Global Focus vol 07 issue 02 - Disruption

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Volume 07 | Issue 02 | 2013

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Global Focus Volume 07 | Issue 02 | 2013

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Hard times Crisis or opportunity for b-schools?

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Lost leaders Where will new ones come from?

Risky business The need to take risk seriously

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In focus

EFMD Global Focus: Volume 07 Issue 02 | 2013

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Volume 07 Issue 02 | 2013

In focus

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elcome to Global Focus. The content of this issue more than reflects that title. The coverage is indeed global, ranging from stories about China to Senegal by way of America, Canada, France and others. And the focus is acute, centering on some of the key issues facing management education in today’s uncertain world.

We begin with a heads-up briefing from the EFMD’s own Ulrich Hommel and Christophe Lejeune on the challenges technology poses for management education (page 10).

“Technological change promises to affect all facets of business school operations – how teaching is designed and delivered, how research is conducted and disseminated, and how interactions with stakeholders create value,“ they write.

“Opportunities probably outweigh threats but business schools are likely to be forced down a path that will lead to an industry shakeout and a redefinition of competitive advantage for many institutions.”

This sets the scene for many of the other articles in this issue, in particular the growing need to face up to the implications of greater complexity in business and society (page 16) and the ever-present need for leaders, both in business and industry and in education (page 40).

These issues of technology, complexity and leadership are explored in depth and in the context of their global ramifications. But they are also examined in terms of their local and/or regional contexts.

For example, on page 48 Pascal Vidal recounts how a French business school, SKEMA, has leveraged technology and close relationships with innovative industry research centres to develop and implement its global multi-campus strategy, including a unique venture on the American mainland.

And on page 20, Jorgen Thorsell, Justin Bridge and Fiona Gardner argue that the increasingly global nature of Chinese business means that it must start training its managers for leadership in a global business world.This proposition is underlined

by David Altman and Roland Smith of the Center for Creative Leadership on page 44, where they analyse why both developed and emerging economies may well suffer a leadership gap at all levels of business in the near future.

Finally, an enlightening view of management education in Africa comes from Moustapha Mamba Guirassy on page 52. He argues that too often business schools in Africa, many of very recent origin, can become mere training centres for African recruits to Western multinationals operating in the continent. Instead, he suggests ways they can nurture, and be nurtured by, their own African context.

We are always pleased to hear your thoughts on Global Focus, and ideas on what you would like to see in future issues.

Please address comments and ideas to Matthew Wood at EFMD: matthew.wood@efmd.org

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Volume 07 Issue 02 | 2013

Contents Global Focus The EFMD Business Magazine

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Executive Editor Matthew Wood matthew.wood@efmd.org

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Advisory Board Eric Cornuel Howard Thomas John Peters Consultant Editor George Bickerstaffe georgebickerstaffe@gmail.com Contributing Editors David Altman Justin Bridge Fiona Gardner Moustapha Mamba Guirassy Gillian Goh Ulrich Hommel John Johnson Michelle Lee Christophe Lejeune Umesh Mukhi John North John Oldale Anna Pastwa Andrew Rutsch Roland Smith Richard Straub Howard Thomas Jørgen Thorsell Dominique Turpin Pascal Vidal 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

In focus

hallenges and opportunities in the new business C education world Dominique Turpin analyses the issues and forces that are buffeting business schools

10 Major disruption ahead!

Ulrich Hommel and Christophe Lejeune discuss how technology could change the business model of business schools

14 Managing complexity: an idea whose time has come Richard Straub explains why we now need to tackle the complexity of business

20 Preparing Chinese managers for global leadership As Chinese business goes global it is time to start training its managers for leadership in a global business world say Jørgen Thorsell, Justin Bridge and Fiona Gardner

24 Cadres for the common good The 50+20 vision has ignited a flame that illuminates a path towards the future of management education. John North describes the latest steps on the journey

28 Fuelling business growth through coaching and mentoring – the Swiss Re approach The long-lasting financial crisis challenges the business case for corporate learning. Andrew Rutsch suggests that re-insurance group Swiss Re’s business-focused emphasis on coaching and mentoring may be one way forward

