GF Vol 04 Issue 03

www.efmd.org

Volume 04 | Issue 03 2010

EFMD Global Focus

EFMD aisbl

Rue Gachard 88 – Box 3 1050 Brussels, Belgium

Ashridge’s Kai Peters worries about where business schools are going

Volume 04 | Issue 03 2010

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

Email: info@efmd.org

DEAN BERNARD RAMANANTSOA, HEC BUSINESS SCHOOL, PARIS

The path ahead

Dean Bernard Ramanantsoa on selecting quality student applicants: “HEC Paris has always placed selectivity at the forefront of its mission.

High selectivity means high quality for an institution where graduate management education rhymes with leadership, integrity, fortitude and effectiveness. The GMAT is the perfect tool to help HEC Paris achieve this mission. We select MBA candidates from more than 70 countries for whom the GMAT creates a fair and balanced measure of potential achievement and success in our MBA programme.

Combined with interviews and a detailed analysis of the candidate’s achievements, the GMAT offers a means of both effective selection and solid prediction of success in academic courses.

Ranked #1 Business School in Europe for four consecutive years by the Financial Times Global Ranking, HEC Paris is proud of using the GMAT for its MBA programme.”

To learn more about the GMAT exam and the products and services it makes possible, visit gmac.com/efmd

INSIDE THIS ISSUE

GMAT® is a registered trademark of the Graduate Management Admission Council (GMAC), the leading advocate and resource for quality graduate schools of business, worldwide.

GMAC_EFMD_Ramanantsoa_Ad_200mmx265mm_v2.indd 1

8/24/10 2:22 PM

Deans that lead How business school deans can learn to lead

GDF SUEZ A top corporate university in a decade of change

MENA Education in the Middle East and North Africa

Worldly leaders West is not always best says UK’s Leadership Trust

Brave new world Ideas for producing leaders for a changed world

Sexy accountants?

Yes, it could be true. But is it a good idea?

Written by Jonathan T. Scott Reviewed by Walter R. Stahel, Hunter Lovins and David Grayson

The Sustainable Business Taking the first steps toward understanding, implementing and managing sustainability from a cost/profit perspective.

5IF &NFSBME &'.%

0VUTUBOEJOH %PDUPSBM 3FTFBSDI "XBSET *OUFSOBUJPOBM SFDPHOJUJPO BOE DBTI BXBSET GPS UIF CFTU EPDUPSBM SFTFBSDI

&'.% BOE &NFSBME TFFL UP DFMFCSBUF FYDFMMFODF JO SFTFBSDI CZ TQPOTPSJOH UIF 0VUTUBOEJOH %PDUPSBM 3FTFBSDI "XBSET "XBSE XJOOJOH FOUSJFT XJMM SFDFJWF B DBTI QSJ[F PG $ PS DVSSFODZ FRVJWBMFOU B DFSUJmDBUF B XJOOFSTh MPHP UP BUUBDI UP DPSSFTQPOEFODF BOE UIF QSPTQFDU PG BO PGGFS PG QVCMJDBUJPO JO UIF TQPOTPSJOH KPVSOBM o FJUIFS BT B GVMM QBQFS PS BO FYFDVUJWF TVNNBSZ o BU UIF EJTDSFUJPO PG UIF &EJUPS T *O BEEJUJPO B OVNCFS PG )JHIMZ $PNNFOEFE "XBSET XJMM CF CFTUPXFE 5IJT ZFBS UIFSF BSF DBUFHPSJFT

A critically acclaimed book designed to strengthen the world’s business communities.

Real wealth (not boom and bust), job security, higher wages, an increase in the quality of life – all of these are within reach according to a new guide that explains how long-term, sustainable business practices both save and make money.

Published by the EFMD, the book is designed to help businesses generate long-term profits, create jobs, and optimise resources.

The Sustainable Business can be downloaded free from the EFMD website: www.efmd.org Printed soft-bound copies of the book can be ordered (at-cost) from: www.lulu.com Further information: Matthew Wood Director of Communications, EFMD: matthew.wood@efmd.org Jonathan T. Scott: jonathan_t_scott@hotmail.com

&EVDBUJPOBM MFBEFSTIJQ BOE TUSBUFHZ $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG &EVDBUJPOBM "ENJOJTUSBUJPO

.BOBHFNFOU BOE HPWFSOBODF $BUFHPSZ TQPOTPSFE CZ .BOBHFNFOU %FDJTJPO

)PTQJUBMJUZ NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ *OUFSOBUJPOBM +PVSOBM PG $POUFNQPSBSZ )PTQJUBMJUZ .BOBHFNFOU

.BSLFUJOH SFTFBSDI $BUFHPSZ TQPOTPSFE CZ &VSPQFBO +PVSOBM PG .BSLFUJOH

)VNBO SFTPVSDF NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ 1FSTPOOFM 3FWJFX *OGPSNBUJPO TDJFODF $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG %PDVNFOUBUJPO *OUFSEJTDJQMJOBSZ BDDPVOUJOH SFTFBSDI $BUFHPSZ TQPOTPSFE CZ "DDPVOUJOH "VEJUJOH "DDPVOUBCJMJUZ +PVSOBM ,OPXMFEHF NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG ,OPXMFEHF .BOBHFNFOU -FBEFSTIJQ BOE PSHBOJ[BUJPO EFWFMPQNFOU $BUFHPSZ TQPOTPSFE CZ -FBEFSTIJQ 0SHBOJ[BUJPO %FWFMPQNFOU +PVSOBM -PHJTUJDT BOE TVQQMZ DIBJO NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ *OUFSOBUJPOBM +PVSOBM PG 1IZTJDBM %JTUSJCVUJPO -PHJTUJDT .BOBHFNFOU

0QFSBUJPOT BOE QSPEVDUJPO NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ *OUFSOBUJPOBM +PVSOBM PG 0QFSBUJPOT 1SPEVDUJPO .BOBHFNFOU 1SPQFSUZ JOWFTUNFOU BOE mOBODF $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG 1SPQFSUZ *OWFTUNFOU BOE 'JOBODF 'PS GVMM EFUBJMT QMFBTF WJTJU XXX FGNE PSH BXBSET PS XXX FNFSBMEJOTJHIU DPN BXBSET PS DPOUBDU .BUUIFX 8PPE NBUUIFX XPPE!FGNE PSH PS %FWPO #MBLF ECMBLF! FNFSBMEJOTJHIU DPN

1 EFMD Global Focus | Volume 04 | Issue 03 2010

Volume 04 | Issue 03 2010

In focus This issue of Global Focus stresses two distinct but interlinked themes: the current state of business schools as businesses; and the challenges of producing a new generation of business leaders.

In typical forthright form, Kai Peters, chief executive of Ashridge Management College in Britain (page 8), argues the case that the current business model for business schools is not sustainable and could be particularly damaging to their contribution to executive education (a key area in producing business leaders).

“I think the debate that has to happen in business schools is really around how much teaching is realistic from faculty – and it surely has to be more than we are doing now because it’s just not financeable,” he says. “You can’t run a business school without a business model but we seem to be trying.”

On page 14, Fernando Fragueiro and Howard Thomas (respectively of IAE Business School in Argentina and Lee Kong Chiang School of Business is Singapore) take this issue further, specifically addressing the question of how business schools deans can lead their organisations forward in what they describe as an era of persistent and emerging challenges and global and local tensions.

One way that business schools may address these challenges in the future is through rationalisation – merging with or acquiring each other. Many an academics may react with horror but Michel Kalika, Dean of EM Strasbourg Business School in France, gives a practical and pragmatic account (page 34) of how his institution emerged successfully from a complex merger.

Equally practical is the interview on page 18 with Nadine Lemaitre, who has headed GDF SUEZ University (one of the world’s largest and successful corporate universities) since its inception a decade ago. It, too, has undergone many mergers and changes, though this time at the corporate rather than academic level, but has stuck to its original mission of preparing an integrated cadre of leaders for a diverse and disparate corporation.

Leadership in a diverse world is also the subject of Sharon Turnbull’s article on page 38. This looks at what she calls “Worldly Leadership” – a search for meaningful approaches to sustainable leadership that draws not on traditional Western concepts but on Eastern collectivist philosophies and the wisdoms of indigenous cultures.

On page 44 Kenneth Mikkelsen outlines the kinds of challenges that business leaders are likely to face in the future, drawing on an EFMD/Mannazsponsored conference.

Finally, the supplement that accompanies this issue continues the theme of leadership and effective academic/company relationships. It highlights the winners of the EFMD Excellence in Practice Award 2010, a celebration of successful co-operation between business schools and the corporate world.

2 www.efmd.org/globalfocus

Volume 04 | Issue 03 2010

Contents Global Focus The EFMD Business Magazine

1 In focus

Executive Editor

4 Talking Shop

Matthew Wood matthew.wood@efmd.org Advisory Board

Eric Cornuel Jim Herbolich Howard Thomas Consultant Editor

George Bickerstaffe bickerstaffe@btinternet.com Contributing Editors

Fernando Fragueiro, Michel Kalika, Nadine Lemaitre, Kenneth Mikkelsen, Ken Moore, Sue Newell, Hanne Nørreklit, Tadao Onaka, Ananth Rao, Lindsay Ryan, Guido Stein, Howard Thomas, Sharon Turnbull Design & Art Direction

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

Jebens Design Ltd / EFMD unless otherwise stated

©

Editorial & Advertising

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

EFMD

Three new schools gain EQUIS accreditation Management Education for Tomorrow (MET) Fund Anna Pehar joins EFMD ecch Case Winners 2010

8 ‘As a business model, what we are doing right now is, for me, not sustainable’ Ashridge’s Kai Peters is worried about where business schools are going.

Interview by George Bickerstaffe

14 How can deans lead?

The current crisis means that business schools will have to change – and that means a new type of leadership from business schools deans. Fernando Fragueiro and Howard Thomas outline the kind of skills they will need

18 How GDF SUEZ channels leadership Nadine Lemaitre has headed GDF SUEZ University, one of the world’s leading corporate universities, for the past decade, a time of growth and change for the giant energy group. She talks to George Bickerstaffe

22 Managing People and Organisations: Peter Drucker's Legacy In this extract from his book Managing People and Organisations: Peter Drucker's Legacy, Guido Stein elucidates Drucker's thinking in a way that emphasises its relevance for today and tomorrow

26 The corporate education iceberg Looking at their corporate education and training, most organisations only see the tip of the iceberg, treating employee training and development as a functional activity and just another business expense. Lindsay Ryan believes there is more involved

30 The challenge of change Management education in the Middle East and North Africa faces many challenges. In the run-up to a major EFMD conference in this important region, Ananth Rao outlines some of the key issues

34 Looking beyond the West for leadership Leadership studies have been dominated in the past by a Western mindset.

Sharon Turnbull describes new research into non-Western leadership styles – Worldly Leadership –that could profoundly influence responsible and sustainable management and business practices

3 EFMD Global Focus | Volume 04 | Issue 03 2010

Contents

26

38 How to merge business schools Merging business schools is a complex and difficult business. Michel Kalika details one example of how it can be done successfully

44 Leadership at a crossroads The current economic and financial crisis has illustrated the increased complexity of the world and means that companies must re-assess their operational agility and explore new ways of coping with change. Kenneth Mikkelsen details some likely responses

48 HR and the new world business order

34

The world has changed and is changing even more. This is placing tremendous pressures on employees and the HR function needs to respond to help them. Ken Moore offers some suggestions on how it might do so

52 A doctoral programme for the 21st century Sue Newell describes a new doctoral programme that attempts to use the best of both American and European approaches

56 From dull and geeky to sexy and extreme?

The image of management accountants and controllers has undergone major change. Credibility, prudence and the obligation to ask questions have been replaced by initiative, drive and ‘full-speed ahead’, according to Hanne Nørreklit

44

60 Can the MBA survive?

Tadao Onaka believes that three dilemmas facing business schools and business graduates in Japan may threaten the future of the MBA degree

The world has changed and is changing even more. Ken Moore looks at what the HR function can do to assist employees page 48

4 www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop Three new schools gain EQUIS accreditation EFMD would like to congratulate warmly: Australian School of Business, University of New South Wales, Australia Indian Institute of Management, Bangalore (IIMB), India Nottingham University Business School, University of Nottingham, UK which have recently been awarded EQUIS accreditation. This takes the number of accredited schools to 128 across 35 countries.

EFMD launches new networking event for masters programmes Following various requests from our members, EFMD has launched a new annual networking event for the directors, staff and faculty of masters programmes.

The first edition will be held from 13-15 December 2010 in Colbat (Barcelona), Commenting on the accreditation Professor Leigh Drake, Director, Nottingham hosted by EADA, under the theme "The MSc University Business School, said: "We are delighted to join a select Lifecycle". The conference committee has put international group of the world's top business schools. To be awarded EQUIS together an exceptional programme that also accreditation for Nottingham University Business School in the UK, China includes numerous networking opportunities and Malaysia endorses and enhances our ambitious, multi-campus strategy throughout the event. and confirms the quality of our staff, students, programmes and facilities.

EQUIS sets very high standards and we are extremely proud to join this elite For further details visit: group as a truly international business school." www.efmd.org/conferences “We are delighted at IIMB to have received the EQUIS accreditation. It is indeed an honour to join a select group of schools globally. It has allowed us to review our processes in depth and will help us draw global attention to our programmes and the achievements of our faculty," added Professor Pankaj Chandra, Director, Indian Institute of Management, Bangalore.

Professor Alec Cameron, Dean of the Australian School of Business, said that gaining EQUIS accreditation placed the school in an exclusive group of the world's leading business schools. “The international peer review process for gaining EQUIS accreditation is rigorous and has involved two-and-a-half years of benchmarking the school against international best practice in terms of teaching programmes, students, intellectual output, corporate engagement, internationalisation and executive education. EQUIS will help us to build stronger research linkages with other EQUIS accredited schools and it will also enhance our brand in international markets, particularly in Europe and Asia."

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

Job opportunities across EFMD network EFMD has a job posting service that is free for all members and which is showcased on a six-weekly basis to over 16,000 contacts via the EFMD eNews service. So far during 2010 over 200 positions have been advertised with a number of successful candidates coming via the EFMD network.

For more information please visit: www.efmd.org/jobs or contact: matthew.wood@efmd.org

Management Education for Tomorrow (MET) Fund Created in 2008 with a $10 million commitment, the Management Education for Tomorrow (MET) Fund formalises and enhances the Graduate Management Admission Council's long-standing commitment to investing in strategic philanthropic initiatives that benefit business and management education globally.

The MET Fund Ideas to Innovation Challenge seeks to find the world’s best ideas for improving graduate management education and then to fund the top proposals, turning the best ideas into active innovation. Open to individuals worldwide, the challenge asks simply: What one idea would improve graduate management education?

The two-part challenge will award a total of $250,000 in prizes to 15 people, with the most promising proposal taking home $50,000.

Find out more by visiting: www.gmac.com or contacting: metfund@gmac.com.

5 EFMD Global Focus | Volume 04 | Issue 03 2010

Talking shop

EQUIS sets very high standards and we are extremely proud to join this elite group as a truly international business school Professor Leigh Drake, Director, Nottingham University Business School

GMAC European Conference Value rarely means cost – Revealing Your Uniqueness Value is the key that emerges from three new studies from CarringtonCrisp in partnership with EFMD – Executive Education Futures, The Business of Branding 24-25 October 2010, and GenerationWeb – but value means different things for different audiences.

Ashridge Business School, UK Executive education spend declined in many markets in 2009 but Executive Why does today’s business school applicant choose your MBA or masters in management programme over another school’s?

Today’s crowded graduate management education marketplace requires us to rethink our current advertising and branding strategies so that our audiences do not just hear about what we have to offer, they experience it.

Education Futures found that just under 60% of purchasers believe spending will grow in the next 24 months. Although total spend is important, corporate purchasers are focusing on value, often seeking to do more for less.

However, quality of teaching, fit with the provider and impact are also important in judging value. Many purchasers commented that finding a way to sustain the impact and measure the growth of an individual and benefit to the business of executive education would be useful.

With growing importance placed on tools such as social networking, the GenerationWeb study sought to understand how students use web tools.

Facebook dominates the market place although only 31% agree or strongly agree that “I search for information on social networking sites about schools”.

With increasing competition for candidates within and among business schools the third annual Graduate Management Admission Council (GMAC) European Conference examines the importance of communicating the right message to your candidates and other stakeholders so that it is clear, authentic and tells a story that captures the essence and uniqueness of your programme.

Although two-thirds of students use social networks several times a day or week, none of the sites appears to have established itself yet as a key tool for prospective students.

Join colleagues in business school admissions, marketing and communications together with other expert business school and industry speakers at the uniquely glorious Ashridge Business School on 24-25 October.

Looking at business school websites, students suggested that the quality of a site can have a considerable impact on their choice of where to study.

For more information please visit the conference website: www.gmac.com/europeanconference

Only 13% of students use Twitter to find out about business schools but Twitter may still be useful for schools to keep journalists informed, for internal communications or when contacting alumni. More students (up to 40%) use iTunesU to download information about business but only 12% have downloaded business school marketing materials. However, more than 70% of students use the main iTunes site to purchase music, TV or film.

