R M A T I O N O F T E A M S, P R O D U C T S, S E R V I C E S, B U S I N E S S E S A N D E C O S Y S T E M S, B Y M I C H A E L L E W R I C K, P A T R I C K L I N K A N D L A R R Y L E I F E R ( W I L E Y, J U N E 2 0 1 8 ).
P
eter has carried out many projects with design thinking, and innovative and customer-centric solutions have emerged. His environment, his direct supervisors, and colleagues also know that design thinking is an asset for the company. However, Peter notices more and more often that not all teams back the mindset of design thinking. In discussions with like-minded people, at conferences, or in forums, he realizes that design thinking can bring about relevant solutions; yet many organizations have a hard time disseminating the approach transversally. Resentment grows, and solutions are sought to change the mindset. At a recent meeting of the DTP community in Zurich, a colleague of Peter’s who was an enthusiastic cyclist came up with an apt metaphor:
“Design thinking is like a fantastic racing bike and it effectively takes us where we haven’t been before! But the fact we own a racing bike does not mean we’ll be able to cross an Alpine pass. We must have the corresponding fitness for it!” Peter is convinced that his organization like many other companies - does not have the necessary fitness to live design thinking all the way, with all its consequences. Upon closer inspection, Peter quickly realizes that his organization has too many departments that do not share the same mindset: Although they have a great racing bike, they have a beer belly and no fitness whatsoever. So, what is the problem that prevents design thinking from spreading? The problem Peter shares with others who are responsible for innovation is the form of the organization in which they work. The company has a typical silo structure, which has become manifest over the years and 50
allows management to deal with growing complexity and the requirement for more efficiency. It is made up of specialized teams that optimize their own fitness. The preferred tools are process improvement and operational excellence, which make the silos even more efficient. Transversal collaboration for creating a consistent customer experience falls by the wayside. To overcome such a silo mentality, we must undertake consciously designed measures and initiate change processes that make cross-departmental collaboration possible. This is the only way to establish a new mindset in an organization as a whole. Design thinking is always only as effective as the capacity of the organization to implement the result comprehensively and evenly. How can the change be tackled, and why are companies so often held hostage to this problem? Many companies have a diversified organizational form in which the individual business units differ greatly and cultivate their own work processes and subcultures. Although this form of organization can help to guide a growing organization into manageable channels, the separation of the organizational elements can result in the fact that the overriding meaning of the company gets lost on the way. The business units and departments see the objectives for their work exclusively in relation to themselves. Objectives that are meaningful to all organizational units are not universally lived. If they do exist, usually they’re only the key financial figures of the company - such as profit and EBIT - which are set for everybody in the company as orientation and corporate objectives. The consequence is that an integrated and coordinated way of working across the entire organization is quite difficult. Moreover, human, non-functional relationships fall by the wayside due to the lack of motivating goals. ceo-mag.com / Spring/Summer 2018
2 DIVE R PHAS SIFICATI ON E
1 PIONEER PH
ASE
3 P INT
HA EG SE RAT I
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PIONEER PHASE
AN ORGANIZATION BUILT AROUND A LEADING FIGURE
FAMILY
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DIVERSIFICATION PHASE EMERGENCE OF A COMPREHENSIBLE AND MANAGEABLE STRUCTURE
MACHINE
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INTEGRATION PHASE A HOLISTIC STRUCTURE OR SYSTEM
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“As a creative tool, design thinking can fulfil a methodological role in the transformation of the company by providing important tools.”
BIOGRAPHIES
Michael Lewrick, PhD, is an international speaker and teaches design thinking as a visiting professor at various universities, and author of Design Thinking: Radical Innovations in a Digitized World. Patrick Link, PhD, is Professor of Product Innovation and Chair of Industrial Engineering at Lucerne University of Applied Sciences in Switzerland. He is intensively involved in the development of agile methods in product management, design thinking and lean start-ups. Larry Leifer, PhD, is one of the founders of Design Thinking, and teaches in the d.school at Stanford University where he is Professor of Mechanical Engineering Design. He is the Founding Director of the Hasso Plattner Design Thinking Research Program at Stanford. 52
How do we react to changes in value creation? The customer experience is becoming the primary product in many segments owing to the transition from industrial manufacturing toward servitization (alignment to goods and services). Economic success is determined not by the quality of the product but by the fulfilment of our needs across the entire customer