32 Business school evolution: media insights and the future outlook Gillian Goh, Michelle Lee and Howard Thomas examine the way the media has reported the business school “industry” over the past 20 years and what the future might hold

Contents

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iving students the best in international education G John Oldale explains how Canada’s University of Victoria’s business school turned the search for a more international MBA into a new type of graduate programme

40 iberal education key to business success L A new form of business education that links business competences with a grounding in liberal arts and sciences is essential argues a new book. John Johnson reports

44 he looming leadership gap T David Altman and Roland Smith of the Center for Creative Leadership analyse why both developed and emerging economies may well suffer a leadership gap at all levels of business

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48 French debut in America A French business school SKEMA is opening campuses around the world, including a unique venture on the American mainland. Pascal Vidal details the how and why

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Ulrich Hommel and Anna Pastwa present the results of the EFMD Risk Management survey and argue business schools have just begun to look at this issue more seriously page 60

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Management in Africa How can African business schools best serve the often unique needs of African businesses and peoples? Moustapha Mamba Guirassy gives one example from Senegal that may serve as a guide

56 N PRME and emerging economies U Business schools from emerging economies need to embrace UN PRME, argues Umesh Mukhi, and suggests some ways they could do it

60 Risk management ante portas Ulrich Hommel and Anna Pastwa present the results of the EFMD Risk Management survey and argue that most business schools have just begun to look at this issue more seriously

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MANAGEMENT EDUCATION FOR THE WORLD For many years commentators have described what is wrong with business schools – characterising them as the breeding grounds for a culture of greed and self-enrichment in global business at the expense of the rest of society and of nature.

Management Education for the World is a response to this critique and a handbook for those seeking to educate and create knowledge for a new breed of business leaders. It presents a vision for the transformation of management education in service of the common good and explains how such a vision can be implemented in practice.

‘50+20 not only raises the sights for those charged with the development of our future leaders, but also provides a clear roadmap for delivering on that ambition. As such, it is an important contribution to a journey of transformation that affects not only the future of business, but the very planet itself.’

Paul Polman Unilever, US

‘The 50+20 initiative is an ambitious effort that highlights the urgent need for radical change in what we teach and how management education is delivered today. In a world that faces so many different and fast-evolving challenges, the initiative is indeed timely and needed.’

Peter Bakker World Business Council for Sustainable Development, Switzerland

This 50+20 vision was developed through a collaborative initiative between the Globally Responsible Leadership Initiative, the World Business School Council for Sustainable Business and the UN-backed Principles of Responsible Management Education (PRME) and draws on the expertise of sustainability scholars, business and business school leaders, and thought leaders from many other walks of life.

This book explores the 21st century agenda of management education, identifying three fundamental goals: • educating and developing globally responsible leaders • enabling business organisations to serve the common good • engaging in the transformation of business and the economy.

Management Education for the World

EFMD Global Focus: Volume 07 Issue 02 | 2013

Available now from Edward Elgar Publishing: http://bit.ly/10UQM4M

KATRIN MUFF THOMAS DYLLICK MARK DREWELL JOHN NORTH PAUL SHRIVASTAVA JONAS HAERTLE

It is a clarion call of service to society for a sector lost between the interests of faculty, business and the schools themselves at the expense of people and the planet. It sees business education stepping up to the plate with the ability of holding and creating a space to provide responsible leadership for a sustainable world embodied in the central and unifying element of the 50+20 vision, the “collaboratory”.

MANAGEMENT EDUCATION FOR THE WORLD

Management Education for the World is written for everyone concerned or passionate about the future of management education: consultants, facilitators, entrepreneurs and leaders in organisations of any kind, as well as policymakers and others with an interest in new and transformative thinking in the field. In particular, teachers, researchers, students and administrators will find it an invaluable resource on their journey.

A VISION FOR BUSINESS SCHOOLS SERVING PEOPLE AND PLANET

K AT R I N M U F F T H O M A S DY L L I C K MARK DREWELL J O H N N O RT H PAU L S H R I VA S TAVA J O N A S H A E RT L E

‘We now finally have a blueprint that can be used as a foundation for a new contract between business schools and society. Changing the way we educate our business leaders for tomorrow will change the world for the better.’