The Business of Branding also revealed the growing importance of value, often measured in terms of career outcomes and alumni success. The study found a relationship between cost, quality, academic strength and brand reputation. The pattern of results suggests that where students perceive school costs as low but quality and academic standards as high they are more likely to state that their school has a strong clear brand that is widely recognised and understood.

Alumni can be powerful messengers in communicating the brand and value messages but want the relationship with their former school to have a clear purpose and defined benefits. While most alumni are likely to agree or strongly agree that “Alumni Relations are often in touch with me”, more than 50% disagree or strongly disagree that “I have got involved with activities for alumni” or “I have made good contacts through the alumni network”.

Each of the studies will run again in the next six months and schools interested in taking part should contact Matthew Wood at EFMD matthew.wood@efmd.org or Andrew Crisp at info@carringtoncrisp.com

6 www.efmd.org/globalfocus

News and events in brief from the business world

Talking shop 2nd Global Peter F Drucker Forum: Dubai to host EFMD's first Annual Conference in the Managing in the Next Society Middle East and North Africa 18-19 November 2010 Vienna (MENA) region The current crisis is accentuating and accelerating the transformation of our societies and our economies. The 2010 Forum will deal with the new challenges seen from the vantage point of management and will address key questions such as: Q. What will the Next Society be like? What does this mean for management?

Q. How to unleash the latent productive and creative energies of people in organisations? Will Information and Communication Technology (ICT) and new media finally fulfil their promise to enable and empower management and workers?

Hosted by the University of Dubai on November 28–30, 2010 with the theme: "Creating International Impact with Programmes – Management Education in the MENA Region" this conference is an ideal opportunity to learn about ongoing trends in management education inside and outside the MENA region.

The conference will discuss topics such as internationalising faculty and the study experience, establishing masters, executive education and doctoral programmes, and developing strategic partnerships with international business schools.

Presentations will include a series of speakers from the MENA Region, America and Europe with plenty of opportunities for networking and sharing within the EFMD community of schools.

Q. Do we have the management capabilities in our institutions and organisations to achieve a step change in innovation and value creation?

How to build the capacity in a more comprehensive and systemic way?

What can we learn from the emerging economies?

Q. How to manage deep transformation and change in our society without creating wide-spread disruption? Can our societies become more nimble and adaptive?

Q. Given the daunting challenges ahead - do we need to reinvent the practice of management in business and non-business organisations and institutions? Or would we just have to apply the basic management principles that have been defined by Peter Drucker and others?

Q. Is the current corporate model adequate for the 21st century? What are the alternatives?

The dialogue will be led by speakers from business, academia, and the non-profit and public sectors. It will be practice focused – leveraging insights from research and thought leadership. The line up of speakers includes Matthias Horx, Lynda Gratton, Julian Birkinshaw, Adrian Wooldridge, Peter Lorange and Andrew Keen.

In addition to experienced managers and executives from business, academia, public sector and non-profit institutions particular focus will be given to the In parallel to this conference, EPAS and EQUIS young generation. Fifteen percent of the conference participants will qualify accreditation seminars will be also be offered for participation based on an essay contest for young people – the Global Peter Drucker Challenge. on November 30 and December 1 2010.

For more information visit: www.efmd.org/conferences

You can find more information under the link: http://www.druckerchallenge.org/

or contact Emmanuel Duval: emmanuel.duval@efmd.org

For further details visit: http://www.druckersociety.at or http://www.efmd.org

7 EFMD Global Focus | Volume 04 | Issue 03 2010

The Forum will be led by speakers from business, academia, and the nonprofit and public sectors. It will be practice focused – leveraging insights from research and thought leadership.

2nd Global Peter F Drucker Forum, 18/19 Novemebr, Vienna

Anna Pehar joins EFMD as the Director of Business Schools Services Anna Pehar, former Director of Executive Education at the Rotterdam School of Management, has joined EFMD. Anna is taking over from Griet Houbrechts as the Director of Business School Services.

“I am delighted to welcome Anna into the EFMD fold and know that her experience, professionalism, character and international outlook will be of great benefit to EFMD in the future. I would also like to thank Griet Houbrechts for her exceptional contribution to EFMD over the last 16 years and wish her every success in her future career,” said Professor Eric Cornuel, Director General and CEO of EFMD. For the past 10 years Anna has led the Executive Education Department at RSM and was a member of the schools Director's Team. Under her leadership the Executive Education Department grew substantially and moved from being mainly nationally focused to a leading provider of international executive education.

She was also responsible for business development and internationalisation and her personal client portfolio included among others: the United Nations, Kone, Denso, Goodyear Dunlop, Haniel, AstraZeneca and Pliva. Anna has been an active part of the EFMD network and a member of the Executive Education Steering Committee for the past six years.

Before joining the RSM, Anna had a career in business development, HR consultancy and training in various companies.

She holds a master’s degree in linguistics, with majors in socio- and psycho linguistics and has a fascination for how interpersonal communication works – or does not work.

Raised in Sweden, Anna is Croatian-Italian and, having lived and worked in many countries, she communicates fluently in five languages and sees herself as a true citizen of Europe.

Anna can be contacted at: anna.pehar@efmd.org

ecch Case Winners 2010 London Business School has won the overall award in the 2010 ecch Case Awards with a case on Red Bull by Nirmalya Kumar, Nader Tavassoli and Sophie Linguri Coughlan.

Human Resource Management / Organisational Behaviour Overall winner Red Bull: The Anti-Brand Brand Nirmalya Kumar, Nader Tavassoli and Sophie Linguri Coughlan London Business School

Special award The Sumantra Ghoshal Award for Excellence in Case Writing London Business School

Economics, Politics and Business Environment Transforming the Global Fishing Industry: The Marine Stewardship Council at Full Sail?

Ulrich Steger, Alexander Nick, Oliver Salzmann and Aileen Ionescu-Somers IMD

Entrepreneurship The Grameen Bank: Credit as a Human Right Eugénio Viassa Monteiro and Ana Janeiro Dias AESE – Escola de Direcção e Negócios

Ethics and Social Responsibility innocent Drinks: Values and Value Robert Brown and David Grayson Cranfield University School of Management and EABIS

Finance, Accounting and Control Deal Making in Troubled Waters: The ABN AMRO Takeover Didier Cossin and Luc Keuleneer IMD

Leading Across Cultures at Michelin (A) Erin Meyer and Sapna Gupta INSEAD

Knowledge, Information and Communication Systems Management Apple’s iPhone: Calling Europe or Europe Calling?

Sandra Sieber, Josep Valor and Jordan Mitchell IESE Business School

Marketing sponsored by The Chartered Institute of Marketing Ford Ka: The Market Research Problem (A) Markus Christen and David Soberman INSEAD Seh-Woong Chung Singapore Management University

Production and Operations Management Ocado: An Alternative Way to Bridge the Last Mile in Grocery Home Delivery Ken K Boyer Broad College of Business, Michigan State University Mark Frohlich London Business School

Strategy and General Management Nestlé’s Globe Program (A): The Early Months Peter Killing IMD For more information on ecch visit: www.ecch.com

8 www.efmd.org/globalfocus

Ashridge’s Kai Peters is worried about where business schools are going. Interview by George Bickerstaffe

Kai Peters As a business model, what we are doing right now is, for me, not sustainable.

Kai Peters, chief executive of Ashridge Business School in the UK, is in serious mode. Not that it dents his natural ebullience. In the short time between bidding farewell to a previous visitor and walking to his office he is a fount of stories, opinions, facts and jokes. Ashridge is doing very well, thank you, he says, detouring to a notice board full of present and future courses and programmes.

So why the seriousness? Two reasons. One is the changing nature of executive education, a top earner for Ashridge compared to the relative “loss leader” of its MBA. The second is what he believes is the parlous state of business schools themselves as “businesses”.

What are your concerns about the state of executive education?

Executive Education is transforming. The question is whether this is permanent or driven by the current economy. I think it’s permanent.

Kai Peters interview by George Bickerstaffe

70% Historically 70% of leadership development has come from on the job learning and projects, only 10% from the classroom and 20 % from coaching or mentoring

9 EFMD Global Focus | Volume 04 | Issue 03 2010

Historically there has been a trend for companies not to send people on open programmes but to do them in–company. That has led to another trend, which is to drop knowledge transfer programmes within a company in favour of doing organisational development with real goals and real targets.

This is interesting because research indicates that 10% of leadership development comes in the classroom, 20% comes from coaching and mentoring, and 70% comes from on-the job learning and projects.

So the logic is that the more we can integrate coaching, real projects and real strategic challenges into our development activity the more impact we are going to have institutionally and organisationally.

This is difficult. We have executive education being taken over by the corporate universities, the low-hanging fruit being taken by the for-profits and the Bologna newcomers, and a lot of the market by e-learning. It’s a very messy competitive business right now. And while we in business schools might

10 www.efmd.org/globalfocus

say, “well those aren’t the quality markets we are in” every individual lost to them is one not coming to us.

But these types of custom programmes are notoriously difficult and expensive to design and deliver aren’t they?

You need a different sort of faculty. You need faculty that can pretty much stand on their feet for a whole day and have a plan but also be one step ahead because they are really a facilitator of a conversation. You are really saying “today let’s talk about international operations in Latin America in the morning and leadership development in the afternoon”. Not that X will lecture for an hour on the macroeconomic context of Latin America and Y will go on about marketing in Latin America. You are really just asking participants about their experiences.

The idea that “I am a master of my knowledge domain, which I will transfer to the participants” just doesn’t wash in a corporate executive education setting at all.

I suppose we are reasonably lucky at Ashridge in that we have had our organisational development consultancy for 20 or 25 years now. But looking at other schools I can see that they are trying to attract associates who can do the coaching and the facilitation because that is not going to happen with a professor from your economics department; that’s just not realistic.

Clients are also not only looking to business schools but are cherry picking quite a lot, working with consultancies, independents and others. They are much more sophisticated in their range of sources and the design of their own interventions than ever before.

I did a CLIP visit with EFMD recently and it was very interesting to see what the organisation did in house, how they brought in external faculty primarily as facilitators. They brought in some as experts, almost as gurus, but mainly to provide some impact and entertainment (I think sometimes just entertainment) for the participants. They didn’t structurally work with business schools at all; they worked with individuals from business schools.

Is this affecting degree programmes as well or just executive education?

A good question. In our case here it definitely affects the part-time masters programmes and to an extent the EMBA, which are all more or less behavioural and very much for working professionals. I’m not sure how it will affect the full-time programmes because they are not in a work situation. There’s still a tradition of such programmes being mainly about the transfer of a body of knowledge, certainly at the undergraduate and pre-experience masters level.

11 EFMD Global Focus | Volume 04 | Issue 03 2010

Kai Peters interview by George Bickerstaffe

The idea that 'I am a master of my knowledge domain, which I will transfer to the participants’ just doesn’t wash in a corporate executive education setting at all

And the MBA? I don’t know that we will ever solve the problem of the debate around the positioning of a full time MBA. Should it be more in the behavioural leadership space? Well, yes, except that that doesn’t work that well with a mid-20s audience. They are still more into “I want to acquire the body of knowledge”.

So for me you do undergraduate and the MBA to get the subject areas and the knowledge base. And you certainly don’t stop your education there. You carry on to do an executive programme later on or something that really works on the behavioural aspects of your managerial capability.

To say that the MBA will solve all your problems for your entire life at once is just not realistic. The challenges are not there. You’re not responsible for the sort of things you will be responsible for 20 years later. The best I can come up with is to flag that this will be really important for you in the future, introduce it and to get people to think about it and their own behaviour.

But I don’t think it’s realistic to introduce things like organisational development and leadership because you’re really not applying it, certainly not on a full-time programme.

Is this a challenge to business schools, even a threat?

Yes, I think it is. Part of it is a flight to size and brand. There’s also a lot of competition right through from Duke in America to Peter Lorange and what he’s trying to do in Zurich [see Global Focus Vol 04 Issue 2 2010] through to the consultancies.

There are quite significant changes afoot that won’t be put back in their box.

What can the schools do?

We need to think about disaggregating the various elements that we have in business schools rather than pretending that they are all easily integrated.

By that I mean you cannot have faculty who spend 99% of their time researching and then, depending on the school you talk to, be in the classroom for between 60 to 200 hours a year.

Look at some of the salaries that are being paid by the big American business schools and some of the European schools. If you are paying

12 www.efmd.org/globalfocus

Academics don’t particularly like to be told what to do. We have half a dozen examples of individuals who have come from the consultancy world trying to run business schools as professional service firms and it hasn’t worked £150,000 a year and you are getting ten days in the classroom out of it then at some point that doesn’t work.

So how does one fund the research? Well I think you could fund the research only if you are a very large school with lots of undergraduates or if you have tremendous endowments.

But as a business model what we are doing right now is, for me, not sustainable.

IN BRIEF: RESUMÉ KAI PETERS

Do you think this is connected or driving the rather rapid turnover in business school deans we have seen recently?

I think some deans are trying to tackle the problem but unfortunately in some cases are not succeeding very well because attitudes are pretty ingrained.

Academics don’t particularly like to be told what to do. We have half a dozen examples of individuals who have come from the consultancy world trying to run business schools as professional service firms and it hasn’t worked.

Kai Peters is a man with a knack for being in the right place at the right time.

German-born and educated mainly in Canada he had a job with IBM when he was called back to help sort out the family publishing business.

“The first generation did well, the second generation did extremely well and the third generation (my generation) was screwing it up a bit,” he laughs.

Subsequently he took an MBA at the Rotterdam School of Management at Erasmus University in the Netherlands. He was a student representative there and after his degree joined the school organising in-company projects for students.

When the MBA programme director left Peters was appointed as replacement “until someone better came along”, as he says. They didn’t. And when the dean left the same thing happened.

Peters served as dean at Rotterdam for three years before joining Ashridge in 2003 as chief executive (effectively dean).

I think what they are trying to do is a little misguided because I feel there is a fundamental difference in the philosophy in a business school and in a consultancy. Business school promote individualism. I am my research with my own personal reputation as X who happens right now to be at Y business school but could just as easily by at Z school tomorrow.

At a consultancy they centrally produce knowledge and then diffuse it as a methodology that is shared by a thousand change management professionals. And when you try to impose that model of centralised knowledge development into a business school, which is used to a high degree of autonomy and individualism, it doesn’t work. So making faculty teach the same thing or getting them to support an institutional approach is just not a realistic proposition.

It might make sense as a business model but it doesn’t make sense as a business model within the context of a business school.

I think the debate that has to happen in business schools is really around how much teaching is realistic from faculty – and it surely has to be more than we are doing now because it’s just not financeable. You can’t run a business school without a business model but we seem to be trying.

The only way you could tackle it is to have 70 or 80 people in a classroom in an MBA or open programme - and you can debate whether that’s the best learning model for participants. I would say that is large batch processing.

So we really have to think about what we are doing.

13 EFMD Global Focus | Volume 04 | Issue 03 2010

The United The United Nations Nations Global Global Compact Achievements, Trends Compact and Challenges Achievements, Trends and Challenges Edited

by Andreas Rasche, Georg Kell Edited by Andreas Rasche, Georg Kell

1SPWJEFT B DPNQSFIFOTJWF PWFSWJFX PG UIF XPSMEµT MBSHFTU WPMVOUBSZ DPSQPSBUF SFTQPOTJCJMJUZ JOJUJBUJWF XJUI NPSF UIBO 1SPWJEFT B DPNQSFIFOTJWF PWFSWJFX PG UIF XPSMEµT MBSHFTU WPMVOUBSZ DPSQPSBUF QBSUJDJQBOUT JO PWFS DPVOUSJFT SFTQPOTJCJMJUZ JOJUJBUJWF XJUI NPSF UIBO 0GGFST B VOJRVF QFSTQFDUJWF PO UIF QBSUJDJQBOUT JO PWFS DPVOUSJFT JOJUJBUJWF XJUI DPOUSJCVUJPOT GSPN QSBDUJUJPOFST BDBEFNJDT BOE (MPCBM 0GGFST B VOJRVF QFSTQFDUJWF PO UIF JOJUJBUJWF XJUI DPOUSJCVUJPOT GSPN $PNQBDU TUBGG QSBDUJUJPOFST BDBEFNJDT BOE (MPCBM $POUBJOT OPU POMZ VQ UP EBUF SF¿FDUJPOT $PNQBDU TUBGG CVU BMTP EFCBUFT SFDFOU DIBOHFT UP UIF TUSVDUVSF PG UIF $PNQBDU JODMVEJOH UIF $POUBJOT OPU POMZ VQ UP EBUF SF¿FDUJPOT CVU BMTP EFCBUFT SFDFOU DIBOHFT UP UIF $PNNVOJDBUJPO PO 1SPHSFTT QPMJDZ UIF TUSVDUVSF PG UIF $PNQBDU JODMVEJOH UIF SPMF PG (MPCBM $PNQBDU -PDBM /FUXPSLT $PNNVOJDBUJPO PO 1SPHSFTT QPMJDZ UIF BOE UIF SPMF PG FNFSHJOH TQFDJBMJ[FE SPMF PG (MPCBM $PNQBDU -PDBM /FUXPSLT JOJUJBUJWFT BOE UIF SPMF PG FNFSHJOH TQFDJBMJ[FE JOJUJBUJWFT

9780521145534 9780521198417

Paperback Hardback

£23.99/$45.00 £60.00/$99.00

9780521145534 9780521198417

Paperback Hardback

£23.99/$45.00 £60.00/$99.00

‘Encyclopedic in scope, the volume touches on all facets of the Global Compact’s ideas, ideals, innovative ‘Encyclopedic scope, theand volume touches organizationalinmodalities impact.