experience chain. Customers want an experience—no matter what kind—that they can share with others and that enables them to fulfil their wishes. For this reason, customer centricity is (again) becoming one of the core issues of management in the experience economy. The mindset of design thinking can make a crucial contribution to the development of customer-centric solutions. What is it that successful businesses do differently? Successful businesses gear all their activities and all areas, as well as their employees, toward the customer. In addition, they integrate the customer and his needs deep in their strategy, such as by creating an enhanced awareness of strategic foresight. They put the focus on customer interaction and the design of worlds of experience. In many companies, this requires a radical change in the usual understanding of leadership, away from the leadership doctrine of an omnipotent management toward a leadership culture (and a mindset) that enables the organization to overcome this functionally acting structure. The change in the understanding of leadership is also seen as a necessary step toward an integrated organizational form in which employees develop a high degree of intrinsic motivation but, at the same time, direct their activities toward an overriding goal shared by the entire organization. A unifying and integrating meaning that can be enshrined using the mindset of design thinking helps to implement transformation. As a creative tool, design thinking can fulfil a methodological role in the transformation of the company by providing important tools. The human-centred approach helps to establish orientation toward the customer, which includes considering colleagues from other departments as customers as well. In our experience, effective design thinking can optimally unfold only in an integrated organization. The path to the integration phase, however, starts in the so-called pioneer phase, in which the organization is often built around a leading figure. Then the company grows and diversifies into different areas. In the process, different cultures and silos evolve. This phase is characterized by efficiency and effectiveness. Only then can an organism come into being that ensures that these systems are perfectly matched with one another. For this reason, organizations must be reorganized and rebuilt at regular intervals. In nature, an apple tree must be cut and pruned for it to yield a rich harvest again and again. ceo-mag.com / Spring/Summer 2018
The else school of managemenT aT millsaps college offers 3 unique graduaTe programs:
mba, macc, and the executive mba located in Jackson, mississippi, The else school of management at millsaps college offers two distinct master of Business programs and one master of accountancy program taught by nationally ranked faculty. let us help you continue your journey. for more information about the mBa, macc, or emBa program at millsaps college, visit mba.millsaps.edu.
ceo-mag.com / Spring/Summer 2018
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LEVERAGING YOUR EMBA THE MILLSAPS COLLEGE EXPERIENCE
I
DR VONDA REEVES DARBY
spent many years in a private practice setting, in which financials were explained by simple statements such as “we’ve always done it this way”. The frustration of not having the in-depth analysis of the financials was daunting to me, especially when it was time to discuss revenues. I decided it was the right time to undertake an EMBA and fulfil a deferred dream-goal. As a graduate of the college 30 years ago, I knew that Millsaps was the right choice for me. The programme’s reputation was a reflection of what the college’s repetition had been as an undergraduate. It had long been nicknamed “the Harvard of the South”. It was initially very difficult for me to find the right balance between work and education. My work is significant as my practice is one of the busiest in the state. I also found it difficult to switch to coursework, having been out of the classroom for 30 years prior to embarking on this journey. Thankfully, the Millsaps faculty were hugely supportive, offering unlimited experience. Within the classroom there was freedom of expression and collaboration was encouraged. Outside of class, faculty were always available
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by phone or email, and were happy to answer any ‘silly’ questions that I had. Post MBA, the Millsaps faculty have remained available to me to help in real-life situations. They have become lifelong friends and colleagues in our own individual world of business. One of the highlights of my Millsaps experience has been exposure to peers and colleagues from all industries. I’ve been able to witness business perspectives from engineers, lawyers, scientists, government workers, and others in the healthcare industry. Their input, along with mine, made the programme outstanding in its depth and broad exposure. The intellectual insights I have gained from the programme have been astounding. I have one of the largest gastroenterology practices in the south-eastern region, with over 350 employees and a massive system of ancillaries. The most obvious benefit has been an education that has allowed me to understand every facet of a practice that I’ve been in for over 20 years. From dealing with disruptive employee situations, to selling business, to owning real estate, to negotiating even simple things in my everyday life - it’s been eye-opening. There is no monetary value that replaces intellectual understanding. At a regional level, my input into business endeavors has been greatly appreciated, and the practice has benefited in numerous ways. In addition to proffering suggestions that make those in leadership positions feel more comfortable, I have been able to support business decisions with hard evidence. I would hope that my input has allowed for cost savings and better analysis of business decisions. On a personal level, my business investments have been more pristine and I have been able to make decisions based not only on the views of an investment advisor, but also using the knowledge that I gained at Millsaps. Looking to the future, I have broadened my career choices, and I now view retirement as an opportunity for transition. The best advice I could give to any incoming MBA student is to set aside time daily to read your coursework. It’s very easy to say that you will get to it later, but the classes are fast-paced, so it’s important to have had adequate reading time before the class discussions. It rounds out the experience more than one could imagine. Prior to graduate school, my view of business was limited. I now respect business as a true science that is totally innovative, creative and exciting on multiple levels. It has made this time in my career one of the most exciting so far. Though I have somewhat mastered the art of medicine, I have intellectually grown to understand that ceo-mag.com / Spring/Summer 2018
medicine is only one piece of the puzzle. All disciplines go hand-in- hand with business. Would I undertake the Millsaps EMBA again? Yes, I’d do it a thousand times over! Dr Vonda Reeves Darby is a practicing gastroenterologist, and graduate of the Millsaps College EMBA.