Rakesh Khurana Harvard Business School, US

colours on the printed jacket may differ slightly to those seen on screen due to the techniques used to print the jackets

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Many people have become very used to getting lots of things free from the internet. So, how do you price your offering? And how do you develop a competitive edge?

What will be the key success factor? The school’s brand?

The faculty’s reputation? Or a combination of both?

CHALLENGES & OPPORTUNITIES IN THE NEW BUSINESS EDUCATION WORLD Dominique Turpin analyses the issues and forces that are buffeting business schools

Challenges & opportunities in the new business education world by Dominique Turpin

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The third challenge is economic.

Economic problems in Spain, Italy, Greece, Cyprus and elsewhere are seriously affecting job opportunities for business school graduates and participants.

The fourth factor is technology, and this will become even more important in the future. We all know that e-learning will be a massive challenge as well as a huge opportunity for business schools around the world. “MOOCs” (massive open online courses) are a reality, and e-learning could reshuffle the cards in a way that may well change the fate of a number of schools.

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he world of business education is facing its biggest opportunities and challenges in history.

Four major forces are starting to shape the future of business schools over the next five, ten or 20 years.

The first issue concerns public funding.

This is becoming more difficult to obtain as governments have less money to spend, at least in some parts of Europe.

As a result some schools are having to merge, as we have seen already in France, for example.

The second issue is demographics.

Europe and Japan in particular face the challenge of an ageing population.

When you want to predict the future, the only sure thing is that tomorrow you will be older than today. Consequently, you only have to look at demographics to know that some countries are going to face problems.

Technology will most likely mean that an increasing number of new competitors enter the management education market. And there will be a new type of competitor that approaches companies with executive education “solutions” and says: “You don’t need to send all your people to those big expensive business schools. We will go onto the web for you and find all the good stuff that is available, package it and sell it to you at a fraction of the price that traditional business schools would charge”.

The questions for anyone entering the e-learning field are still how to finance it and how to develop a sustainable competitive advantage. Many people have become very used to getting lots of things free from the internet. So, how do you price your offering? And how do you develop a competitive edge? What will be the key success factor? The school’s brand? The faculty’s reputation? Or a combination of both?

Obviously a big name can attract people to a website more effectively than a lesser-known brand. But there are still many questions to be answered.

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As competition intensifies, differentiation becomes crucially important. Every business school has a different mission— regional, national or international. But the question of how to differentiate yourself from other schools occupying a similar niche is becoming a major challenge.

These are the challenges facing business schools. But what is the view in the market? When I talk to companies about executive education, two issues come up.

The first is that customers are increasingly looking for “the best deal”. They take longer to decide if they will take up a particular programme; they want shorter programmes; and cost is becoming an issue.

But the most important factor, at least for IMD and our customers, is impact.

Companies often ask how relevant the academic world is today. Last summer I was in America talking to deans of major business schools, and some of them believe that the academic world is indeed becoming more and more academic. What impact do we want to have on the businesses of tomorrow?

An expression used a lot at IMD is the importance of the “Lifelong Learning Journey”. In the past, especially on the executive education side, you used to go to a GMP (General Management Programme) at Harvard Business School, Wharton, INSEAD or IMD and you would be (or thought you were) educated for life as a manager.

This is over! The world is changing too fast. We see an opportunity for repeated short-term courses and, since we deal with many global companies, their managers want to have the choice to go to a school in a certain part of the world and do another module or course in another part of the world.

What are the implications? As I mentioned earlier, schools have different missions. I think, therefore, that each school has to draw lessons from all these factors and forces for itself.

The ultimate goal of business schools, I believe, is to produce responsible leaders who can deal with an increasingly volatile, uncertain, complex and ambiguous world: the so-called VUCA market. At the top of any corporation, people are smart and have proven that they can run a business and be successful. In the end, authentic leadership and personal values will increasingly make the difference.

Customers are increasingly looking for “the best deal”, they take longer to decide if they will take up a particular programme; they want shorter programmes; and cost is becoming an issue

Challenges & opportunities in the new business education world by Dominique Turpin

It is also our job to shape and nurture a curious and open mind. I have seen too many executives and students living in their small world and not thinking enough about what is happening in other parts of the world or in different industries.