It willonbeallan facets of the Global Compact’s innovative indispensable reference work,ideas, and anideals, inspiration to organizational modalities and impact.

It will an global norm entrepreneurs in every field, for be many indispensable years to come’ reference work, and an inspiration to global norm entrepreneurs in every field, for many Professor John G. Ruggie, Harvard University and Special Representative years to come’ of UN Secretary-General on Business and Human Rights

Professor John G. Ruggie, Harvard University and Special Representative of UN Secretary-General on Business and Human Rights

order now at: www.cambridge.org/rasche order now at: www.cambridge.org/rasche

14 www.efmd.org/globalfocus

Keeping one step ahead The current crisis means that business schools will have to change – and that means a new type of leadership from business schools deans.

Fernando Fragueiro and Howard Thomas outline the kind of skills they will need

Deans serve as a bridge between school goals and faculty’s own interests and motivation drivers. They must also bring the voice of external stakeholders into the academic domain

Keeping one step ahead by Fernado Fragueiro and Howard Thomas

15 EFMD Global Focus | Volume 04 | Issue 03 2010

The global financial crisis has clearly shown that profound changes are needed in many core components of modern life – from market regulation policies and shareholder value-driven focus to globalisation and economic sustainability.

leadership and, when necessary, introduce change.

Business schools, as links between academia and business, must rise to the challenge of seeking solutions for the shortcomings that have been revealed. While many institutions have made significant and useful efforts over past decades, their endeavours seem to have somehow fallen short or missed the mark. Perhaps the complexities of their governance schemes have hindered bolder moves to address – and even anticipate- the changing needs of both companies and societies in an era of global and local tensions.

In the period analysed, 1990-2004, the three schools embarked on several groundbreaking international initiatives to respond to new management demands and globalisation trends. How did their deans address the need for change and how did they steer their institutions in a new direction? How did they build and use power to rally the support of boards, faculties and staffs?

To successfully overcome both persistent and emerging challenges, business schools will need strong and determined leadership to provide fresh ideas on how to build fruitful interactions between academia, businesses and society.

In a world that has embraced networking at full throttle, knowledge can no longer remain enclosed in silos; it must flow smoothly in every direction so that business education becomes both relevant and effective.

How can deans champion their schools’ leadership processes, building and executing successful strategic agendas over time? This is easier said than done, of course.

Higher education institutions’ particular organisational traits, including shared power, dual academic and managerial authority, collegiality and rotation schemes, bring a substantial influence to bear on the inner workings of leadership in business schools.

As we all know, business schools’ deans tend to be viewed and to act as “first among equals,” for they are elected directly or indirectly by faculties to serve for a specific term.

In a forthcoming book (see end of article for details), we have tried to shed some light on how deans can deal with the double hurdle embedded in their primus-inter-pares status and their responsibility to exercise

The book includes a 14-year study of three world-leading European schools, IMD, INSEAD and LBS, and explores strategic leadership processes as seen from the dean’s office.

The lessons learned from the experiences of the deans at the helms of IMD, INSEAD and LBS in years of stunning worldwide change are very applicable to understanding how deans today can juggle their schools’ standing between the academic and business worlds, and their own role as leaders.

14 The book ‘Keeping one step ahead’ includes a 14-year study of three worldleading European schools – IMD, INSEAD and LBS

16 www.efmd.org/globalfocus

Figure 1: Environmental scanning, issue diagnosis, issue legitimisation and power mobilisation

Environmental Scanning

Issue Diagnosis

– External: "What" based on critical outer context figures – Internal: "What" – Key stakeholders' interests and needs – Internal features

– Incremental – Breakthrough: – Organisational experience, inertia and resources

Power Mobilisation

Isssue Legitimisation

– Deans leadership style, skills and competencies – Power sources – Power uses: how power is built and used

– Issue sponsor – Issue salience – Agenda structure – Resources required

Deans serve as a bridge between school goals and faculty’s own interests and motivation drivers. They must also bring the voice of external stakeholders into the academic domain. And just as business schools now need to step up their responsiveness in order to help managers address their new challenges, deans are forced to bolster their own leadership skills to provide their institutions with clear, decisive governance.

Business schools’ collegiality presents a two-fold challenge: providing enough room for consensus in order to preserve and promote motivation and commitment and avoiding endless debates that could jeopardise growth and cause paralysis.

External and internal contexts hold the key for deans to understand meaningful trends in their schools’ environments in order to shape developments by using the flow of events to pursue a specific strategy.

of the dean may be narrowed down to the four key tasks identified in the comprehensive and dynamic approach to strategic leadership processes presented in Figure 1: environmental scanning, issue diagnosis, issue legitimisation and power mobilisation. Considering these tasks may help current and future deans in their day-to-day challenges.

Leadership processes in such organisations involve two crucial steps: first, securing at least a modicum of support for a strategic initiative from key actors and, second, motivating the right people to seize that initiative and make it their own, A recent survey of 200 companies by the European Academy championing its successful execution across the organisation.

In other words, any strategic pursuit needs to be legitimated of Business in Society (EABIS) revealed that context, by key constituencies while deans use their power to overcome complexity and connectedness will be the key features resistance and to procure critical resources. for sound management in the years to come. And, of course, the same applies to business school leadership.

To provide more practical, down-to-earth guidelines, the role

Furthermore, deans not only need to understand their stakeholders’ concerns but must also take into account the needs of others when framing the strategic initiatives that both each school and each situation demand. This understanding should also enlighten deans on how to use their power to accomplish an appropriate leadership style.

The overriding challenge for deans is to garner the support of their schools’ constituencies for their initiatives and to overcome any opposition from other actors whose interests may be also competing for scarce resources and a place in schools’ limited agendas.

When business school leadership processes are viewed as including a political perspective and are firmly supported by their deans’ reputation, commitment and integrity, it is possible for deans to use power and influence to build a seamless continuum that reinforces their effectiveness and drives organisational advancement.

Environmental scanning Understanding a school’s inner and outer context is crucial to identifying opportunities and finding ways to match them with current faculty aspirations, interests and priorities and board members’ concerns and objectives. As they do so deans will be able to orchestrate a strategy to raise a number of initiatives not by imposing them but by articulating and communicating them as a means to accomplish a common goal.

In this process potential supporters play a central role and opposition can be expressed and actually exploited to enhance further those initiatives rather than blocking them.

Issue diagnosis Deans should not only assess initiatives as regular business proposals but should also weigh the effort required to “legitimise” a strategic issue within their organisations –

17 EFMD Global Focus | Volume 04 | Issue 03 2010

Keeping one step ahead by Fernado Fragueiro and Howard Thomas

The Deans mission is to shape their schools’ strategy and to make it work in a way that bold breakthrough initiatives, when needed, can be pursued and effectively execute

particularly, to ensure faculty and board support. This issue diagnosis task requires the ability to determine whether an initiative involves a major shift or breakthrough in the school’s current strategy or whether it accounts for a natural next step towards its existing goals.

Incremental initiatives will normally go unhindered while true challenges come with initiatives involving a radical change that rattles the status quo for key constituencies or stretches the school’s financial resources.

Issue legitimisation Breakthrough initiatives usually demand extensive legitimisation efforts. Deans are sometimes excessively earnest in their attempts to pursue their vision and ideas, and it is often hard to resist the temptation to drive an initiative by trying to match stakeholders’ interests and ideas with market demands. This process may lead to initiative enhancements to make it more compelling for others.

While a directive leadership style is generally necessary to drive breakthrough initiatives, it should be combined with an effort to allow for discussion and contributions from key constituencies.

Power mobilisation: Finally, deans need to exercise their ability to mobilise other actors to champion those initiatives. In other words, leadership is a social influence process in which leaders try to grasp the views and motivations of others, connecting them with institutional challenges to find the best course of action.

prestige, ability to deliver results, integrity, commitment, interpersonal skills and other traits.

This does not mean that deans have no impact or influence, but positional power is just a starting point – not a “blank cheque”. Indeed, deans need to legitimise themselves, proving their worth, courage and effectiveness, before they can legitimise their initiatives.

In short, deans are responsible for setting their schools’ direction. Indeed, their mission is to shape their schools’ strategy and to make it work in a way that bold breakthrough initiatives, when needed, can be pursued and effectively executed.

Now is clearly a time for boldness, decisiveness and creativity, both to spot opportunities for business school enhancement and to respond to growing, changing management and social demands.

Deans can step up to the plate by playing this manifold role, engaging their schools’ key constituencies –business leaders, leading competitors, board, faculty and staff- in the process, actively heeding their respective needs and interests to drive an effective and well-rounded strategic agenda for their institutions.

ABOUT THE AUTHORS

Fernando Fragueiro is Professor of General Management and Director of ENOVA Thinking, Research Centre on Emerging Markets, at IAE Business School, Austral University, Buenos Aires, Argentina. He was Dean of IAE 1995-2007 and Vice President of Austral University 1998-2007.

In addition to legitimising issues, power must be used to complete the leadership process by effectively rallying support and commitment to successfully raise and execute an initiative.

Howard Thomas is LKCSB Chair of Strategic Management and Dean of Singapore’s Lee Kong Chiang School of Business and former Dean of Warwick Business School in Britain from 2000 - 2010.

Power in business schools is based on personal sources such as expertise, professional reputation, personal

Keeping One Step Ahead: Strategic Leadership in Business Schools by Fernando Fragueiro and Howard Thomas is published by Cambridge University Press, 2011.

FURTHER INFORMATION

18 www.efmd.org/globalfocus

Nadine Lemaitre has headed GDF SUEZ University, one of the world’s leading corporate universities, for the past decade, a time of growth and change for the giant energy group. She talks to George Bickerstaffe

Generating leadership Nadine Lemaitre has been president (head) of GDF SUEZ University since its inception in 1999 (it opened in 2000 and was then known as SUEZ University).

Although Ms Lemaitre took her first degree in business engineering and later completed a PhD in applied economics, her career has been largely in human resources, including senior posts at Bull Europe and Générale de Banque. Her responsibilities have included designing human resources, labour/management relations, development and succession planning.

She is also a professor at the Solvay Business School of the University of Brussels in Belgium.

GDF SUEZ University plays a key role in the development and training of the Group’s executives and managers. Its missions align with the Group’s strategic priorities and it regards itself as a genuine tool for integration, cohesion and expertise-sharing and models itself as a laboratory for ideas and strategic planning within the company.

Since its creation, over 30,000 managers have received training from the University. In 2009, close to 6,000 participants attended some 200 sessions organised in 15 countries. GDF SUEZ University has taken a conscious decision not to outsource its programmes. In addition to the regular participation of over 200 group experts and executives, the University’s 22 staff members work in close collaboration with some 40 outside partners in the design and implementation of in-house programmes.

Generating leadership: Nadine Lemaitre interview by George Bickerstaffe

19 EFMD Global Focus | Volume 04 | Issue 03 2010

The University regards itself as a genuine tool for integration, cohesion and expertise-sharing and models itself as a laboratory for ideas and strategic planning within the company

30k Since its creation, over 30,000 managers have received training from the University

6000 In 2009, close to 6,000 participants attended some 200 sessions...

15 ...which were organised across 15 countries

20 www.efmd.org/globalfocus

GDF SUEZ University received CLIP (Corporate Learning Improvement Process) accreditation from EFMD in May 2010. CLIP accreditation recognises the high standards and quality of learning programmes offered and dispensed by corporate in-house universities and corporate learning functions for training and individual and group development.

The France-based global company GDF SUEZ is the world's second-largest utility company after Electricité de France. It was created in 2008 through the merger of Gaz de France and SUEZ and is active across the entire energy value chain. The company employs over 200,000 people worldwide and posted revenues of nearly 180 billion in 2009. Most recently, GDF SUEZ took over the British energy company International Power.

You are very much a part of the corporate world but are also a faculty member at Solvay Business School. What do you enjoy most of these two different sides of your professional life?

What I enjoy most is to be in both worlds.

There is a saying that there is nothing as practical as a good model of reality and that practice is the best way to build a robust and relevant model.

I have been involved in both the corporate and academic sides for many years and feel that having a foot in both is a very privileged position.

In the early years of the University, essentially the Group was operating as a holding company with a set of different businesses that really didn’t think they had anything to do with each other.

So the University has increasingly acted as a place where people can come to explore and discover what they do share with each other.

The University isn’t really a teaching experience; it’s a learning experience. People are really teaching each other. We have a lot of group work and peer coaching for example.

What have been the challenges for the corporate university in the subsequent merger with Gaz de France?

We had to adapt the content of all programmes, of course. In Gaz de France, there was not really anything like a Corporate University. Gaz de France and Electricité de France used to be one group and when they split most of the training function went with EDF. SUEZ University transformed itself into GDF SUEZ University, carrying on most of its initial mission of being a tool for integrating the Group, but on a larger scale, with new contents and for an enlarged audience.

How has the mission of GDF SUEZ University evolved over the years?

I think the mission of the University has simply been reinforced. After the merger this mission is stronger and this is again I don’t know that I would say that I enjoy one the case with the upcoming merger with International Power. The University will be more than the other but being active in the corporate world allows you to really extend the the place where executives and managers scope of what you are doing. But I also enjoy of different origins, different geographies, will meet, share what they have in common thinking and building models. from a business perspective, and prepare What were the motives to create what was the future of the Group. I’ve always said that then SUEZ University a decade ago? And what the University, right from the beginning, was were your experiences in the initial stages? not just about building competences within The University opened its doors in April 2000. the Group. It was a tool for integration. And First of all, you should know that it was the that has not changed. conception of the CEO and Chairman [then What do you see as the main challenges for and now],Gerard Mestrallet. SUEZ had just the corporate learning function in the future? merged with Lyonnaise des Eaux, and Mr Mestrallet believed that a corporate university To go back to basics, I would say that the main purpose of a corporate learning could be a force to bring the different function is to help the social and business components of the Group together, and systems of a company to evolve from where help create a common culture. It was a they are at a given moment to where they tool for integration really. need to be to meet the challenges of the We have been through even more mergers world around them. since then, right up to the big one in 2008, It’s a question of taking a company where which brought together 160,000 employees from SUEZ and 40,000 from Gaz de France. it is when you start and giving it – through individuals and groups – the competencies Obviously that intensified the need for it needs to evolve and mature to a situation integration.

200k GDF SUEZ employs over 200,000 people worldwide...

¤80bn ... and posted revenues of nearly €80 billion in 2009

Generating leadership: Nadine Lemaitre interview by George Bickerstaffe

21 EFMD Global Focus | Volume 04 | Issue 03 2010

I’ve always said that the University, right from the beginning, was not just about building competences within the Group. It was a tool for integration. And that has not changed

where it is better prepared to face the competition.

Now that depends where the company is at that certain time. What are the external challenges it faces? How are we going to adapt to face those challenges? How big is the company? How international is it? What is its relationship with its customers?

There are so many differing factors involved.

It is very hard to come down to a standard definition of what a corporate university or a corporate learning function actually does.

GDF SUEZ University received CLIP accreditation earlier this year. What were your reasons for undertaking this process and what did the experience bring?

Well, you cannot forget that we had just gone through a merger. And it was a merger of equals, not a takeover. And people will tell you that mergers of equals are the hardest mergers.

So when we decided to go for CLIP we were still in a post-merger phase where we needed to re-establish – not our mission because I think we had a strong sense of what our mission was – but rather our identity and our role and what should be our strategy for the future in this new group.

So I would say that CLIP accreditation was a very interesting exercise.

And for me the really interesting part is what has happened since. Because the whole accreditation process was really the start of a period of reflection. And the question was: our mission is clear; but what is the strategy to achieve our mission? That was not so clear.

And we are now at the stage where we have worked on a number of scenarios regarding the size and scope of the University and are ready to talk about them to the chairman and then we will know how to proceed.

I think accreditation gave us the opportunity to think about how we can go forward.

The peer reviewers were particularly impressed by the role of your programmes for top executives and the way they link into the creation of a strategic direction for the Group. Could you elaborate on that?

It may sound a little arrogant but I think we do have a very original programme for senior executives in terms of participating in the elaboration of the Group strategy.

We have been running this programme for the last ten years, working with groups of 30 senior executives from different business areas. They work on a series of strategic issues with the aim of making recommendations on actions to be taken in the future. It’s very interesting for the executives because it allows them to withdraw a little from their normal daily activity. In the past they have produced some very fruitful and useful recommendations that have been put into practice by the board.

The programme also positions the University at a very strategic level within the Goup in the sense that we are closely involved in its future strategic direction.

It also works into other programmes because we are aware of what might be ahead in terms of business challenges.