DR SARA GLEESON
Q. What drew you to Millsaps College? I chose the Millsaps EMBA because I was looking for a classroom experience rather than an on-line experience. I wanted a highlyregarded programme with both regional and international recognition. There are several programmes within driving or short flying distance of my work and home, and Millsaps offered me the best value on all fronts. Q. With regards to the admissions process, what advice would you give to potential applicants? Millsaps really gets this right. There are numerous opportunities to attend information sessions. In my case, long before I was even certain that I would pursue an EMBA, I had the opportunity to participate in small, group conference calls, which allowed me to have important conversations with Millsaps’ staff and other potential candidates. I also took advantage of traditional meet-and-greet sessions, where I was able to share a meal and shake hands with professors and other candidates. Q. Can you expand upon the make-up (industries, geography etc.) and calibre of your fellow MBA participants and what they bring to the programme and your learning experience? My cohort is comprised of 18 individuals ranging from early-mid career to advanced career professionals. We are diverse in terms of age, race, sex, cultural background, educational credentials, spirituality, hobbies and family obligations. From an industry standpoint, we represent telecommunications, finance, environmental regulation, public employee retirement, engineering, medical technology, business education, human resources, motoring, energy resources, public utilities, psychiatry, the gaming and hospitality industry and law. ceo-mag.com / Spring/Summer 2018
Q. What do you consider to be the highlight of the programme thus far? The quality of the professors and their rigorous expectations, and the relationships I have built with my classmates. Q. What is the hardest thing about the programme? The many hours spent on research, writing, and problem-solving are a challenge, but anyone pursuing an EMBA can expect that. The biggest challenge for me has been thinking outside of my own profession and industry. This is what makes an EMBA such a broadening experience.
“I now respect business as a true science that is totally innovative, creative and exciting on multiple levels.”
Q. What has been the most challenging thing about returning to education, and what mechanisms have you put in place to manage the increased workload? Before starting the EMBA, I had frank discussions with my spouse, children and workplace. I needed buy-in from these essential partners, and I am fortunate to have their full support. I also considered the impact of a 17-month programme on my friendships and professional and community obligations. I revealed my educational plans to relevant parties and explained that I would be less available during the coming year-and-a-half. The reception has been supportive. Q. Are there unique elements of the programme that you feel will enhance your career objectives? Although I am still on the programme, the EMBA education has already enhanced my abilities in administrative and committee work. After graduation, I anticipate formal opportunities for advancement in leadership. Q. Has the programme met/exceeded your expectations? It’s exceeded them. It has been rejuvenating, both from intellectual and social perspectives. I should be tired from all the work, but I feel more inspired in my profession than ever before! Q. How would you summarise your MBA experience at Millsaps to date? Millsaps College offers a high-quality, in-classroom education, combing the best of regional and international perspectives. If you are lucky enough to have a similar programme to this within reasonable travel distance, take advantage of it! Dr Sara Gleeson is a psychiatrist and associate professor in the Department of Psychiatry and Human Behavior in the School of Medicine at the University of MS Medical Center.
PROFILE
Based in Jackson Missouri, the Else School of Management EMBA programme at Millsaps College offers mid-career executives an opportunity to earn an MBA without having to put their careers on hold. 55
THE FOUR PILLARS OF ACCELERATING LEADERSHIP DEVELOPMENT
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DR INES WICHERT
eaders move fast. We have known for a long time that those who move all the way to the top move faster than their peers. For large, international organisations, the average time taken to develop an employee from graduate to C-Suite is 20 years and from graduate to senior executive level is 12 years. With the right conditions in place, the move to the top can be reduced by 25-30%. This means that moving to C-suite in a large organisation may only take 14 or 15 years. This is achieved by ensuring that executives stay in role for an optimum length of time as they progress up the career ladder. At junior level the ideal tenure in a role is 12-18 months, at mid-management level two to three years and at senior management level, three to five years. In mid-management roles, the first year is spent learning about the new role, the second is spent taking decisions and delivering results and the third year allows the accelerated leaders to experience the impact of the decisions they have taken in the preceding two years and to consolidate their learning before moving on. These numbers are lower for junior roles and higher for senior roles due to their level of complexity.