Of course, we need some local companies. I recently met an entrepreneur in Switzerland who was tired of fighting Chinese and Indian companies. One evening he listed a number of criteria for the business sector of his choice: first of all, he didn’t want to compete with the Chinese and the Indians; second, he didn’t want to have to explain what the product was about; third, he wanted the customer to come back every day; fourth, he wanted them to be non-price-sensitive. Which business fits? He came to the conclusion that he should open a chain of bakeries and he has been doing that very successfully.

However, even if you are a local baker, you should have an interest in different perspectives about communication or the way you design your shop. Curiosity about life in all its aspects is still the secret of great creative leaders. Intelligence without curiosity, in my view, does not mean much.

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4 I may be biased because back in the early 1980s, I did my PhD in Japan, my wife is Japanese and I spend a lot of time in Asia. I think that the future is going to be in that part of the world. If you see where the world is moving to today, the BRICs (Brazil, Russia, India, China) are the growth markets of today and tomorrow. However, executives now also talk about new opportunities in the “Double MIT” (Mexico-IndonesiaTurkey and Malaysia-India-Thailand) as well as Africa.

Having faculty who are curious about the world is critical. Before you teach you have to learn and in order to learn you need to have curious faculty. The challenge will be to stimulate faculty who are very comfortable and very successful teachers and researchers to go and look for something different in other parts of the world.

Four major forces are starting to shape the future of business schools over the next five, ten or 20 years: – public funding – demographics – economics – technology

ABOUT THE AUTHOR

Business schools are living in interesting times. Public funding, demographics, economics and technology are the main forces that are going to influence our medium- and long-term futures.

Dominique Turpin is IMD President (Dean) and also Nestlé Professor at IMD. He was previously the director of the IMD MBA and PED (Program for Executive Development).

In terms of the impact business schools try to have on their participants, whether students or executives, the shaping of responsible leaders is absolutely key. So is making them curious about the world in general. Getting these things right is vital for future success.

This article is taken from a speech given by Dominique at the 2013 EFMD Deans and Directors General conference at Koç University in Istanbul.

All photos courtesy of IMD. © IMD

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echnology-enhanced learning (either in a blended or distance format) is making marked inroads in management education.

Leading business schools have added online streams to their flagship programmes and the entire sector is rapidly expanding the use of e-learning tools to structure student learning. Web users can nowadays register for business courses on open source platforms such as Coursera and receive a certificate for successful completion at zero cost.

It is time to ask what impact this development will have on the future shape of the business school sector. Admittedly, we can at this point only offer speculative answers. But the writing is on the wall that technology-enhanced learning will exert a disruptive influence.

Technological change promises to affect all facets of business school operations – how teaching is designed and delivered, how research is conducted and disseminated, and how interactions with stakeholders create value.

Ulrich Hommel and Christophe Lejeune discuss how technology could change the business model of business schools

Opportunities probably outweigh threats but business schools are likely to be forced down a path that will lead to an industry shakeout and a redefinition of competitive advantage for many institutions. In this article, we highlight the implications of technological-accelerated change on teaching and research.

Major disruption ahead! by Ulrich Hommel and Christophe Lejeune

Teaching: from standardised provision to customised learning?

Business schools are noticeably leaving their traditional teaching space, which was defined by geographical space and time. Traditional pedagogy is being amended with blended learning elements or is drifting off into the cloud altogether. Technology-accelerated knowledge diffusion allows students to learn from the best what the world of management education has to offer. Renowned scholars and admired management gurus can feed directly into the students’ learning space and enrich intellectual progression.

In the process the marginal cost of provision will drop, which translates into a low-cost scalability of educational services. Technology can also help to address the “fairness of access” issue, which is currently hotly debated in the light of accelerating tuition fees.

In order fully to utilise these growth opportunities, business schools must begin to define themselves as managers of educational technology platforms, contracting in complementary resources for the delivery of services to stakeholders.