22 www.efmd.org/globalfocus

Peter Drucker's Legacy Peter Drucker is most commonly thought of as a management theoretician and undoubtedly this is the most well known dimension of his work. However, Drucker’s aim was also to write about man in his social context. In his book Managing People and Organisations: Peter Drucker's Legacy, an extract from which follows, Guido Stein elucidates Drucker's thinking in a way that emphasises its relevance for today and tomorrow

Management of Knowledge in the New Economy The new management paradigms We live in the Internet age, the fruit born of the confluence of new information technologies and telecommunications. The Internet is now fashionable, even ubiquitous in some parts of the world, and has triggered an intense speculative fever. But the Internet is more than just a fad. As happened with radio or television, the Internet is here to stay. Its impact on the economy and society is of such magnitude that we now speak and write of a new economy. Today we can learn from successes in this new field and, above all, the failures1.

Managing People and Organisations: Peter Drucker's Legacy by Guido Stein

23 EFMD Global Focus | Volume 04 | Issue 03 2010

In every organisation –- business or nonbusiness alike – only the last 10% of management has to be fitted to the organisation’s specific mission, its specific culture, its specific history and its specific vocabulary

24 www.efmd.org/globalfocus

Is there a new economy or is it the traditional economy transformed by new telecommunications technologies and IT? For Peter Drucker, and for entrepreneurs and executives, the answer has no bearing on what really matters: leading in the Internet age is a work of synthesis and character, intelligence and will. The development of the knowledge society is characterised by its swiftness. Knowing how to orient oneself with speed and flexibility is as difficult as it is indispensable.

Not surprisingly, life is lived forward but understood backward. History gives us wise examples: "As the century closed, the world becomes smaller. The public rapidly gained access to new and dramatically faster communications technologies. Entrepreneurs, able to draw on unprecedented scale economies, built vast empires. Great fortunes were made. The government demanded that these powerful new monopolists be held accountable under antitrust law. Every day brought forth new technological advances to which the old business models seemed no longer to apply. Yet, somehow, the basic laws of economics asserted themselves. Those who mastered these laws survived in the new environment.

Those who did not, failed”2.

Although it might only be a rough description of what is happening now in the economic world, these lines are intended to outline the situation of a century ago when technological innovations in rail or communications caused upheaval in business and social attitudes.

It is obvious that information and knowledge have always been factors which influenced the economic future of humanity; however, it is this increased presence of technology that has played an almost exclusive role in wealth creation. If we add to this the ability to digitise information and thus enable instantaneous and nearly free transmission, we find ourselves facing the core of the economic, and perhaps also social, paradigm shift.

Technology changes, but the laws of the economy remain. The information economy is characterised by several well-defined features: information is expensive to produce but cheap to reproduce; that is, it has high fixed costs and low marginal costs; also, information is a good, an asset, of experience – it has to be tested once to be evaluated; nevertheless, information as such is an asset of experience every time it is consumed. Before buying shoes, the client tests them; but what would happen if you read a newspaper, book or market

research to test them? And finally, the wealth of information leads to a corresponding poverty of attention.

In any case, what has really changed from what was going on until the early nineties is the technological infrastructure: today information is more accessible and therefore more valuable; nevertheless it does not change the total amount of information available. What is truly new is the ability of modern companies to make new orders based on the exchange of electronic data, which allow the analysis of orders in all branches under different pricing and promotion policies, and the speed with which they introduce discounts on products that are not selling well. And all of this with minimal human intervention.

How does Peter Drucker see these sweeping changes?

What is their effect on the management of companies and individuals? For our author, the psychological effect of the information revolution, as with the Industrial Revolution, has been enormous: Electronic commerce is to the information revolution what the railroad was to the Industrial Revolution: a completely new event unprecedented and completely unexpected. As with the railroad 170 years ago, electronic commerce is creating a radically different economic boom that

is rapidly changing the economy, society and politics3. The railroad changed people's "mental geography" and physical horizon; electronic commerce not only overcomes distance – in the case of purely informational products, it removes it.

As our author likes to point out, the largest e-commerce growth is occurring in a sector which until now had no trade: the labour exchanges. The Internet has become a macro-labour exchange with millions of digitised résumés flowing through it. The result is a renewed labour market.

Time is relentless and more so when it comes to practical action; what was true yesterday may be wrong tomorrow; therefore, to speak of absolute and immutable truths in management requires prudence to stay within limits which make a useful tool ineffective or useless, precisely because any institution - whether a commercial enterprise, a public service, a university, a church or a large military organisation – is evaluated by its capability of producing results outside of itself.

In this sense it is a theoretical and practical mistake to argue that there is an organisation par excellence or one right way to manage people. But not everything is subject to a blind, random relativism: in the art of management can be found

Managing People and Organisations: Peter Drucker's Legacy by Guido Stein

some extremely useful general features, especially in this accelerated era of the Internet: "There are, of course, differences in management between different organisations – Mission defines Strategy, after all, and Strategy defines Structure. There surely are differences between managing a chain of retail stores and managing a Catholic diocese (though amazingly fewer than either chain stores or bishops believe); between managing an airbase, a hospital and a software company. But the greatest differences are in the terms individual organisations use. Otherwise the differences are mainly in application rather than in principles.

There are not even tremendous differences in tasks and challenges. The executives of all these organisations spend, for instance, about the same amount of their time on people problems- and the people problems are almost always the same. Ninety per cent or so of what each of these organisations is concerned with is generic. And the differences in respect to the last 10% are not greater between businesses and non-businesses than they are between businesses in different industries, for example, between a multinational bank and a toy factory. In every organisation – business or non-business alike – only the last 10% of management has

25 EFMD Global Focus | Volume 04 | Issue 03 2010 FOOTNOTES

1 See Guido Stein, Success and Failure in the new Economy.

Rules for conduct in the Internet age, Gestión 2000, Barcelona 2001.

2 Carl Shapiro and Hal R. Varian, Information Rules.

A strategic guide to the networked economy, Harvard Business School press, United States, 1999, p.1. Drucker fully concurs in this analysis: "Beyond the information revolution" The Atlantic Monthly, October 1999.

3 See Beyond the information revolution.

4 P. Drucker, Management Challenges for the 21st Century, Butterworth Heinemann, Oxford, 1999, p.8 5 P. Drucker: "Only through the education of technologists can developed countries continue to have a considerable and lasting competitive advantage.” In "Knowledgeworker productivity: The Biggest Challenge, California Management Review, vol. 41, pp. 79-95, Winter 1999.

6 P. Drucker, "Meaningful work" Executive Excellence, vol 16, November 1999.

EXCLUSIVE BOOK OFFER

This article is an extract from Managing People and Organisations: Peter Drucker's Legacy by Guido Stein published in July 2010 by Emerald Group Publishing Limited ISBN: 9780857240323

The renewal of the practice of management also necessarily brings the emergence of knowledge workers and managers because they are the people who apply the knowledge at the highest level to be fitted to the organisation’s specific mission, its specific culture, its specific history and its specific vocabulary”4.

The renewal of the practice of management also necessarily brings the emergence of knowledge workers and managers – Drucker also referred to them as technologists – because they are the people who apply the knowledge at the highest level5. Unlike manual workers, who were seen as a cost to the company, the new players are an asset. In reality they are not subordinates but co-workers and they quickly come to know their work better than their bosses. As in an orchestra, an organisation of knowledge can easily undermine the more-capable superior, let alone the more autocratic.

What motivates a knowledge worker, in addition to the clinical factor of money, is, after all, just what motivates a volunteer: his work6. They need a challenge; they need to know the mission of the organisation and believe in it, they need ongoing training and to see results. Managing is built on the strengths and knowledge of each person. This requires that management become entrepreneurs: management and entrepreneurship are two sides of the same coin: "as a rule it is necessary to design the company for change, and to creating change rather than reacting to it."

Emerald Group have kindly provided this exclusive excerpt from the book as well as extending a 25% discount offer on the book to EFMD members who visit http://books. emeraldinsight.com/offer/ and enter the code EFMD when prompted FURTHER DRUCKER RESOURCES

Visit Emerald's Peter Drucker portal for free articles, videos and interviews celebrating his life and work. http://www.emeraldinsight.com/drucker/index.htm This article is © Emerald Group Publishing and permission has been granted for this version to appear within Global Focus. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission of Emerald Group Publishing Limited ABOUT THE AUTHOR

Guido Stein is a professor at IESE business school, Spain, Chairman and CEO of EUNSA and the author of a number of management and business books

26 www.efmd.org/globalfocus

Looking at their corporate education and training, most organisations only see the tip of the iceberg, treating employee training and development as a functional activity and just another business expense.

Lindsay Ryan believes there is more involved

27 EFMD Global Focus | Volume 04 | Issue 03 2010

The corporate education iceberg by Lindsay Ryan

During the global financial crisis many organisations reduced, or in some cases slashed, their corporate education and training budgets.

For most, this meant reducing their overall activity in employee training and development without considering the implications on the organisation beyond the financial crisis or exploring other options to stretch their corporate education budgets further.

Organisations that maintained a consistent level of investment in employee education and training or found more effective ways of increasing the impact from their corporate education and training are more likely to emerge from the financial crisis with a competitive edge over those who slashed their budgets.

In my new book Corporate Education – A Practical Guide to Effective Corporate Learning, I introduce the corporate education “iceberg” as an holistic approach that organisations can use to consider and plan corporate education and training programmes and improve the impact of these programmes.

In the figure below the tip of the iceberg above the “water line” represents formal education and training, which includes such things as: – vocational and technical training programmes – university and higher education programmes – short courses – executive education programmes – conferences and seminars Below the water line informal and workplace learning includes a diverse range of dynamic learning approaches such as mentor support, workbased projects, coaching, buddy systems, job shadowing, job rotation, work-team projects and social interaction among employees. An effective and well-organised employee induction programme is another example of informal learning.

The Corporate Education ‘Iceberg’

Formal education Above the water line Below the water line Informal and workplace learning

28 www.efmd.org/globalfocus

The corporate education iceberg approach also recognises a “shallow” area around the water line that includes practical/ life skills training programmes that help in developing an employee’s everyday skills and practical business expertise.

These types of programmes include time management, public speaking, presentation skills and basic budgeting as well as strategies and techniques for developing an effective work-life balance.

Organisations that only see the tip of the iceberg and treat corporate education and training as a function or business expense are missing the opportunity to enhance the level of understanding and application of what their employees learn and to embed that learning within the organisation.

20% An important attribute of informal and workplace learning is that it generally consumes less than 20% of the training and development budget

There is emerging research that suggests around 20% of employee learning and development occurs through formal, structured corporate education and training programmes while some 80% of employee learning occurs through informal and workplace learning.

The corporate education iceberg model visually depicts the integrated nature of formal education and training with informal and workplace learning.

Another important attribute of informal and workplace learning is that it generally consumes less than 20% of the training and development budget and plays a complementary role for employees to practise and apply their learning to enhance their level of understanding gained from formal education and training programmes.

Informal and workplace learning allows employees to apply, contextualise and reflect on their learning, which stretches the value and impact derived from the training budget.

Part of the process of developing an employee’s understanding of the implication and application of their new knowledge and skills might also involve discussions with work colleagues, a discussion with a mentor, or some trial and error as they start to use their new knowledge and skills.

These are examples where informal and workplace learning complements formal learning to build the level of understanding, confidence and application of new knowledge and skills. However, most organisations do not consider how they can integrate the use of informal and workplace learning to increase the impact and value from their corporate education and training programmes.

Another approach in providing structure to informal and workplace learning could be to involve employees in workbased projects. Employees can undertake work-based projects individually, although greater learning occurs when employees work as part of a team to apply their new knowledge and skills to a real workplace concern. The projects could be focused on issues or opportunities identified by senior management that might have previously been undertaken by a senior manager or an external consultant.

Work-based projects provide a mechanism that allows employees who have participated in formal corporate education or training programmes to apply their knowledge, explore the implementation of their knowledge or adapt

Most organisations do not consider how they can integrate the use of informal and workplace learning to increase the impact and value from their corporate education and training programmes

generic concepts to the context of their workplace using the information, methods and tools presented in the formal programmes. They can enhance the learning experience of participants, transform theory into application and increase the level of understanding of the topic by employees.

Such projects undertaken by teams of employees have other learning and development potential as well. The projects can easily be designed to facilitate the development of such skills as leadership, project scoping, negotiation, project management, report writing and presentation, and delivering progress reports on the findings or recommendations from a project.

Work-based projects can be undertaken by employees from

29 EFMD Global Focus | Volume 04 | Issue 03 2010

The corporate education iceberg by Lindsay Ryan

Where there is a lack of senior management commitment, the chance of any corporate education and training programme being sustained and implemented effectively is significantly reduced.

There is a difference between senior management saying they are committed and their actual demonstration of commitment. This is particularly important in corporate education given the intangible nature of education and the fact that the real benefits of a corporate education programme accrue over time.

Those organisations where the chief executive visibly demonstrates his or her commitment to corporate education and training, whether as a role model by participating in certain corporate education programmes, delivering components of particular programmes or as a guest speaker in selected programmes, have a higher level of innovation, operational performance, financial performance, and employee attraction and retention compared to competitors.

A recurring message in the book is the need to align all corporate education and training with the strategic goals of the organisation at all levels.

Most organisations have strategic plans outlining its purpose, strategic direction and broad goals. By aligning corporate education with the strategic goals, an organisation is better placed to retain good employees as they are engaged in an overall learning programme that has structure and that aligns with the organisation’s strategic plan. This provides employees with a sense of direction and a feeling they are valued. a particular unit or business discipline or with employees from different disciplines within an organisation to pool their expertise, challenge assumptions and develop a more holistic understanding of their organisation.

For corporate education and training to have any real impact on an organisation, formal learning needs to be integrated with informal and workplace learning that allows and encourages employees to reflect on their learning and apply their new knowledge to their workplace.

Organisations with a strategic approach to corporate education that invest in the learning and skills development of their employees find their investment increases over time.

Corporate education can also play an integral role in succession planning, leadership development, building organisation capability and capacity, and facilitating innovation programmes to generate new products and services and identifying new markets and customers.

The purpose of the iceberg model is to highlight that fact instead of assuming, or hoping, that the learning presented in a formal corporate education and training programme will automatically be adopted by employees and transferred to the workplace.

The application and context needs to be considered during the planning stage of a formal programme. Planning needs to consider how concepts, tools and methods presented during a formal programme can be understood and embraced by employees to sustain the new ideas, changes, tools or methods. Ideally, organisations should approach all corporate education and training using an iceberg approach.

The book also emphasises the role of the chief executive in corporate education. The chief executive not only needs to be committed to corporate education and training of employees but visibly demonstrate this commitment. The attitude of the chief executive directly influences other senior managers and flows through to all areas of an organisation.

FURTHER INFORMATION

Corporate Education: A Practical Guide to Effective Corporate Learning

by Lindsay Ryan is published by Griffin Press, Australia, 2010.

ISBN 978-0-646-52812-0 ABOUT THE AUTHOR

Dr Lindsay Ryan is Director of Corporate Education Advisers, an Australiabased corporate learning consultancy. He was previously Director of Strategic Partnerships, the corporate education unit of the University of South Australia. lindsay@corpedadvisers.com.au

30 www.efmd.org/globalfocus

The challenge of change Management education in the Middle East and North Africa faces many challenges. In the run-up to a major EFMD conference in this important region, Ananth Rao outlines some of the key issues

The challenge of change by Ananth Rao

31 EFMD Global Focus | Volume 04 | Issue 03 2010

The countries of the Middle East and North Africa (MENA) region share many common features, notably Islam as the main religion and Arabic as a common language. However, they differ in ethnicity, traditions, history and spoken dialects of Arabic. Economic development strategies also vary between the oilproducing states such as Kuwait and the United Arab Emirates and the non-oil producing countries such as Tunisia and Jordan.

According to the United Nations Development Programme’s (UNDP) 2002 Arab Human Development Report, MENA countries need higher education to: — Provide increasing numbers of students, especially those from disadvantaged backgrounds, with specialised skills because specialists are increasingly in demand in all sectors of the economy — Teach students not just what is currently known but also how to keep their knowledge up to date so that they will be able to refresh their skills as the economic environment changes — Increase the amount and quality of in-country research, thus allowing the MENA region to select, absorb and create new knowledge more efficiently and rapidly than it currently does A worrisome point about education systems in MENA is the lower reliance placed on the inculcation of cognitive problem-solving skills. Students are, rather, encouraged to memorise answers to a limited number of problems in order to pass one exam after another.

As a result, students are rewarded for being passive rather than active learners but graduate into a job-market that values creativity and problem solving. There is thus a mismatch between what was learned and job relevancy.

MENA countries need to educate more of their young people to a higher standard.

A worrisome point about education systems in MENA is the lower reliance placed on the inculcation of cognitive problem-solving skills. Students are, rather, encouraged to memorise answers to a limited number of problems in order to pass one exam after another

32 www.efmd.org/globalfocus

That involves problem solving, critical thinking and analysis through a structured industry-relevant curriculum. The quality of knowledge generated within higher education institutions, and its availability to the MENA economy, is critical to the competitiveness of countries in the region.

It is our sincere hope that the 2010 EFMD conference being held in Dubai (and hosted by the University of Dubai) on November 28/30 2010 will address some of the following higher education issues for promoting management education in the MENA region.

28/11/10 The 2010 EFMD is conference being held at Dubai , and hosted by the University of Dubai, from 28 to 30 November 2010 and will address education issues facing MENA

Faculty quality

Students

Higher education institutions clearly need well-designed academic programmes and a clear mission.