Acceleration is further enabled by four key pillars of accelerated leadership development: ● Selecting candidates with the right raw material, such as learning agility and drive ● Access to the right roles ● Access to an effective support infrastructure ● Being spotted and fostered as talent early on The Right Raw Material To progress at an accelerated rate, highpotential employees must show their potential to move to more senior roles. At its most fundamental level, potential is about being ready to take on new challenges, learning from these challenges and then actively applying this learning to new situations. Furthermore, each significant job transition, for example from being an individual contributor to a team leader, or from being a functional leader to a business leader poses 56
new, unique challenges which the emerging leader must be ready for. Organisations must assess an emerging leader’s ability to learn quickly and regularly reassess that the person is still the right candidate for further acceleration. These regular check-ins also enable managers or HR professionals to spot early warning signs of derailers - such as burnout or incomplete learning - that must be addressed before it is too late. Access to the Right Roles High-potential employees need access to a breadth of different experiences. The most common experiences that help to hone leadership skills are international assignments, large-scale change management roles, developing or setting up something from scratch (e.g. a new product, team or manufacturing facility), managing people, operational roles, profit and loss responsibility and turnaround roles. It is the change in responsibilities, work environment and ways of working that take us out of our comfort zone and help us develop. Accelerated leadership happens on the job; it is not achieved through classroom training. Stretch assignments, special projects and job rotations must become an integral part of any succession programme. This requires a shift from organising content for structured learning to developing effective processes and policies that support regular role changes and cross-company moves. Furthermore, managers must be prepared to let talented individuals move to other business units or functions. High-potential employees can only progress at increased speed if they manage to pick up the necessary breadth of experience as efficiently as possible. Access to an Effective Support Infrastructure Acceleration brings with it increased risks of personal burnout or costly business mistakes where the accelerated leader either becomes overwhelmed by the continually high demands of moving at pace or makes a wrong business decision. Access to regular review meetings with ceo-mag.com / Spring/Summer 2018
HR professionals, mentors or managers can greatly reduce the risks of burnout and derailment and help emerging leaders transition successfully to new challenges. When we put in place support systems, we must not only focus on who is available to provide support but also what types of support are provided. Accelerated leaders need access to: ● Information and contacts to help them get up to speed fast in new roles ● Practical help, particularly in situations such as international relocations ● Feedback about their performance and a clear understanding of their strengths and development areas. Feedback support can be further strengthened by encouraging and supporting an accelerated leader through reflective learning. ● Emotional support to help boost resilience and shield against burnout. Resilience can be further supported by actively building consolidation phases into the accelerated leader’s career journey. Reflective Learning Reflective learning is about stepping back and reviewing how a situation went, what we learned from it and how it may have changed the way we see the world. It’s not the situation itself but the learning we take from it that develops us. It’s a powerful activity but doesn’t always sit well with our actionfocused world. Organisations that manage to instil a culture of reflective learning greatly support their high-potential leaders in their career journey. Consolidation Phases It may sound paradoxical to talk about consolidation in a framework about accelerated development, however, to counteract the dangers of burnout and derailment, we must ensure that highpotential employees are not sent from one stretch assignment to the next. They need periods of consolidation to make sense of all the learning. While consolidation and taking a step back may seem the easiest part of an accelerated leadership development approach, it can often represent a weakness for organisations as it can run counter to an ambitious individual’s and the organisation’s definition of talent. We must also ensure that all support is equally available to all accelerated leaders to guarantee that we are inclusive and that fostering diversity in our leadership development pipeline. Being Spotted and Fostered as Talent Early On There is anecdotal evidence that highceo-mag.com / Spring/Summer 2018
potential employees completing a rotation programme involving cross-functional and international moves early on in their careers move faster than their peers, even after the programme. Reasons for this may be the acquisition of an organisation-wide view, global contacts, and a willingness to try unfamiliar roles in the future, after having learned that most roles can be tackled successfully by using transferrable skills. Furthermore, starting acceleration early also means that the high-potential employee can show right from the start that they can be entrusted with stretching roles. Accelerated leadership development requires that organisations take risks by placing candidates into challenging new roles which may represent a big step up for the individual. Starting early allows us to see potential in action and how a person reacts to these situations. Early stretch assignments represent a smaller risk for organisations as the fallout from any failure is much smaller. And once a young employee has proven themselves in an early stretch assignment, we are more likely to give the person a stretch assignment again in future, setting them on a track of accelerated development.
“Organisations must assess an emerging leader’s ability to learn quickly and regularly reassess that the person is still the right candidate for further acceleration.”