Most important to their success, however, are high-quality faculty, committed and well-prepared students, and sufficient resources.

Severely overcrowded classes, inadequate library facilities and few student services (if any) are the norm.

Many students start their studies academically unprepared for higher education. Poor basic and secondary education, combined with a lack of selection in the academic system, lie at the root of this problem. Very few institutions of higher education are selective in the quality of students they admit. Rarely does an institution respond by creating remedial programmes for inadequately prepared students.

A more enlightened view of learning is also urgently needed, emphasising active intellectual engagement, participation and discovery rather than passive absorption of facts.

While pay disparities make it difficult to attract talented faculty, recruitment procedures are often found to hinder intellectual growth. Further, a faculty that is consistently present and available to students and colleagues has an enormous influence in creating an atmosphere that encourages learning.

Yet many faculty work part-time at several institutions, devote little attention to research or to improving their teaching, and play little or no role in the life of the institutions employing them. Faculty members are often more interested in teaching another course – often at an unaccredited school – than in increasing their presence and commitment to the main institution with which they are affiliated.

A more enlightened view of learning is also urgently needed, emphasising active intellectual engagement, participation and discovery rather than passive absorption of facts

33 EFMD Global Focus | Volume 04 | Issue 03 2010

The challenge of change by Ananth Rao

Research The role of research derives from a unique capacity to combine the generation of new knowledge with the transmission of existing knowledge.

Ironically, the research agenda is scanty in universities, leaving scholars unable to keep up with developments in their own fields. Support for faculty research is scarce, with few internationally accredited institutions providing lower faculty teaching loads, emphasising research accomplishments in recruiting and promotion decisions, and adopting international standards for awarding degrees.

— Students must learn not only what is known now but also how to keep their knowledge up to date. Curricula should be designed so that students learn how to learn — Specialisation is increasingly important. Institutions of higher education will need to provide opportunities for in-depth study of particular fields — Knowledge is being produced throughout the world and active engagement with scholars in other countries is crucial for developing and maintaining a lively intellectual community. MENA countries that allow information to flow freely will benefit more

As universities lose their ability to act as reference points for the rest of the education system, MENA countries find it harder to make key decisions about — The extent of student achievement the international issues affecting them. of the learning outcomes of degree programmes should be regularly Knowledge has become a springboard assessed and the learning outcomes for economic growth and development, continuously improved/elevated. Lack making the promotion of a culture that of information about the quality of supports its creation and dissemination higher educational institutions makes a vital task. Administrators of higher it difficult for students to make choices education institutions and higher about their education, making it hard education policymakers must keep to enlist consumer demand in the a number of considerations in mind: battle to raise standards.

Conference Given this background of key issues, the theme of the 2010 EFMD Conference in the MENA Region – Creating International Impact with ProgrammesManagement Education in the MENA Region – is quite apt. Distinguished faculty members from reputable universities in both the developed and MENA region countries together with practitioners will participate to discuss and shed light on some of the higher education issues raised above.

With concerted efforts by all, it is our earnest hope that the higher education scene in the MENA region will improve in coming years.

MENA Middle East & North Africa The MENA region comprises: Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya, Malta, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, Turkey, the United Arab Emirates (UAE), West Bank and Ghaza (Palestine) and Yemen

ABOUT THE AUTHOR

Ananth Rao is Professor and Chief Academic Officer (formerly the Dean of College of Business Administration at University of Dubai), University of Dubai, United Arab Emirates.

34 www.efmd.org/globalfocus

How to merge business schools Merging business schools is a complex and difficult business. Michel Kalika details one example of how it can be done successfully

How to merge business schools by Michel Kalika

35 EFMD Global Focus | Volume 04 | Issue 03 2010

Successfully completing a merger is as difficult a challenge for business schools as it is for companies. The success of any merger depends on the context, the compatibility of the potential partners and the management of the union (both pre- and post-merger). And there is no reason to believe that the failure rates may be incomparable, except to consider that the deans of business schools may use their knowledge to be better managers (a fact still to be ascertained). In October 2007, IECS, a French Grande École founded in 1919 in Strasbourg, merged with IAE (Institute of Business Administration), also in Strasbourg and founded in 1957, to form the EM Strasbourg Business School.

This merged school became part of the University of Strasbourg, which was itself the result of three separate universities in Strasbourg coming together in January 2009. The merger between IECS and IAE came as something of a surprise in France since each institution belonged to one of two different types of educational institutions that are generally seen as competitors.

Indeed, management education in France is structured around two types of schools, business schools (like IECS), which are usually attached to Chambers of Commerce; and institutions such as IAE, which are incorporated into universities.

Why did the merger occur?

The merger was strongly encouraged by institutional stakeholders (the Chamber of Commerce, the Regional Authorities, the Alumni Association and the University).

Their idea was to create a business school in Strasbourg that would be significant enough to allow the implementation of an expansion strategy. The stakeholders felt that a business school located in Strasbourg, the self-styled “capital” of Europe, in the affluent Alsace region and supported by a powerful Chamber of Commerce would be in a very good position for future growth.

How was the merger carried out?

The philosophy at EM Strasbourg was to get staff and faculties from the two merging institutions to work together from the beginning (proposed by the consultant who piloted and followed through the work).

The merger between IECS and IAE came as something of a surprise in France since each institution belonged to one of two different types of educational institutions that are generally seen as competitors

36 www.efmd.org/globalfocus

The fact that the Chairman and the Dean were new to the school helped the rapid adoption of an ambitious expansion project, which was looking to the future and purposely oblivious to the histories of the two former institutions PICTURED ABOVE: MICHEL KALIKA

Group projects were launched in July 2007 on different topics including: –Governance, organisation and budgeting –Programme and activity portfolio –Research and expertise; faculty management – Identity, marketing and communication (including corporate relations) –International relations and partnerships Each group included members from different areas as well as people from external organisations if needed. Each group leader reported to a Strategic Steering Committee, held every month, gathering group work, discussing issues and proposing agendas for the next meeting. A general assembly of both institutions’ staff and faculty was held regularly to inform members of developments and a project management schedule was set up with deadlines. Each group had to meet between six or seven times before delivering its report.

At the beginning of 2008 an “acting” Board of Trustees decided to launch the recruitment of a Dean for the next academic year. In the meantime, discussions with potential board members were also held.

In March 2008, a new governance structure was implemented for the new EM Strasbourg Business School with the appointment of a new Dean (a professor from ParisDauphine University) and a new Chairman, a prominent local figure and former Minister of Industry and Trade.

A five-year strategic plan was approved in April 2008. The plan provided for an expansion of the school based on two major strategic pillars, quality and quantity. Although the business school had gained a reputable image based on its incorporation into the University, it had never been through an accreditation process.

The strategic plan provided for the acquisition of international accreditations (EPAS, AACSB, EQUIS and AMBA) as well as various national labels and certifications.

In terms of size it was envisaged that the number of students would increase from 1,400 to 2,500 and staff from 40 to 80.

From a competitive standpoint, the rationale for such growth was that, despite the merger, the business school remained smaller than its competitors and fell short of the needs of companies seeking young multicultural managers (35% to 40% of Programme Grande Ecole (PGE) students find their first jobs abroad).

In addition, an internal agreement giving the school full autonomy to carry out its expansion strategy was signed with the Chancellor of the University and approved by the Board of Trustees.

Why is the merger regarded as a success?

Internally, all faculty members and administrative staff from the two institutions decided to remain with the school following the merger. Three years later, the merger has been totally accepted and any problems remain an exception.

As Dean, I can only mention the need to harmonise remuneration policies.

Externally, the business school has seen its ranking improve in all league tables (a 10-point rise in the main ranking conducted by L’Etudiant/L’Express) while its reputation has also been enhanced. This led in 2010 to the number of applicants to the PGE increasing by almost 70%.

2500 The stratgeic Plan envisaged student numbers would increase from 1,400 to 2,500...

80 ...and that staff numbers would rise from 40 to 80

70% As a direct result of improvements to the business school’s rankings and reputation 2010 saw an increase of almost 70% in student applications

37 EFMD Global Focus | Volume 04 | Issue 03 2010

How to merge business schools by Michel Kalika

Why was the merger successful?

The situation before the merger was a determinant in ensuring success since both institutions formed part of the same university and shared close legal statutes (the former business school, IECS, which had been created by the Chamber of Commerce, joined the university in 1956).

In addition, both schools had been housed in the same building since 1999. Although their institutional cultures were different with respect to international orientation and competition, all faculty members shared a common business school culture in terms of student employability and corporate links. Furthermore, the two institutions’ programmes were complementary and did not overlap.

On a managerial level, the fact that the Chairman and the Dean were new to the school helped the rapid adoption of an ambitious expansion project, which was looking to the future and purposely oblivious to the histories of the two former institutions. The emergence of a new governance system and the fact that the Dean had had prior experience in both educational environments prevented the merger from being perceived as a unification by absorption.

The expansion plan (communication, programme design, recruitment, accreditations and so on) introduced by management was soon put in place. In the weeks that followed, the establishment of the new governance system, EPAS accreditation was launched and several innovative degree programmes (Executive MBA in Sustainable Development, University Degree in Islamic Finance for example) were developed. The pace of change left no time for nostalgia.

The unfailing support of stakeholders, especially the Strasbourg Chamber of Commerce, which increased its financial contribution, has been decisive. Such support has enabled the school to recruit staff, to put into place a faculty affiliation policy and to increase the number of academics from 40 to 90 in two years. Expansion has meant opportunities for the administrative staff to acquire new skills and for the faculty to rise to fulfilling new challenges.

As a result of the expansion strategy, new faculty members from the university joined the business school, as well as recruits from outside. A research laboratory specialising in banking and finance requested to be attached to the school, thus transforming a merger of two-into-one into the quasi-

merger of three-into-one. Consequently, the more senior members of staff soon became part of the influx of newcomers.

Since gaining quality recognition through international accreditations and national certification and recognition was one of the mainstays of the strategic plan, we can speak here of management through accreditations and change.

Indeed, from the moment the strategic plan was adopted, its implementation has been a major goal for the entire school.

Compliance with accreditation, certification and label criteria has been an extremely powerful tool for the management team – and so have the first external evaluation reports, in particular EPAS, which have helped the School to grow. The need to abide by criteria and standards has played a decisive role in terms of creating an organisation and a common culture integrating the two former institutions.

At an external level, the EM Strasbourg Business School continues to operate within its two original networks, the Grande École and the IAE systems, and in September 2010 the school organised the national congress of IAEs. After two years, the implementation of the expansion plan has enabled the merger to be a success and the early achievements (growth in the number of candidates, EPAS accreditation, acquisition of the targeted certifications and recognitions, progress in the rankings, commitment from partners and alumni, and so on) have helped initiate a positive spiral facilitating the pursuit of change.

In sum, the success of the merger depended on a shared common vision by the stakeholders, the growth potential for the school and in the managerial impact of accreditations used as a lever for change.

ABOUT THE AUTHOR

Michel Kalika is Dean of EM Strasbourg Business School

38 www.efmd.org/globalfocus

Looking beyond the Leadership studies have been dominated in the past by a Western mindset. Sharon Turnbull describes new research into non-Western leadership styles – Worldly Leadership – that could profoundly influence responsible and sustainable management and business practices

The majority of leaders across the globe today enhance the career prospects of their emerging have been conditioned at least in some way by talent by adopting Western leadership models.

Western and US-centric leadership theories While this dominant mindset may have served and methodologies. many parts of the globe well in supporting business education and wealth creation – and the This thinking has been largely driven by a value of Western leadership knowledge is not in business school curriculum that for many years question – we now believe that it has limitations has been rooted in Western leadership thinking and that the many challenges to our 21st century and practice. Case studies, books and articles world cannot be addressed by a Western mindset derived from US and European studies are the bedrock of today’s business education. Leadership alone. models focus on the leader as individual, often charismatic, heroic or transformational. And leadership biographies reflecting this perspective are often global best-sellers, perpetuating this view.

Even Eastern collectivist and indigenous community-based cultures, whose societies are based on very different social norms and principles, have nonetheless increasingly bought into the Western leadership knowledge base, seeking to strengthen their economies, their ability to compete on the global stage and to

Pick up any newspaper or journal today and it is likely there will contain something about globalisation and its effects on our society or economy. The “credit crunch”, volatile oil prices, recession and climate change all remind us how interconnected our globe has become.

Sustainability, energy security, food and water security, poverty, health and wealth distribution need to be urgently addressed and these global problems can no longer be ignored by business.

We believe that it is now time to tap into the many wisdoms around the world beyond the

Looking beyond the West for leadership by Sharon Turnbull

39 EFMD Global Focus | Volume 04 | Issue 03 2010

West for leadership

40 www.efmd.org/globalfocus

West that can help to throw light on and address today’s shared global problems.

The global economic crisis has taught us that material growth and wealth creation by and for a few nations, without close attention to the interconnected nature of our world and the growing number of interdependencies within it, is not sustainable.

The exclusive focus by a corporation on the creation of shareholder value, for example, without acknowledging or attending to the impact of its actions on the societies, environments and cultures of the economies in which it operates, is increasingly deprecated.

Christopher Meyer and Julia Kirby in the Harvard Business Review (April, 2010) have called for more transparency in a corporation’s external impact on societies, their so-called “externalities”.

We agree; but would go further. We believe that it is only through tapping into the wisdoms of societies beyond the West that we will find real solutions to the cumulative impact of these externalities.

At The Leadership Trust we have been researching non-Western, Eastern and indigenous leadership wisdoms since 2008. Our research has been exploring questions hitherto unexplored in the leadership field.

We have asked, for example, what wisdoms beyond the West are currently lost or hidden from mainstream view as a result of focusing on a knowledge base that is predominantly derived from one part of the world.

Our research has focused on what insights non-Western traditions can offer to organisations grappling with the challenges facing the world as a result of rapid globalisation and the continually changing digital economy. We have also explored how the leadership wisdoms contained within ancient texts might be brought into focus to help us to address these apparently intractable problems.

For this leadership research we adopted the term “worldly”, influenced by Henry Mintzberg and Jonathan Gosling’s Harvard Business Review article “The Five

We have asked what wisdoms beyond the West are currently lost or hidden from mainstream view as a result of focusing on a knowledge base that is predominantly derived from one part of the world

Looking beyond the West for leadership by Sharon Turnbull

41 EFMD Global Focus | Volume 04 | Issue 03 2010

We have discovered that leadership wisdoms beyond Western-centric perspectives are a highly dispersed body of knowledge, which can best be researched in context via a networked research approach

applying multiple lenses to understanding, interpreting and applying the leadership knowledge or “knowing” found in these cultures (which is transmitted by word of mouth and remains undocumented).

Our research aim has been to engage particularly with those involved in “close up insider” research into leadership in non-Western societies and to build a network of worldly leadership scholars, thereby avoiding as far as possible the trap of attempting to conduct non-Western leadership research through a Western leadership lens.

A Worldly Leadership symposium was convened in spring 2009 in which papers were presented primarily by indigenous scholars on a range of studies including insights into Maasai leadership wisdoms; women leaders in public administration in Libya; Arab leadership and its distinctive differences; and a variety of studies into leadership theory and practice in counties as widespread as China, Turkey, Iran, Germany and Nigeria.

Mindsets of a Manager” (2003), which argued for a shift from a global to a “worldly” mindset.

Instead of looking at the world from a distance, they proposed a focus from close-up on the many different worlds within worlds that make up our globe. Furthermore, they argued that adopting a worldly mindset is not simply about observation; it is also about the way that we engage with and act within and across the world(s). Subscribing to this view, we decided to apply the worldly mindset to the study of leadership.

Our “Worldly Leadership” research initiative has sought to deepen understanding of leadership wisdoms from many different cultures and societies around the world. We have discovered that leadership wisdoms beyond Western-centric perspectives are a highly dispersed body of knowledge, which can best be researched in context via a networked research approach.

This has meant bringing together multiple researchers

We followed this later the same year with the first international Worldly Leadership Summit, hosted in conjunction with partners GRLI (a partnership of EFMD/ UN Global Compact) and Ashridge Business School bringing together 100 leaders, including indigenous leaders, from all corners of the globe and many sectors, including business education.

Two specific projects have also been conducted in order to develop our ideas further.

The first has focused on the nature of sustainable leadership by conducting interviews with NGO and community leaders working in Africa and Asia about the nature of their leadership. The focus was on how they have learned their leadership practices, their role models and teachers, their habits and expectations, the influence of their societal, family and religious beliefs on their leadership decisions, their relationship with followers, their ethical frames and the leadership process as a whole.

The second project was a qualitative study of Indian business leaders conducted together with an indigenous Indian researcher about their leadership journeys, their

42 www.efmd.org/globalfocus

values and beliefs as well as their role models and other societal influences.

A project on Russian leadership in the post-Soviet era is currently underway.

One of our important findings is that the relational and collective nature of leadership appears to be stronger and more intuitive in indigenous and Eastern communities than in the developed world.

For example, in Kenya’s long history of surviving even the worst challenges dealt to it by political and climatic upheaval, the Maasai people have demonstrated a deep understanding of leadership that dates back many years and is embedded in their traditions.