BIOGRAPHY
Dr. Ines Wichert is a business psychologist and the Managing Director of TalUpp, the leadership development consultancy. Ines has a PhD in Organisational Psychology from the University of Cambridge and regularly writes and speaks on the topic of leadership development. She is the author of Accelerated Leadership Development: How to Turn your Top Talent into Leaders which is out now, published by Kogan Page. For more information, please visit www.ineswichert.com 57
HOW TO GET A COMPANY OFF THE GROUND
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WAV E R LY D E U T S C H
n his 2011 book, The Lean Startup, entrepreneur Eric Ries outlined a process for creating a new venture. His wasn’t the first methodology ever published, but it caught fire and became a worldwide movement. Ries’s book, with its vocabulary of experimentation, minimum viable product (MVP), and pivots, defined something that entrepreneurship educators, practitioners, and investors were trying to codify: what makes a successful start-up. Ries was joined by his former investor and University of California at Berkeley professor Steve Blank, creator of the customer-development methodology defined in another book, The Four Steps to the Epiphany. Blank engaged with Swiss academic Alex Osterwalder, whose Business Model Canvas template offered entrepreneurs a way of thinking beyond just the launch of their product into the operations of a company that could bring the product to market. The Lean Startup movement continued to pull in thought leaders in areas of user experience and startup finance. Now it is a full curriculum taught all over the world by consultants, colleges, entrepreneurship incubators, and even government agencies. Launching a new venture is incredibly difficult. Entrepreneurs
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must take a concept from an idea through building a product or service to engaging customers, recruiting a full team, establishing processes, and scaling operations in order to become a profitable, self-sustaining company. What Lean Startup does for entrepreneurs is help them begin the process by telling them exactly what to do—how to learn about their market and customers, how to develop and test a product or service offering, and how to iteratively refine it to find product-market fit. The methodology defines success in the earliest stages of building a new venture. But it has led many entrepreneurs to believe that having an MVP and a handful of customers equates to having a viable business. Not so. It takes a lot more. Creating a company is like getting a jet airplane off the ground. The start-up phase so clearly articulated by Lean Startup is merely the plane’s systems check and taxi out of the gate. As the plane begins to accelerate down the runway, it must build enough traction and momentum to overcome gravity and lift off from the earth. Only then can it speed toward the sky. The same is true for young companies. VC company Wildcat Venture Partners, started in 2015 by successful
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investors and entrepreneurs, is defining that next stage of company building—the sprint down the runway—the way Ries and Blank defined the start-up stage. They call it the Traction Gap. Their methodology provides a framework and set of metrics entrepreneurs can use to determine whether they are ready and eligible for venture funding, which would allow them to successfully hit the accelerator and enter a period of high growth. What is unique and especially useful about the Traction Gap model is that, like Lean Startup, it is prescriptive—it gives entrepreneurs detailed specifics about what to prioritize, where to apply resources, and what metrics to look at to determine success. It is also data driven. Googling “entrepreneurial success metrics” produces more than 1.5 million results, with articles such as “7 Metrics All Entrepreneurs Must Track” and infographics offering “34 Startup Metrics that Tech Entrepreneurs Need to Know.” Clicking into these myriad references yields metrics that include burn rate, recurring monthly revenue, lifetime customer value, customer acquisition cost, churn, virality, and net promoter score. What doesn’t show up is meaningful information that tells entrepreneurs what these metrics should look like at any particular point in their business development. Part of the problem is that each business’s path will be different, and there is no exact number for any one of the metrics that guarantees success or indicates certain failure. Additionally, the metrics and timing for reaching certain milestones will change based on the business model the company is pursuing. For a business-to-business softwareas-a-service (B2B SaaS) company, monthly recurring revenue is a key indicator early on. These are companies such as Salesforce, Slack, or Zendesk—B2B companies that run software from
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the cloud rather than from their own internal servers. However, for a social network or mobile app company, virality—how often your customers recruit new users for you, effectively reducing the cost of customer acquisition of those new users to zero— will be critical. With the Traction Gap framework, Wildcat is seeking to provide entrepreneurs with a playbook for executing in the post– start-up, early-growth phase, as well as data from successful companies on what metrics indicate you have reached critical inflection points. Defining the go-to-market phase Wildcat’s founding team of Bruce Cleveland, Bill Ericson, Bryan Stolle, and Katherine Barr came together not just with extensive expertise in venture investment but—more importantly, according to Cleveland—with operating experience. Cleveland himself was an early employee at Oracle and on the founding team of Siebel Systems. Stolle created and built Agile Software. Collectively, the team has invested in dozens of companies that have been acquired or had IPOs, including Marketo, Rocket Fuel, Coupa, and Workday. As a new venture firm, Wildcat wanted a strong investment thesis and a process for working with early-stage companies that would differentiate it from all the other seed and Series A investors. It also wanted to provide its limited partners—the people and organizations Wildcat gets its funding from—best-in-class returns. During their positioning brainstorming, Cleveland introduced an idea he had been working on at his prior firm. He called it the Traction Gap. The Wildcat team jumped on the concept and worked to fully develop it into a complete framework. Cleveland describes a problem Wildcat was having: it was meeting
“Too often entrepreneurs cling to companies that have fatal flaws in their business models, value propositions, or execution— throwing good money after bad only to see the same problems year after year.”
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tons of founders who were great product people and seeing 40-page slide decks in which 38 slides were devoted to product architecture, technology stacks, and total market size. Slide 39 would show the classic hockey-stick sales curve leading to tens if not hundreds of millions in anticipated revenue, and Slide 40 would be the ask—for $4 million, $5 million, or $7 million to get the team to the promised land. Cleveland would ask them: “What is this miracle that occurs between product launch and $100 million in revenue?” He discovered that while all teams had spent considerable time on their product, few had invested significant time developing detailed plans regarding the customer-acquisition process, marketing tactics, and sales cycles and metrics. That’s when Wildcat decided to codify the go-to-market phase of company development. If Lean Startup represents the go-to-product stage, and Geoffrey Moore’s 1991 book Crossing the Chasm is the roadmap for becoming a really big company (or the go-to-scale phase of development), what was missing was a methodology for the goto-market period—building traction with early customers and developing a repeatable revenue-generation process that leads to profitability. Building on Lean Startup’s vocabulary, Wildcat’s Traction Gap defines two key inflection points: minimum viable repeatability (MVR) and minimum viable traction (MVT). MVR indicates that a company has demonstrated a repeatable process for acquiring customers. It has learned enough about go-to-market that its product positioning and marketing messages are clear to prospective customers. It has reference customers (who will tell others that a product works as claimed), and it understands something of its sales process, and response metrics and conversion-rate metrics. Additionally, while Traction Gap’s methodology focuses on marketing and sales, it also defines what the company has to do in other areas. So MVR also demonstrates that a company can execute a product development and launch sequence and successfully implement its solution with customers, repeatedly. The airplane is gathering momentum down the runway. MVT indicates liftoff. This occurs when the company achieves steady quarter-overquarter growth for 12 to 18 months, during which time it has collected data, improved
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its processes, and become more efficient. It has survived the Traction Gap and is set to scale up—by expanding to new markets and introducing new offerings. What makes the Traction Gap framework so useful to entrepreneurs is that it is actionable—it defines the areas of business operations that founders must focus on and develop competencies in. The four pillars that need to be strengthened in order to get to MVT are product, revenue, team, and systems. Today, the Traction Gap Institute, affiliated with Wildcat, offers guidance for how to advance in each area. Through blog posts, videos, workshops, and engagements with expert consulting partners, it outlines, for example, how to know when a company has gotten too large for QuickBooks and needs a more robust accounting system, when to hire a CFO, or how to effectively engage with a board of directors. Reverse engineering the milestone data An airplane needs sufficient speed for the wings to generate enough lift to get the plane off the ground. The exact speed and thrust required varies based on the length of the runway, weight of the aircraft, configuration of the aircraft’s flaps, and headwinds. So too, businesses with varied models and markets will use different metrics to identify their MVR and MVT inflection points. While engineering and mathematics have allowed scientists to calculate these numbers for airplane pilots, there is less information available to the entrepreneur to assess progress. Again, relying on its team’s core expertise, Wildcat parsed data from the S-1 filings of 60 public companies, and from private companies the team had been involved with, to see what numbers successful B2B SaaS companies achieve, and when they reach their MVR and MVT milestones. The data indicate that the time from start-up to first product launch averages 12–18 months. At that point, companies begin receiving feedback from customers and using that to improve their products. This process, which typically takes an additional six months, can involve several rounds, until companies achieve an MVP they feel indicates they are ready to launch their product to a broader public market. Moving from MVP to MVR, or from $0 to $2 million in annual recurring revenue, takes another 18 months. Then, over the next 12–18 months, successful SaaS companies achieve steady quarter-over-quarter growth and reach the
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MVT inflection point, of $6 million in annual revenue or $500,000 of monthly recurring revenue. These numbers can help SaaS entrepreneurs establish milestones and timelines to help them do two things: decide whether their business is working and understand how venture investors will evaluate them. Hopefully, data like these can also help entrepreneurs create no-go metrics—numbers below which they will realize that their businesses don’t work. In a previous essay based on analysis of the Kauffman Firm Study data set, I wrote that if a company doesn’t learn how to sell in its first two to three years, it will very likely never do so. Wildcat’s model reinforces this timeline. Too often entrepreneurs cling to companies that have fatal flaws in their business models, value propositions, or execution—throwing good money after bad only to see the same problems year after year. Wildcat’s milestones also support, with a broader base of data, the trajectory that Battery Ventures, a well-known
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VC firm, identified in its “triple, triple, double, double, double” model for B2B SaaS companies, or T2D3 for short. That model shows SaaS companies first getting to $2 million in topline revenue, in the next two years tripling to $6 million then again to $18 million, then over the next three years doubling three times to $36 million, $72 million, and $144 million. This growth rate puts both a billion-dollar valuation and potential IPO in sight. Will the Traction Gap Institute become the next Lean Startup movement? The Traction Gap project is in its earliest phase—really just a start-up itself. The Traction Gap Institute was launched in 2016 but already boasts more than 500 member companies. The first version of both the data and tools comes largely from its creators’ experiences in starting, scaling, and investing in B2B SaaS companies. To be broadly applicable and truly useful to entrepreneurs worldwide, it needs to mature. The Institute needs to collect and share similar data for other high-growth business models, including B2C apps, e-commerce, companies that offer physical rather than virtual products, retail ventures, and services models. The actionable tools being built around the framework of product, revenue, team, and systems—providing guidance about when to invest in specific kinds of software, or who to hire, and so forth—need to be extended and widely published. (Cleveland promises a Traction Gap book in the not-too-distant future.) But the Traction Gap is already drawing thought leaders such as Crossing the Chasm’s Moore, expert on scaling technology companies, and John Baird, one of the premiere executive coaches in Silicon Valley, to contribute to the intellectual capital of the initiative. And even in its current stage of development, the Traction Gap Institute can be a resource for entrepreneurs as they transition from creating that perfect product to generating sustainable revenue—by helping them identify the critical inflection points for their businesses, demonstrating a methodology of research and modeling to set milestone goals, and focusing them on building their go-to-market engines using the four pillars of product, revenue, team, and systems. As Cleveland puts it, “There needs to be as much attention to the revenue architecture as there is on your product architecture—and most teams don’t do it.”