Researching leadership in cultures where the collective or the community has been a key to its survival and sustainability may, we believe, hold some of the keys to finding new ways to conceptualise leadership and leading in this post-crisis and inter-connected world. Many of the ancient philosophical texts also support these ideas.

The findings of these pilot studies are important and these, together with the research findings of our partners in the project convince us to continue the research and extend it to other parts of the globe.

One of our interviewees, Emmanuel, a young Maasai leader, explained: “Within all the community, everybody is trained to be a leader because everybody should be a leader in our community. We feel a sense of responsibility by being in the same age-set.

We feel a sense of responsibility… by being of the same clan.

We feel a sense of responsibility…by speaking one language.

And that’s how we come together and we are proud to be the Maasai.”

Within all the community, everybody is trained to be a leader because everybody should be a leader in our community.

We feel a sense of responsibility...

Through these words, he indicates that group membership is very important but that this membership can be extended outwards in concentric circles from age-set to clan to tribe.

Emmanuel also reveals that the Maasai’s understanding of leadership is a shared and collective process: “We don’t have a king; we don’t have a great leader who dictates things. But the community, the elders, will sit down, will talk and will judge everything.”

In the Maasai, a sense of responsibility is purposefully developed from the earliest age.

Every youth learns leadership skills that focus on collective responsibility, securing the community’s future and on its protection. There is a long-term sense of building the leadership capacity of future generations in order to ensure its continuity that is rarely articulated in Western leadership narratives.

WORLDLY LEADERSHIP SUMMIT

The second international Worldly Leadership Summit took place at The Leadership Trust, Ross-on-Wye, UK from 6-7 September 2010.

The Leadership Trust’s partners for the Summit are GRLI, Ashridge Business School and the British Council. Details can be found at: www.worldlyleadership.org ABOUT THE AUTHOR

Professor Sharon Turnbull is Director of the Centre for Applied Leadership Research at The Leadership Trust.

43 EFMD Global Focus | Volume 04 | Issue 03 2010

7KH +LVWRU\ RI 8. %XVLQHVV DQG 0DQDJHPHQW (GXFDWLRQ ,6%1 $XWKRU $OODQ 3 2 :LOOLDPV 6\QRSVLV 7KLV ERRN GUDZV WRJHWKHU WKH PDLQ LQÀ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¶V /HJDF\ ,6%1 $XWKRU *XLGR 6WHLQ 6\QRSVLV 7KLV ERRN VKRZV WKH OHVVHU NQRZQ VLGH RI 3HWHU 'UXFNHU DV IDU DV KLV YLHZV RQ KLV RZQ LGHDV DUH FRQFHUQHG 'UXFNHU LV PRVW FRPPRQO\ WKRXJKW RI DV D PDQDJHPHQW WKHRUHWLFLDQ XQGRXEWHGO\ WKLV LV WKH PRVW ZHOO NQRZQ GLPHQVLRQ RI KLV ZRUN

$GYDQFHV LQ (QWUHSUHQHXUVKLS )LUP (PHUJHQFH DQG *URZWK ,661 (GLWRUV 3URIHVVRU -HURPH .DW] DQG 3URIHVVRU 7RP /XPSNLQ 6\QRSVLV 7KLV VHULHV SURYLGHV DQ DQQXDO H[DPLQDWLRQ RI WKH PDMRU FXUUHQW UHVHDUFK WKHRUHWLFDO DQG PHWKRGRORJLFDO HIIRUWV LQ WKH ¿HOG RI HQWUHSUHQHXUVKLS DQG LWV UHODWHG GLVFLSOLQHV RI VPDOO EXVLQHVV IDPLO\ EXVLQHVV DQG SRSXODWLRQ HFRORJ\ DV ZHOO DV ¿UP JURZWK DQG HPHUJHQFH UHVHDUFK $GYDQFHV LQ WKH 6WXG\ RI (QWUHSUHQHXUVKLS ,QQRYDWLRQ DQG (FRQRPLF *URZWK ,661 (GLWRU 3URIHVVRU *DU\ /LEHFDS 6\QRSVLV 7RSLFV UDQJH IURP DVSHFWV RI HQWUHSUHQHXULDO EHKDYLRU WR GHWHUPLQDQWV RI HQWUHSUHQHXULDO UHVHDUFK ZLWK FRQWULEXWLRQV IURP WRS VFKRODUV DFURVV WKH 86$ DQG WKH JOREH 7R RUGHU SOHDVH YLVLW KWWS ERRNV HPHUDOGLQVLJKW FRP RIIHU DQG HQWHU WKH FRGH ()0' ZKHQ SURPSWHG WR FODLP \RXU GLVFRXQW

/HDGLQJ LQ 7XUEXOHQW 7LPHV /HVVRQV /HDUQW DQG ,PSOLFDWLRQV IRU WKH )XWXUH ,6%1 $XWKRU 3HWHU /RUDQJH 6\QRSVLV ,Q WKLV ERRN 3HWHU VKDUHV ZKDW KH KDV OHDUQW DERXW OHDGHUVKLS GXULQJ WXUEXOHQW WLPHV 'UDZLQJ RQ KLV RZQ H[SHULHQFHV DQG WKRVH RI RWKHU &(2V LQWHUYLHZHG HVSHFLDOO\ IRU WKLV ERRN 3HWHU LGHQWL¿HV WKH IRXU OHDGHUVKLS FKDUDFWHULVWLFV HVVHQWLDO LQ WXUEXOHQW WLPHV DQG WKH WKUHH OHDGHUVKLS WDVNV WKDW DUH FULWLFDO WR DQ RUJDQL]DWLRQ XQGHU VWUHVV

ZZZ HPHUDOGLQVLJKW FRP ERRNV

(6 ()0' DGYHUW LQGG

5HVHDUFK \RX FDQ XVH

44 www.efmd.org/globalfocus

The current economic and financial crisis has illustrated the increased complexity of the world and means that companies must re-assess their operational agility and explore new ways of coping with change. Kenneth Mikkelsen details some likely responses

Leadership at a crossroads Witnessing how his theory of the origin of species is being played out in today’s business world would probably have fascinated Charles Darwin if he had been alive today.

Evolution is just one way of describing how companies struggle to create a competitive advantage and increase their market share.

But, as Darwin stated, it is not the strongest of the species that survives, nor the most intelligent, but rather the one that is most adaptable to change. In view of the past few years’ economic turmoil, nothing seems more accurate.

Constant change calls for adaptive organisations and leaders who are able to embrace a high level of uncertainty and make swift and wise deviations from their plans.

Jorgen Thorsell, vice-president of international leadership development institute Mannaz, points out that many companies are being forced to reshape their strategies in response to the new economic landscape and that this should include an adjustment of the leadership behaviour exercised before the current crisis. Thorsell believes that the old idea that a leader should have all the answers is not only unrealistic but also potentially dangerous.

“One of the major challenges that lies ahead of us is accepting the fact that leaders may be just as much in the dark as those around them. Leaders should be bringing up difficult questions and then having their team experiment with solutions and move forwards on a trial-and-error basis,” he says.

In February and March 2010 Mannaz in partnership with

Leadership at a crossroads by Kenneth Mikkelsen

Constant change calls for adaptive organisations and leaders who are able to embrace a high level of uncertainty and make swift and wise deviations from the plan as they go along

45 EFMD Global Focus | Volume 04 | Issue 03 2010

46 www.efmd.org/globalfocus

EFMD and two hi-tech multinationals, Canon and AlcatelLucent, brought together representatives of more than 25 international companies to explore and share views, experiences and international best practice concerning adaptive leadership. The main question was how to identify and develop an adaptive approach, in organisations and among leaders, that would enable them to thrive in a complex and interdependent world.

The future of organisational design Big is not always better The predominant business ideology still supports a direct relationship between company size and competitiveness.

However, many companies have paid dearly to find out that this logic has its flaws. Most mergers and acquisitions are based on this presumption however experts estimate that at least half of them fail.

During the two events in Paris and London, Canon, Alcatel-Lucent, and international cement group Lafarge highlighted their approaches. A series of workshops facilitated the dialogue among participants and enabled the sharing of experiences. The sessions focused on outlining the future of organisational design, leadership behaviour and knowledge sharing in a global context.

There is a growing concern that some organisations may be too complex to run effectively. Instead of multi-level, centralised hierarchies, modern, organisational structures must become loose, diversified systems with numerous alliances. More ad-hoc projects will emerge and exist only as long as required. The benefits of enhanced agility include higher revenues, more satisfied customers and employees, improved operational efficiency, and a faster time to market.

The input from participants provided a glimpse into the future and generated a series of scenarios that organisations and leaders must relate to if they do not want to prove Darwin’s theory right and end up like the dinosaurs – extinct and out of business.

The future scenarios that were suggested are:

One consequence of globalisation and the current crisis has been an increased level of anxiety in society. This has led to a renaissance in the value of relationships and loyalty

A reverse stream of knowledge, innovation and values R&D, innovation and design activities carried out in former low-wage countries such as India and China have already led to a reverse flow of knowledge. This is a game-changer that challenges the dominance of the American management approach in the global business environment.

Going global One of the consequences of globalisation and the current crisis has been an increased level of anxiety in society. This has led to a renaissance in the value of relationships and loyalty. Companies that either operate locally or that have a global strategy are winners. Consumers wish to do business with a familiar face. Companies with a profound knowledge of their local market will benefit from developing regional variations of standard products and services.

Looking ahead, more multinationals will operate with dual headquarters, one in the West and one in Asia.

Mind the public Increased government involvement in business is one of the most striking features of the crisis. Governments around the world have enacted massive stimulus packages and bailed out numerous faltering companies.

Inevitably, policy makers will end up making, or heavily influencing, decisions that were once the province of top executives and boards, forcing companies, especially within the financial system, to build response units and form new types of collaborative relationships with public partners.

25 Earlier this year Mannaz and EFMD brought together representatives of more than 25 international companies to explore and share views, experiences and international best practice concerning adaptive leadership

47 EFMD Global Focus | Volume 04 | Issue 03 2010

Leadership at a crossroads by Kenneth Mikkelsen

Leadership behaviour in the future From heroic leaders to ordinary heroes Top-down leadership, in which heroic individuals or charismatic icons play the dominant role in shaping an organisation is no longer adequate or suitable. Instead of acting as the captain of a ship, leaders must serve as the designers of the ship. This also involves recognising that a leader does not always have all the answers.

Support people who question the way business is done Too often, adaptive leaders are marginalised and their good ideas are not adopted because they represent a challenge to standard procedures or traditional ways of doing business.

The workshop participants in Paris suggested that organisations should pay more attention to dissonance as a fertile ground for creativity.

More leaders should challenge assumptions and encourage risk taking as this is likely to reinforce innovation. One way to establish an inquisitive organisation is to ask new employees their opinion about “how things are done” after their first 90 days on the job.

Securing stability and a sense of meaning Employees expect leaders to create stability in a world that is constantly in motion. In order to address changes in the world on both a global and local level, leaders need to exhibit a general interest in society and incorporate knowledge from a broader variety of sources into their daily operations.

In the Western world, especially among young people, employees are expressing a growing interest in whether their job provides them with a sense of meaning or serves a higher purpose. Future leaders should be prepared to address these issues.

Distributed leadership in high demand When organisations are faced with complex problems and dispersed resources leadership needs to be distributed across many players, both within and across organisations and throughout the hierarchy – wherever information, expertise, vision, new ways of working together and commitment reside.

If employees are to exercise autonomy and innovation, orders and rigid hierarchies will not do the trick. If a large proportion of those who contribute to creating value are placed outside the company, leaders cannot solely look inward and expect commands to be followed. What is needed is an internal focus combined with an external approach. Leaders should strive to mobilise and focus efforts by creating new forms of motivation and relationships.

Take risks and give up power Fast and careful reflection is in high demand. The participants emphasised a greater need for establishing smaller and more agile teams that are allowed to make mistakes and operate in a more risk-free setting. The purpose of these agile teams would be to break ground faster and bring in diverse perspectives to challenge “rational” thinking. This would, undoubtedly, challenge some of the basic elements of an organisation such as power, control and authority.

Knowledge sharing and networking in a global context Rehearsing the future Scenario planning will be further integrated into the strategic process. By constructing scenarios companies build a common language and a common understanding of the driving forces and uncertainties that shape the future.

Developing a basic understanding of scenario thinking within an organisation is crucial to systematically testing strategies against unexpected developments.

Complexity calls for co-operation Products and services are becoming increasingly complex.

A single company may not have all the skills required to deliver a competitive product. Organisations must co-operate, find common interests, create common platforms with others and learn to handle a growing interdependence. The value of a product or service will largely depend on how well it interacts with other products and services.

Creating new business Large companies need internal entrepreneurs who can ensure that declining business areas are replaced. Research shows that companies and individuals who successfully and continuously develop new business areas use management techniques that are fundamentally different from the well-known management principles which prevail in more established business areas.

Individual learning versus organisational learning Learning is surrounded by an inherent paradox: anxiety inhibits learning but anxiety is necessary if learning is to take place. Learning anxiety comes from being afraid to try something new out of fear that it will be too difficult, that we will look stupid in the attempt or that we will have to part with old habits that have worked well for us in the past.

There will always be learning anxiety but if an employee acknowledges the need to learn then the process can be greatly facilitated by good training, coaching, group support, feedback and positive incentives.

Learning anxiety comes from being afraid to try something new out of fear that it will be too difficult or that we will look stupid in the attempt ABOUT THE AUTHOR

Kenneth Mikkelsen is a Danish journalist and writer based in Paris. He is the founding director of Controverse, a Scandinavian communications consultancy specialising in cultivating and promoting stories about leadership, management and strategy.

48 www.efmd.org/globalfocus

The probelm faced by HR is that for years we have developed our professional skills into disciplines that fit nicely into a variety of silos such as marketing, finance, HR, operations, purchasing and so on

fi

purchasi marketin g

operation s HR

HR and the new world business order by Ken Moore

inance

ing

49 EFMD Global Focus | Volume 04 | Issue 03 2010

HR and the new world business order The world has changed and is changing even more. This is placing tremendous pressures on employees and the HR function needs to respond to help them. Ken Moore offers some suggestions on how it might do so

What in the world is going on here? In July 2008 oil prices were hitting $150 a barrel with economists confidently predicting $200+ barrels before the end of the year. In January 2009 it was around $40 a barrel.

In April 2010 it was hovering around $85 a barrel.

The American stock market has lost almost half its value during the past 18 months with a 52-week spread falling between a high of 13,780 to a low of 7,449.

General Motors, Ford and Chrysler go to Washington and beg for money to stay afloat while closing plants and laying off thousands of people and continuing to operate with an apparently flawed and restrictive business plan. Chrysler is then bought by Fiat.

Meanwhile, financial companies like Fannie Mae and Freddie Mac, ostensibly backed by the American government, imploded. And blue-chip stocks such as American Express and General Electric each dropped in value by more than 50%.

Citibank, once thought of as too big to fail, is failing. American labour laws, created during the 1930s and only slightly modified since, seem anachronistic in today’s globally wired, 24/7 world of intense, nay ruthless, global competition on a very uneven playing field.

What is the human resources community to do? A lot, actually.

Despite all of the gloomy forecasts by the media, there is optimism that the American economy and its people will battle this storm and emerge

50 www.efmd.org/globalfocus

from it much stronger, wiser and smarter. We always have. But not without a lot of blood, toil, sweat and tears – and a complete re-evaluation of how we conduct business in today’s world.

David Ulrich, a professor at the University of Michigan, is a leading proponent of progressive human capital management.

He states: “The new human resources is not defined by what it does but by what it delivers – results that enrich the organisation’s value to customers, investors and employees”. Dr Ulrich’s thesis is that human resources work does not begin with HR. It begins with knowing the business.

Herein lays the crux of the problem and the seeds of its solutions.

The problem For years we have developed our professional skills into disciplines that fit nicely into a variety of silos such as marketing, finance, HR, operations, purchasing and so on. Our organisations and universities have developed world-class experts in each of those disciplines. As long as a company was healthy, those disciplines could exist side by side and everyone went about his or her happy business.

But then the world economic order changed and a lot of specialists lost their jobs to competing entities and technological advancements.

Transactional work was digitised and outsourced. Sales people were replaced by online marketing and re-supply software. Payroll and benefits administration were outsourced to other companies across the street, across the country and across the oceans. R&D centres were established in India, China and other countries in order to tap into those burgeoning economies and talent pools.

As a result of this downsizing of individual and local silos of expertise, the remaining employees had to do more work in areas unrelated to their particular professional discipline. Suddenly, HR managers and other department executives found themselves in decision-making positions in which they did not have the standard training, background or experience.

As competition for above-average employees increased, organisations and government employers began clamouring for people who could think across functional lines and who possessed a sharp knowledge of multiple disciplines. They began to ask for graduates and experienced people who possessed world-class business skills first and who also possessed an expertise in one or more of the subordinate functions.

In one example, corporate recruiters at the State University of New York at Albany routinely ask the candidates to describe how they would help the company and its clients solve complex problems in multi-disciplinary teams and in multi-cultural settings.

CEOs began asking their subordinate leaders to revise their work strategies so that their work more directly contributed to the performance metrics of the organisation. In the HR field, in addition to their traditional employee focus, executives began to consider the needs of the investors in the company and the customers who bought their products or services and kept the company in business.