“With the Traction Gap framework, Wildcat is seeking to provide entrepreneurs with a playbook for executing in the post–start-up, early-growth phase, as well as data from successful companies on what metrics indicate you have reached critical inflection points.”
ACKNOWLEDGEMENT Courtesy of the Chicago Booth Review. BIOGRAPHY Waverly Deutsch is clinical professor and academic director of university-wide entrepreneurship content at Chicago Booth.
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LIFE IN START-UP NATION: TWO YOUNG FRENCH ENTREPRENEURS SPEAK OUT J A M E S C O S TA N T I N I A N D DAW N J A R I C H
In a frantic-paced start-up scene, the primary challenge is building and managing talented teams.
“Rather than petitioning potential investors, the pair say their obsession revolves around attracting, retaining and motivating talent.”
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ny doubts about the seriousness of France’s bid to become Europe’s innovation capital were likely put to rest with last year’s opening of Station F, which bills itself as the world’s largest start-up campus. The 34,000-squaremetre facility in the centre of Paris includes desk space for 1,000 start-ups, eight event spaces, and a 24-hour “chill zone” open to the public. Facebook, Google and Amazon have established a presence there. President Emmanuel Macron has been outspoken about his aims to use innovation and entrepreneurship to jolt new life into the French economy. But the push to refashion France as a “start-up nation” began well before the current president assumed office. In 2012, then-President François Hollande launched BPI France, a public investment bank that poured €8 billion into French start-ups in its first five years. The cumulative result has been a redirection of French youth’s career ambitions: According to a 2017 survey, 60 percent of the nation’s under-30s fancied themselves potential start-up founders. INSEAD, in collaboration with Sorbonne Université, offers the Business Foundations Certificate (BFC) Programme to teach budding entrepreneurs of all backgrounds the business skills they’ll need to ride the French start-up wave. At a recent event for BFC programme alumni and prospective students, we heard from two young founders who have successfully made the journey from concept to fully funded venture. Their case histories and reflections on their
experiences so far give a sense of the state of play within the country’s exploding start-up scene. Scortex Aymeric de Pontbriand, co-founder and CEO of Scortex, says his company occupies a unique niche – developing hardware for AI. With a master’s in physics from the Sorbonne (and a BFC), he observed that despite great advancements made in manufacturing automation, quality control was still being done the expensive, old-fashioned way. De Pontbriand reckoned he could develop AI and machine learning solutions for detecting defective products as they rolled off the assembly line, thereby reducing companies’ need to retain human inspectors. Scortex’s main hardware is based around an industrial processing chip hooked up to industrial cameras. The machine learning component kicks in as the cameras capture more and more images, and the company’s software develops and refines its own protocols for spotting botched merchandise. With all data uploaded to the cloud, Scortex’s algorithms get stronger the more they are used in a given environment. The value of Scortex’s product was undeniable. Its first customer, a paint shop QC department in an automotive plant, was able to streamline from five inspectors per shift to only one after integrating the technology. Yet the company faced headwinds on its growth journey. The slow sales cycle of manufacturing kept its growth path gradual. Many potential clients were excited by the ceo-mag.com / Spring/Summer 2018
possibilities but were not yet technologically advanced enough to capitalise on them. All the while, competition in the space was heating up – culminating last year in IBM’s launch of its own AI-driven “cognitive assistant” for automating quality control. PopChef For start-up founders the world over, growth is often far from linear. But the fastevolving French start-up ecosystem can be a real roller-coaster ride. François Raynaud de Fitte, co-founder of PopChef, can testify to that. PopChef launched in January 2015 with a simple concept: Disrupt lunch by delivering fresh, healthy meals straight to the office, making long waits at crowded neighbourhood bistros a thing of the past. After coming up with the basic idea, de Fitte was so eager to get it to market ahead of the competition that he jumped in before developing a website or app. Collaborating with a restaurant in Paris, he initially sold lunches in branded PopChef packaging over Twitter. As the first local entrant in the lunch delivery space, PopChef quickly found seed funding from angel investors and an expanding customer base. It used data analysis to forecast customer demand, with a proprietary algorithm which optimised delivery by calculating the shortest distance between the hub and the customer. But making the model work without sacrificing food quality, delivery efficiency or affordability proved challenging. And when competing food companies (both foreign and domestic) came on the scene, discounts and expensive advertisements became more prevalent, forcing the start-up to fight for customers. Popchef reset its core mission from technology to food and branding, and grew its customer base, delivering its 100,000th meal in Q1 2017. Yet, despite having raised substantial investments, including €2 million investment from leading commercial caterer Elior Group, the ever-increasing cash burn brought the company near the brink of ruin. Finally, de Fitte had no option but to start over “as if from day one”, letting go of two-thirds of his staff as part of a deep cost-reduction scheme and focusing on an attractive niche market. As Q1 2018 drew to a close, PopChef was enjoying continued monthly growth, and de Fitte says the company should reach profitability before the end of the year. The employees who were let go at PopChef’s lowest ebb are in the process of being rehired. Life in the “start-up nation” De Fitte and de Pontbriand believe that ceo-mag.com / Spring/Summer 2018