This is a huge departure from the norm. Investor relations used to be confined to the finance and executive departments. Customer relations issues used to be confined to the customer service departments. Not anymore.

Employees in other functional disciplines began to develop expertise in additional business skills that improved the value of their own work

51 EFMD Global Focus | Volume 04 | Issue 03 2010

HR and the new world business order by Ken Moore

The solution As a result, training programmes began to proliferate as non-financial people began to see the need to understand how corporate finance works and to relate their work directly to the ability of their employer to stay in and grow the business.

Concurrently, employees in other functional disciplines such as marketing and procurement began to develop expertise in additional business skills that improved the value of their own work.

Require every functional leader to conduct a SWOT analysis of their department. (This is usually easier said than done) What are the Strengths of my department versus the strengths of my competitors in the same field – and why does it matter?

What are the Weaknesses of my department versus my competitors – and why does it matter?

What are the Opportunities that we can exploit to improve our competitive advantage and positively impact our financial condition?

In a regional bank headquartered in upstate New York, for example, branch managers are not selected for branch What are the Threats affecting not only my company but the industry as a whole, for example energy costs, political/legal banking duties until they have completed a series of requirements, credit, job security and so on assignments in several departments such as trust, HR, loan operations and finance.

Organisations began to realise the need for professional development beyond the normal scope of responsibilities.

Business literacy has become a focus of strategic thinking.

Breaking out of individual silos of expertise and crosstraining in other functional areas is a key step to improved performance, opportunity and job security.

Examine your business world from alternative perspectives.

Identify the commonality of the problems and seek out the best solutions from multiple sources.

Just because you work for an airline does not mean that you are restricted to the airline industry for possible solutions.

A bank in suburban New York once hired the top salesman from a nearby K-mart store to be its branch manager. Within Here are just a few tactics that we have suggested to clients a year that branch was out-performing the company’s other so that they may survive and prosper in the new world order: branches in the area.

Make business literacy of all your employees a priority.

Teach your employees about your business: How does your company make money?

Who are your customers and why do they buy from you?

Why do they buy from your competitors?

What pressures are your customers facing and how can you help them address their needs?

Map the linkage between each employee’s work discipline (for example HR or logistics) to the performance metrics established for the company

Teach your employees to develop their competitive intelligence analysis skills Define and understand your firm’s industry Identify the critical elements affecting your industry. In the automobile industry, for example, critical elements may include petrol prices, environmental requirements, design features, the availability of alternate forms of transportation and credit accessibility

Kodak, a manufacturer of cameras and photo equipment, examined the distribution processes of LL Bean, a worldclass mail-order catalogue company, to solve a distribution problem.

When you describe your situation, you will be amazed at how many people have similar problems in totally non-related businesses.

Share best practices with everyone. Lunchtime programmes can be good opportunities to share information and present new concepts for discussion. Make a game of it.

Teach your people the fundamentals of your business and then ask them for their recommendations on how to improve the condition of the company.

The more you endow your employees with upgraded skills and abilities, the more passionate they will become about their work and creating opportunities for advancement and enhanced job security.

ABOUT THE AUTHOR

Ken Moore is President of Ken Moore Associates, a management consulting group

Recognise and acknowledge the strengths and weaknesses based in Schenectady, NY, and a member of the Society for Human Resources Management and its local chapter CRHRA. of your competitors and how they are responding to the critical elements that they have defined He is also an adjunct professor at the State University of New York at Albany and at the Union Graduate College where he teaches graduate and undergraduate business courses in strategic management. He may be reached at: kmoore01@nycap.rr.com www.kenmooreassociates.com.

52 www.efmd.org/globalfocus

Sue Newell describes a new doctoral programme that attempts to use the best of both American and European approaches

A matter of degrees

A doctoral programme for the 21st century Back in 2002, it was predicted that within five years there would be a dire shortage of business faculty. This prediction was based on an analysis of estimates of retirement and growth in business education that identified an expected gap between the number of business PhDs being produced in doctoral programmes and the need for PhD professors.

While the recession and the use of cheaper adjunct faculty may have mitigated the shortage in the short term, it is still the case that shortages are likely because of the fact that there is such a wide gap between the numbers of universities and colleges who recruit PhD business faculty and the much smaller numbers of these same institutions with doctoral programmes. This may come as a surprise in Europe or Australia/Asia where most universities with business or management schools also have a doctoral programme.

This is not at all the case in America, where the majority of accredited business schools do not have an associated doctoral programme, largely because of the cost of such programme.

In Europe (and perhaps Asia) a doctoral programme is not necessarily considered a cost and may even be seen as an income-generator. Part of the reason for this difference is related to the rather different approach to doctoral education evident in America compared to much of the rest of the world.

In America, a doctoral programme in a business area typically funds students (most covering tuition costs and many also offering living stipends that come with greater or lesser expectations of teaching/research assistance in return).

It also typically involves two years of a taught programme before a student even begins his or her dissertation research.

This accounts for the fact that so many students (estimates of up to 80% have

A matter of degrees: A doctoral programme for the 21st century by Sue Newell

Until relatively recently, many entering a doctoral programme were given very little guidance, even in methodological understandings, and instead were expected to DIY their research

53 EFMD Global Focus | Volume 04 | Issue 03 2010

been suggested although it is difficult to get exact figures) in America are ABD (all-but-dissertation), a designation that probably means very little to the rest of the world where the dissertation is the PhD. In America, however, it means that the student has successfully completed the course work (and probably also passed a comprehensive exam at the end of the course work period) but has not subsequently successfully defended a dissertation (and probably not even a dissertation proposal).

This difficulty should be put in the context of the total education experience in many American universities. Many undergraduate and graduate students are not required to complete a dissertation as part of their degree and instead take a diet of courses where assignments are fairly tightly prescribed.

Many students entering a doctoral programme in America, therefore, have never before been expected to identify their own research agenda, conduct their own independent research and then write a substantial thesis. Little wonder perhaps that so many do not make it, especially when this lack of experience is coupled with the need to find a supervisor in the post-coursework stage (supervisors are typically not assigned until the dissertation stage). Supervisors will be interested in students with some good ideas about a research agenda (that is to say, ideas related to their own interests) but students may flounder to create these ideas in the absence of supervision, creating a vicious circle.

Europe, and perhaps other parts of the world, on the other hand, does not necessarily have it right either. True, most programmes will only admit a student where there is a supervisor identified who they will be assigned to. But the development of the student’s academic knowledge and skills is often rather precarious.

Until relatively recently, many entering a doctoral programme were given very little guidance, even in methodological understandings, and instead were expected to DIY their research. More recently, many universities have now introduced a year of coursework, largely focusing on research methods and the philosophy of social science issues.

But this seems to vary quite a lot and there are few disciplinebased courses included. This seems to be based on the presumption that disciplinary knowledge has either already been acquired in a masters programme or can be acquired by self-study. The self-study option ignores the importance of having broad knowledge within one’s discipline (whether it be marketing, management, IS, accounting, strategy or whatever) since a student will focus on reading related to their specific dissertation topic.

Knowledge acquired at the masters level is perhaps more relevant, especially where masters programmes are

54 www.efmd.org/globalfocus

This theme recognises that rapid technological change is theoretically oriented; but not all students have a masters in the specific discipline area where they are taking their PhD the hallmark of 21st century society. The effects of these nor are all masters programmes very academically focused. changes on both business and society are immense, with consequences difficult to predict in advance and often With this background in mind, we decided at Bentley University unintended. The PhD at Bentley encourages students to that we would create a new doctoral programme that took engage in rigorous research that critically examines the what we considered the best ideas from both camps and complex relationships of reciprocal causality among then added some of our own unique features. technology and business and society.

We wanted to combine the best features of European The programme is designed to ensure that students gain doctoral programmes, which stress mentoring relationships an in-depth understanding of their chosen discipline/ with faculty and independent research, with the best features subject area but in addition it provides students with a of American doctoral programmes, which emphasise the broad educational base through our thematic courses as acquisition of subject-based and methodological knowledge. well as equipping them with the philosophical underpinning To these we added two new elements. and the tools and techniques to conduct quality businessrelevant research. The doctoral programme thus consists First, since we recognised that business problems do not of courses outlined in the table opposite. usually come in tightly defined disciplinary chunks we decided to create a programme that combined the analytical, While the doctoral programme is new and we are still communicative, creative, technological and problem-solving tweaking things as we learn, we have been encouraged by strengths of the business disciplines and the arts and sciences the response from our students, our potential students and through an inter-disciplinary curriculum. by our colleagues when we have described the programme.

We were able to do this because Bentley University is actually a university within a business school since we have arts and social science departments. This is because of the need for a general education requirement at the undergraduate level (another distinction between American higher education and many other parts of the world where specialisation happens much earlier).

We have managed to attract students from a wide range of countries and with good academic backgrounds, creating a nice cohort feel to our PhD group. Our students have spent semesters at universities in other countries (IE in Spain, for example, and the University of New South Wales in Australia) and we host a variety of PhD visitors who help to ensure that we maintain a vibrant international PhD community.

Second, we identified what we considered a weakness on both sides of the Atlantic in relation to teaching preparation.

We provide a teaching workshop covering pedagogical and classroom management issues for the first two years, followed by actual teaching experience (students are on a 1-1 load after their second year) that is developmentally reviewed to facilitate continuous improvement.

Moreover, we were recently admitted into the European Doctoral Programmes Association in Management and Business Administration (EDAMBA) community (the first American doctoral programme to do so). We sought this membership in order to provide an even wider range of international opportunities for our students.

In terms of the doctoral programme itself, we have two distinct PhD degrees – a PhD in Business and a PhD in Accountancy. The two degrees share common methodology courses but each has a unique core of subject-based knowledge. The two degrees also share a thematic focus on business, technology and society – which broadly defines Bentley’s research strengths.

I am sure that there will continue to be many doctoral programme variants in the future. But identifying different aspects of these that can then be tailored to the unique context of any given university that is thinking about either starting or modifying a doctoral programme is hopefully helpful.

55 EFMD Global Focus | Volume 04 | Issue 03 2010

A matter of degrees: A doctoral programme for the 21st century by Sue Newell

We have managed to attract students from a wide range of countries and with good academic backgrounds, creating a nice cohort feel to our PhD group

Type of Course

Accountancy PhD

Business PhD

Core subject-base courses

Managerial Control

Organisation Theory

Auditing and Assurance

Economic Theory

Financial Accounting

Information Systems

Judgement and Decision-Making Economic Theory

Thematic courses

Plus two additional courses in a specialised disciplinary area such as marketing or strategy

The two degrees share common methodology courses but each has a unique core of subjectbased knowledge

Globalisation Ethics and Social Responsibility

Methods & philosophy courses Philosophy of the Social Sciences Quantitative Research Methods Qualitative Research Methods Quantitative Analysis 1 Quantitative Analysis 2 Quantitative Analysis 3 or Qualitative Analysis Teaching seminars

Teaching Workshop (first 2 years) followed by teaching 1-1 load

Dissertation work

Specialised research focus

FURTHER INFORMATION

For more information about the doctoral programme at Bentley University please visit: www.bentley.edu/phd or contact Sue Newell at: snewell@bentley.edu ABOUT THE AUTHOR

Sue Newell is Director, PhD Programs, and Cammarata Professor of Management at Bentley University, Waltham, Massachusetts, USA

56 www.efmd.org/globalfocus

From dull & geeky to sexy & extreme?

The image of management accountants and controllers has undergone major change. Credibility, prudence and the obligation to ask questions have been replaced by initiative, drive and ‘full-speed ahead’, according to Hanne Nørreklit

From dull and geeky to sexy and extreme? by Hanne Nørreklit

57 EFMD Global Focus | Volume 04 | Issue 03 2010

In light of the financial crisis it is striking that the image of accounts and finance departments has become so extreme The advertisement features a scantily clad dominatrix in red leather and black boots biting a leather whip under the heading ‘Whip your expenses into shape’. The advertisement – from the British software firm Requisoft – ran in Britain’s leading magazine for management accountants and controllers Financial Management.

This is just one of many examples of how management accountants and controllers are being presented as having escaped the oppressive dullness traditionally associated with their profession. But are they also in the process of throwing the credibility that is so important to the profession out the window?

Seen in light of the financial crisis and the many scandals involving irresponsible accounting practices and lack of financial control, it is striking that the image of accounts and finance departments has become so extreme.

Our paper for Accounting, Auditing & Accountability Journal (see box on the following page) analysed software advertisement in Financial Management from 1970 up to the present day to assess how the image of management accountants and controllers has changed over time. We found that in the 1970s and 1980s the dominant image was of the responsible and rational controller; today the controller is portrayed as a hedonist and extreme person in search of the limelight.

We examined how the advertisers communicate to people in the profession. While we do not know how many management accountants and controllers actually display extreme and hedonistic behaviour we do know that they are being encouraged to do so and that this encouragement is part of the practice of the profession. And this concerns us.

In addition to the above example, other advertisements speak to hedonistic desires, suggesting that a controller can pursue rewards and achieve success without having to sacrifice anything. One example is a large carrot featured in an

70s+80s In the 1970s and 1980s the dominant image was of the responsible and rational controller; today the controller is portrayed as a hedonist and extreme person

58 www.efmd.org/globalfocus

advertisement for a software system that claims to improve earnings by 50% without anyone having to do anything apart from install the software in question. Other advertisements show people (presumably controllers) parachuting out of planes and off mountaintops on skis – encouraging them to “open up and let loose”.

The advertisements encourage the reader to put his or her own pleasure first instead of the long-term survival of the company. And they are not alone but are just part of a hypermodern social trend that glorifies extreme pleasure and narcissism.

Encouraging this new image is problematic because it makes it difficult for companies to depend on their controller and the braking function that traditionally accompanies such a position in the form of questioning what is really possible.

Another aspect of this social trend is the idea that action is hypermodern while reflection is passé. But there is a serious need for both action and someone to ask questions. The financial crisis has brought to light innumerable examples of the consequences of not questioning whether people really can do what they claim.

In Iceland especially, but also in Denmark and other countries, the inability of economists to be persistent and ask questions has had fatal consequences. Icelandic Kaupthing Bank and IT Factory are examples.

Even though companies have reason to be concerned about an “alpha-male” controller – especially today – there is also reason to be pleased on behalf of the profession. This new image is also an indication of the fact that the finance and accounting profession are more involved at management level. More controllers are part of top management and have a say in strategic decisions.

This is a good thing if it can attract new talent and give the profession greater authority. The problem is if people, in their desire for influence and to be heard, put their credibility on the line in the process.

There are indications that qualities such as humility, personal integrity and the ability to admit mistakes are gaining traction

From dull and geeky to sexy and extreme? by Hanne Nørreklit

59 EFMD Global Focus | Volume 04 | Issue 03 2010

The financial crisis has brought to light innumerable examples of the consequences of not questioning whether people really can do what they claim THE RESEARCH

This article is based on “The image of accountants: from bean counters to extreme accountants” published in Accounting, Auditing & Accountability Journal and “Professional accounting media - accountants handing over control to the system” published in Qualitative Research in Accounting and Management. They were co-written by Gudrun Baldvinsdottir from Göteborg University, John Burns from the University of Exeter, Hanne Nørreklit, Aarhus School of Business, Aarhus University and Robert W Scapens from the University of Groningen in the Netherlands and the University of Manchester.

I have taught financial management to students at Aarhus School of Busines for three years and understand perfectly well the desire many have to escape the image of the controller sitting in the corner crunching numbers and not being heard.

The longing to be heard and to have influence is a part of post-modern society. You see it all over, and it is not necessarily problematic in itself. In fact, it is very important that the accounting and finance function also sits at the top table. It becomes a problem when responsibility and credibility are suddenly no longer valued in an accounting and finance function, where these qualities are particularly important. It is also true that the financial crisis has made some of the traditional values more fashionable again.

There are indications that qualities such as humility, personal integrity and the ability to admit mistakes are gaining traction.

If these values can be linked with the more active role of the management accountant and controller it would be a huge boon for the profession – and for the business community.

It is possible to be both geeky and sexy.

The researchers ploughed through every issue of Financial Management from 1970 until 2008 and selected eight advertisements for further analysis. The article presents the discourse analyses of four advertisements – one from each decade.

The Chartered Institute of Management Accountants (CIMA), which funded the study, supports a new trend within management accounting known as “extreme accounting”.

The trend – which encourages management accountants to go to extremes to challenge themselves and their profession – began in Britain but has followers all over the world.

On the website extreme-accounting.com, CIMA writes that they support the movement because “it’s time people stopped pigeonholing accountants as ‘speccy’” and because CIMA “likes to show them in a truer light”.

ABOUT THE AUTHOR

Professor Hanne Nørreklit works in the Department of Business Economics, Aarhus School of Business, Aarhus University, +45 8948 6377 or email: hann@asb.dk

60 www.efmd.org/globalfocus

Tadao Onaka believes that three dilemmas facing business schools and business graduates in Japan may threaten the future of the MBA degree

Can the MBA survive? by Tadoa Onaka

61 EFMD Global Focus | Volume 04 | Issue 03 2010

Can the MBA survive? An answer to this vital question can be found in three dilemmas business schools in Japan currently face. These dilemmas indicate that the setbacks to its reputation suffered recently by the MBA degree result largely from its own DNA, the result of its birth in America in the early 20th century.