this is an especially exciting moment to be an entrepreneur in Paris, but caution against getting caught up in the hype. “Some people want to win every single prize and not focus on customers,” de Pontbriand says, “Go out and talk to customers and find out what you’re doing wrong.” The pair also urge founders to look beyond their home nation. They point out that Israel’s success as a start-up hub partly stems from the lack of a local market, which obliges founders to adopt an international mind-set from the beginning. “Start thinking at least European,” says de Pontbriand. “It’s not that hard. Going to London or Berlin is sometimes easier than reaching other French cities.” Talent as a key resource The entrepreneurs are surprisingly nonchalant about the vital issue of funding. The money will flow naturally if you have a great product, they imply. Plus, news travels fast in the close-knit start-up world in Paris. Once the first investor is on board, others will get wind of it and want in too. Rather than petitioning potential investors, the pair say their obsession revolves around attracting, retaining and motivating talent. De Fitte says his burning questions are, “How do you hire people who are smarter than you, and convince them to work for someone not as smart as they are?” As a result, he spends 30 percent of his day focused on talent, much of it on LinkedIn, scouting for and communicating with possible hires. Culture can be the glue that keeps talents bonded to their employers. PopChef very consciously sets itself apart from conventional French companies, trying to inculcate a founder-like passion in each team member. For example, employees can make their own hours and are even granted unlimited holidays, provided work is done on time. “It’s about trust,” says de Fitte. “If you trust your employees, they’re not going to do crazy things.” Of course, more tangible compensation is always a pillar of talent retention. One of the vaunted advantages of France as a labour market for innovation is that its engineers, developers and other professionals command more reasonable salaries than equivalent talents in the United States and elsewhere. Yet the entrepreneurs stress that you have to pay people competitively if you want them to work hard and stay at your company. PopChef grants all employees stock totalling 15 percent ownership in the company. De Pontbriand concurs, recommending team-building exercises, but above all “ownership is the best way to engage your team.”
“Any doubts about the seriousness of France’s bid to become Europe’s innovation capital were likely put to rest with last year’s opening of Station F, which bills itself as the world’s largest start-up campus.”
ACKNOWLEDGEMENT
Courtesy of INSEAD Knowledge. BIOGRAPHIES James Costantini is an Affiliate Professor of Strategy at INSEAD. He is also Programme Director of the Business Foundations Certificate Programme. Dawn Jarich is a Resarch Associate at INSEAD. 63
n EU Business School n University of Exeter
n Bain & Co. n Chris Brahm
n Sara Gleason n David Goodwin
n University of Chicago (Booth) n James Costantini n Mark Crowley n Vonda Reeves-Darby n Waverly Deutsch
n IMD n INSEAD n ISEG
n Enase Okonedo
n Millsaps College n University of Pennsylvania (Wharton) n Ian Proctor
n Stuart Hart
IST OF CONTRIBUTORS
n Dawn Jarich n David Jones n George Kohlrieser
n University of Sheffield
n Lagos Business School n Larry Leifer n Michael Lewrick n Patrick Link
n Georg Wernicke n Ines Wichert
n José Veríssimo n University of Vermont
n RMIT
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ceo-mag.com / Spring/Summer 2018
THE EXETER MBA
Sch o ava larsh ilab ips le
At Exeter we offer a fully accredited, academically rigorous and practical MBA from a top Russell Group University focusing on leadership, technology, and sustainability. n Co-delivered and supported by FTSE 100 companies and other progressive corporate partners n Profound personal and professional development to accelerate your career or explore new directions n Awarded Gold by the Teaching Excellence Framework n Career development, collaboration and learning opportunities from an expanding alumni network spanning more than 80 countries n Ranked best in the world for sustainability and business practice
The emphasis on sustainable business practices ensured my business knowledge was not only up-to-date, but also future-proofed. The consulting project represented the perfect confluence of academic study and ‘real world’ application, which has subsequently helped me to relaunch my career.
Through the MBA’s focus on emerging business models I’ve been able to appreciate how technology and new business models can contribute to a more sustainable world. My experience with blockchain, big data and artificial intelligence has opened many doors.
Diane Hayman (MBA 2014), Marketing Manager, Hawksmoor Investment Management
Stephanie Lindan (MBA 2016), Management Consulting Manager, Accenture
ceomag.co.uk / Spring 2016
Business School Rankings 2016
3
2017BS504
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— 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
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