The first dilemma is apparent from this comment by a Japanese MBA graduate: “The more I try to implement what I have learned, the more I feel isolated within my organisation and company.”

For more than half a century Japanese business has lagged way behind other countries in utilising MBA graduates as core management resources

For more than half a century Japanese business has lagged way behind other countries in utilising MBA graduates as core management resources. While Japanese companies are rather aggressive in sending their young employees and middle managers to overseas business schools, the main purpose has been so that they learn foreign competitors’ ways of thinking and develop information networks in foreign business communities.

Those who return to Japan find they have lost two years in terms of becoming a core member of their company. This happens similarly for MBA graduates of schools in Japan.

Is this just a simple cultural difference? Yes it is. But it has multiple aspects. This is more than just a conflict between individualism and collectivism; it is a conflict between an independent relationship and an inter-dependent relationship; it is also a conflict between profit-maximising for investors and value-dedicating for societies.

The second dilemma MBA graduates and business schools in Japan generally experience can be understood from the questions asked by the CEOs of Japanese companies: “Why do so many CEOs with an MBA – and their companies – fail in America?”

The third dilemma comes from American and European business schools’ own criticism and alarm over the value of the MBA: “What has gone wrong to cause such compliance and governance problems by CEOs?” The MBAs 20th century DNA and its influence The DNA extracted from the above three dilemmas can be classified as follows: DNA 1: The MBA is based on a culture of individualism The first dilemma indicates that the origin and root of business schools’ mission, programmes and operation is the culture of individualism dominant in America and other Western countries.

The MBA methodology developed in this culture.

Consciously or unconsciously it prioritises independence over inter-dependence, prefers high return on investment (ROI) to low ROI if the risk is the same.

62 www.efmd.org/globalfocus

DNA 2: The MBA assumes a high-growth economy not a sustainable one The “scientific management” approach developed

by American engineer Frederick W Taylor early in the 20th century (effectively the MBA’s “operating system”) assumes a high-growth economy. It focuses on pursuing ROI and tends to postpone creating value.

Especially, it avoids long-term investment if the ROI is too long to secure harvesting based on scientific calculation and logical evaluation.

A good example is a clear trend that shows that, for the most part, the research and development efforts of American corporations have been shrinking continuously since the late 1990s when they were forced by Wall Street to focus more on return on equity (ROE).

Moreover, the MBA’s DNA of scientific and logical rationalisation has overlooked and forgotten the importance of motivating the emotions of people and organisations.

Certainly during the 20th century America developed a tremendous number of theories of organisational behaviour and leadership, culminating in Daniel Goleman’s concept of emotional intelligence.

However, in a sustainable growth economy, DNA 2 – the lack of both long-term investment and failure to motivate people – is enough to kill corporations.

DNA 3: Excessive desire for financial welfare This DNA has been particularly exposed since the late 20th century. Since then, not a few American CEOs and managers with MBA degrees have turned to the pursuit of financial welfare. The word “greed” has become widely used.

Not just administering but learning In post high-growth economies, new competencies for creating value and motivating people beyond financial welfare should be the first priority. But they have not been built into the MBA’s administrating competency.

The reason for this is because during the period of high economic growth, organisations and societies did not need them. The high-growth economic environment alone was enough to motivate people.

And worse still, administrating methods, by nature of their controlling, ruling and standardising tendencies, will often work against creating change and motivating people and make people in post high-growth economies rather conservative and discouraged.

So has the role of the MBA and business schools come to an end in a time of sustainable growth economies?

Learning is complementary to administrating in that while administrating is about controlling the external with internal information, learning is about growing the internal with external information The answer is no. There is still a jewel within the MBA and business schools. It is the learning competency.

Now is the time for all MBA holders to recognise and consciously exercise the implicit competency of learning that has steadily grown behind the explicit competency of administrating at business schools.

MBA schools have always been learning organisations and can be even more so if they wish. MBA students at business school learn shared vision, personal mastery, mental models, team learning and, Peter Senge’s “fifth discipline” in his model of the learning organisation, systems thinking.

So, according to Dr Senge’s definition, MBA schools are learning organisations. They offer precious and rare learning opportunities in the current world where, especially in corporations, administrative culture overwhelmingly dominates and pushes out learning opportunities.

To summarise, MBA students consciously master administrating competency but also, unconsciously, learning competency within the learning environment and culture of business schools.

New frontier MBA competencies by learning Learning is complementary to administrating in that while administrating is about controlling the external with internal information, learning is about growing the internal with external information.

Creative envisioning and long-term investing Learning new demands from changes that threaten past success develops creative visions while administrating eliminates those threats and avoids changes.

Administrative problem solving will never go beyond this limit as long as it keeps filling the gap between the new reality and the past success.

Also, learning the needs of future societies will make possible long-term investments as shown by GE’s Ecomagination, the Obama Administration’s Green New Deal and various technology innovations at medium-sized and small manufacturing companies in Japan.

Can the MBA survive? by Tadoa Onaka

EQ based empathy communication and empowering Learning the emotional needs of people and organisations makes possible empathy communication and empowering while administrating risks weakening them.

Learning the emotions of others makes possible EQ communications while administrating relies only on IQ-based logical ones.

Learning inter-dependence among members of organisations and societies, which is exactly what Dr Senge calls “systems thinking”, goes beyond the limit of the administrative thinking of “problems are out there and not mine” and brings harmonious relationships to organisations and societies.

New global leadership mission and new capitalism Learning global diversity enlarges the possibilities of synthesising mutual dedication and harmonious relationships with diversified wisdom and value while administrating tends to utilise global diversity to maximise the consolidated bottom line of financial reports.

Also learning the current reality that the monetary economy diminishes the actual economy would open many peoples’ eyes and stimluate calls for a new capitalism system.

Course examples for learning In NGS, the Graduate School of Nagoya University of Commerce and Business Administration in Japan, three courses on organisational behaviour and leadership have been introduced since April 2009 in order to let students recognise the limits of administrating and also to realise specific actions of learning to overcome those limits: Executive Leadership, Innovation of Learning Organisations and Global Leadership. The content of these courses is discussed below.

Executive Leadership This course is designed to learn the leadership model and its utilisation in order to solve the dilemmas middle and executive management currently face.

The pedagogical model is: — First understand that administrative competency alone cannot respond to all the expectations of management in the 21st century — Then, learn, through examining participants' real cases, the necessary conditions to develop the other competencies: Change Envisioning, Empathy Communication and Supportive Coaching for the next generation of corporate leaders

63 EFMD Global Focus | Volume 04 | Issue 03 2010

— Finally, learn the cause and origin of the problems currently besetting stock market capitalism. Also discuss solutions to allow the manufacturing sector and society to realise the need for longterm investment for technology innovation and R&D caused by the 20th century's eccentric monetary capitalism.

Innovation of Learning Organisations This course is to learn the requirements for corporate leadership and learning organisations to pursue innovation.

— First, with the “Apple Computer 2006” case, participants analyse the requirements for corporate leadership to pursue innovation. Also, with cases of medium to small company innovations in Japan, the major enablers to allow leadership and organisations to learn and innovate are learned — Then, with the “3M Profile of Innovative Organisation” case, learn requirements to develop learning organisations with Clayton Christensen's "Innovator's Dilemma", observe internal barriers to innovation and discuss necessary leadership and organisation solutions to those barriers — Finally, analyse the origin and history of monetary capitalism, discuss external barriers to innovation and necessary solutions to them. Specifically, discuss what large and medium to small companies should do as well as what the government of Japan and the central bank of Japan should do in order to remove those barriers Global Leadership Through case studies of Toyota USA, Johnson & Johnson and Nissan, together with Hofstede‘s model, the first half of the course is designed to discuss requirements for global leaders to learn flexibly and empathise with globally diversified cultures and organisations.

Then, with two US Presidents' historical speeches, some excerpts from Japan’s Prime Minister Ikeda's paper on Japan’s economic development and J K Galbraith’s papers, discuss the missions and historical perspectives required for global leaders to utilise money and not to be utilised by money.

Finally, discuss requirements for Japanese society and companies to dedicate to the global world through technology innovation.

ABOUT THE AUTHOR

Professor Tadao Onaka is a faculty member of NUCB Graduate School, Nagoya University of Commerce and Business Administration, Japan

64 www.efmd.org/globalfocus

EFMD 2010 | www.efmd.org/conferences

Upcoming events October 2010

October 2010

November 2010

December 2010

January 2011

2010 EFMD Executive Education Meeting

EFMD-EURAM Research Leadership Programme – Cycle 2

Corporate Advisory Seminar

EFMD-EURAM Research Leadership Programme – Cycle 2

Meeting of Deans & Directors-General

DATES / VENUE

16 November Brussels, Belgium

DATES / VENUE

27-28 January 2011 Lyon, France

DATES / VENUE

10-12 October Berkhamsted, UK THEME

28-29 October Brussels, Belgium

The Role of Executive Education in Developing and Inspiring Leaders for the Future

THEME

HOST

HOST

Ashridge

EFMD

EPAS Accreditation Seminar DATES / VENUE

15 October Athens, Greece THEME

Interpretation and practical application of the EPAS Standards and Criteria

Creating Research Leadership in Europe –Module 1

EFMD Advisory Seminar DATES / VENUE

26 October Brussels, Belgium THEME

Internationalisation of Business Schools HOST

EFMD

DATES / VENUE

THEME

Engaging Managers in Employee Development in the workplace HOST

EFMD

HOST

EFMD Advisory Seminar DATES / VENUE

23 November Brussels, Belgium THEME

Intercultural Management: International Cooperation and Project Management in Business Schools HOST

ALBA Graduate Business School

EFMD

DATES / VENUE

21-22 October Dusseldorf, Germany THEME

L&D Programmes as an Engine for Innovation and Change – Project Based Learning, and the use of Real Cases HOST

ERGO Versicherungsgruppe AG

THEME

Creating Research Leadership in Europe – Module 2

HOST

Sharing Best Practice CLIP Workshop

09-10 December Brussels, Belgium

2010 EFMD Conference in the MENA Region

EFMD 2010 EFMD Conference on Master Programmes DATES / VENUE

13-15 December Barcelona, Spain THEME

The MSC Lifecycle HOST

EADA Business School

DATES / VENUE

THEME

What Deans Are Interested In...

HOST

EM Lyon Business School

February 2011 EFMD-EURAM Research Leadership Programme – Cycle 2 DATES / VENUE

16-18 February Brussels, Belgium THEME

Creating Research Leadership in Europe – Module 3 + Alumni Day HOST

EFMD

DATES / VENUE

28-30 November Dubai, U.A.E. THEME

Creating International Impact with Programmes: Management Education in the MENA Region followed by EPAS and EQUIS Accreditation Seminars HOST

University of Dubai

For more detailed information, please visit our website www.efmd.org under conferences and learning groups or email info@efmd.org

Written by Jonathan T. Scott Reviewed by Walter R. Stahel, Hunter Lovins and David Grayson

The Sustainable Business Taking the first steps toward understanding, implementing and managing sustainability from a cost/profit perspective.

5IF &NFSBME &'.%

0VUTUBOEJOH %PDUPSBM 3FTFBSDI "XBSET *OUFSOBUJPOBM SFDPHOJUJPO BOE DBTI BXBSET GPS UIF CFTU EPDUPSBM SFTFBSDI

&'.% BOE &NFSBME TFFL UP DFMFCSBUF FYDFMMFODF JO SFTFBSDI CZ TQPOTPSJOH UIF 0VUTUBOEJOH %PDUPSBM 3FTFBSDI "XBSET "XBSE XJOOJOH FOUSJFT XJMM SFDFJWF B DBTI QSJ[F PG $ PS DVSSFODZ FRVJWBMFOU B DFSUJmDBUF B XJOOFSTh MPHP UP BUUBDI UP DPSSFTQPOEFODF BOE UIF QSPTQFDU PG BO PGGFS PG QVCMJDBUJPO JO UIF TQPOTPSJOH KPVSOBM o FJUIFS BT B GVMM QBQFS PS BO FYFDVUJWF TVNNBSZ o BU UIF EJTDSFUJPO PG UIF &EJUPS T *O BEEJUJPO B OVNCFS PG )JHIMZ $PNNFOEFE "XBSET XJMM CF CFTUPXFE 5IJT ZFBS UIFSF BSF DBUFHPSJFT

A critically acclaimed book designed to strengthen the world’s business communities.

Real wealth (not boom and bust), job security, higher wages, an increase in the quality of life – all of these are within reach according to a new guide that explains how long-term, sustainable business practices both save and make money.

Published by the EFMD, the book is designed to help businesses generate long-term profits, create jobs, and optimise resources.

The Sustainable Business can be downloaded free from the EFMD website: www.efmd.org Printed soft-bound copies of the book can be ordered (at-cost) from: www.lulu.com Further information: Matthew Wood Director of Communications, EFMD: matthew.wood@efmd.org Jonathan T. Scott: jonathan_t_scott@hotmail.com

&EVDBUJPOBM MFBEFSTIJQ BOE TUSBUFHZ $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG &EVDBUJPOBM "ENJOJTUSBUJPO

.BOBHFNFOU BOE HPWFSOBODF $BUFHPSZ TQPOTPSFE CZ .BOBHFNFOU %FDJTJPO

)PTQJUBMJUZ NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ *OUFSOBUJPOBM +PVSOBM PG $POUFNQPSBSZ )PTQJUBMJUZ .BOBHFNFOU

.BSLFUJOH SFTFBSDI $BUFHPSZ TQPOTPSFE CZ &VSPQFBO +PVSOBM PG .BSLFUJOH

)VNBO SFTPVSDF NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ 1FSTPOOFM 3FWJFX *OGPSNBUJPO TDJFODF $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG %PDVNFOUBUJPO *OUFSEJTDJQMJOBSZ BDDPVOUJOH SFTFBSDI $BUFHPSZ TQPOTPSFE CZ "DDPVOUJOH "VEJUJOH "DDPVOUBCJMJUZ +PVSOBM ,OPXMFEHF NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG ,OPXMFEHF .BOBHFNFOU -FBEFSTIJQ BOE PSHBOJ[BUJPO EFWFMPQNFOU $BUFHPSZ TQPOTPSFE CZ -FBEFSTIJQ 0SHBOJ[BUJPO %FWFMPQNFOU +PVSOBM -PHJTUJDT BOE TVQQMZ DIBJO NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ *OUFSOBUJPOBM +PVSOBM PG 1IZTJDBM %JTUSJCVUJPO -PHJTUJDT .BOBHFNFOU

0QFSBUJPOT BOE QSPEVDUJPO NBOBHFNFOU $BUFHPSZ TQPOTPSFE CZ *OUFSOBUJPOBM +PVSOBM PG 0QFSBUJPOT 1SPEVDUJPO .BOBHFNFOU 1SPQFSUZ JOWFTUNFOU BOE mOBODF $BUFHPSZ TQPOTPSFE CZ +PVSOBM PG 1SPQFSUZ *OWFTUNFOU BOE 'JOBODF 'PS GVMM EFUBJMT QMFBTF WJTJU XXX FGNE PSH BXBSET PS XXX FNFSBMEJOTJHIU DPN BXBSET PS DPOUBDU .BUUIFX 8PPE NBUUIFX XPPE!FGNE PSH PS %FWPO #MBLF ECMBLF! FNFSBMEJOTJHIU DPN

www.efmd.org

Volume 04 | Issue 03 2010

EFMD Global Focus

EFMD aisbl

Rue Gachard 88 – Box 3 1050 Brussels, Belgium

Ashridge’s Kai Peters worries about where business schools are going

Volume 04 | Issue 03 2010

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

Email: info@efmd.org

DEAN BERNARD RAMANANTSOA, HEC BUSINESS SCHOOL, PARIS

The path ahead

Dean Bernard Ramanantsoa on selecting quality student applicants: “HEC Paris has always placed selectivity at the forefront of its mission.

High selectivity means high quality for an institution where graduate management education rhymes with leadership, integrity, fortitude and effectiveness. The GMAT is the perfect tool to help HEC Paris achieve this mission. We select MBA candidates from more than 70 countries for whom the GMAT creates a fair and balanced measure of potential achievement and success in our MBA programme.

Combined with interviews and a detailed analysis of the candidate’s achievements, the GMAT offers a means of both effective selection and solid prediction of success in academic courses.

Ranked #1 Business School in Europe for four consecutive years by the Financial Times Global Ranking, HEC Paris is proud of using the GMAT for its MBA programme.”

To learn more about the GMAT exam and the products and services it makes possible, visit gmac.com/efmd

INSIDE THIS ISSUE

GMAT® is a registered trademark of the Graduate Management Admission Council (GMAC), the leading advocate and resource for quality graduate schools of business, worldwide.

GMAC_EFMD_Ramanantsoa_Ad_200mmx265mm_v2.indd 1

8/24/10 2:22 PM

Deans that lead How business school deans can learn to lead

GDF SUEZ A top corporate university in a decade of change

MENA Education in the Middle East and North Africa

Worldly leaders West is not always best says UK’s Leadership Trust

Brave new world Ideas for producing leaders for a changed world

Sexy accountants?

Yes, it could be true. But is it a good idea?