EFMD Global Focus: Volume 07 Issue 02 | 2013

Physical classroom space surrounded by faculty offices will not disappear completely but its importance could greatly diminish as educational offerings are moved into the cloud. Industry leaders will develop proprietary platforms as a source of competitive advantage. (Indeed, many are doing so already.)

Others will develop technology-based delivery capabilities in consortia with strategic partners (inside and outside academia). Smaller and not so well resourced institutions, however, will struggle to make the shift and may need to rely on more standardised options with fewer bells and whistles.

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The provision of highquality management education will in the future require three elements: • a top-notch technology platform • educational offerings stacked on these platforms • an externally verifiable rating system

Scalability can only be achieved with a new teaching model. Provision needs to be team-based, with “star teachers” designing the offering and support personnel spinning it out into the open market.

These teams do not necessarily have to be based inside business schools, implying that the rents associated with management education can potentially be appropriated by the business faculty. In effect, this is likely to lead to a power shift in business schools with “star teachers” starting to command similar salary premiums as “star researchers” today.

It will also create redundancy among faculty not capable of making this transition.

Business schools are noticeably leaving their traditional teaching space, which was defined by geographical space and time. Traditional pedagogy is being amended with blended learning elements or is drifting off into the cloud altogether

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The provision of high-quality management education will in the future require three elements: • a top-notch technology platform • educational offerings stacked on these platforms • an externally verifiable rating system ensuring that individual components are of appropriate quality and that learning paths are properly specified Depth and breadth will be an important source of competitive advantage for elearning platforms. Connectivity with intra-company platforms will further help to broaden the user base beyond individual students. In the process, management education will evolve into a highly customisable experience.

In the light of these developments, what will the business school of the future look like?

Ronald Coase’s Nobel-winning theorem teaches us that technology-accelerated learning will make the traditional boundaries of business schools increasingly fuzzy. As the transaction costs of arms-length contracting fall, market-based exchange is likely to replace educational production within organisational hierarchies.

A significant push for change will come from outside the business school sector.

As will be further discussed below, publishing houses are in the process of transforming their business models to compensate for eroding profit margins in traditional business areas. The result will be a natural convergence of technologyaccelerated learning and research-based knowledge diffusion.

The traditional teaching model will no doubt continue at the top end of the market and in certain market niches. However, financial sustainability necessitates the creation of pedagogical and networking-related distinctiveness that cannot be replicated in electronic formats.

Repeating and amending textbook knowledge, teaching off-the-shelf case studies and breaking down complex analytical knowledge packages into palatable portions will no longer be sufficient to protect the ivy-covered walls of higher education. Simplistic pedagogical short-hand such as

“research-based learning” or “educating for practice” will no longer suffice.

This development is positive in all respects. It will set free creative forces of innovation and change and will help to rebalance the role of teaching and learning versus research inside business schools.

Research: from large-scale irrelevancy to broadly defined value-added?

The increasingly prevalent “publish or perish” culture is widely lamented in the literature on business schools as well as by deans. It creates agency issues between faculty viewing publications as the sole lever of their human capital and business schools looking for service on a broader scale.

The “research speak” inside schools has moved from the discussion of topics of interests to journal rankings, impact scores and research points. Business faculty nowadays seems to be often more concerned about adding lines to their CVs than generating research with impact. To put it in Andrew Pettigrew’s terms, business schools are struggling to master the double hurdle of producing research that is academically rigorous as well as practically relevant (A Pettigrew, “Scholarly impact’ and the co-production hypothesis”, Global Focus 2/2008, pp 8-12).

Most deans find themselves in a “prisoners’ dilemma” and de facto hire publication lists, working paper reservoirs and research pipelines rather than educators, mentors or creative thinkers with an inspirational influence on the management profession.

It is a classic case of herd behaviour, with all schools uncritically applying the rules of the game.

What is even more concerning is the emergence of a faculty bullying culture inside academia, which appraises the value of a faculty member mainly based on top-level publications. The conventional wisdom that the greatness of a business school is significantly shaped by the ability to pool complementary resources seems to be disappearing through the backdoor.

Howard Thomas and Kai Peters (H Thomas /K Peters, “A sustainable model for business schools”, Journal

Most deans find themselves in a “prisoners’ dilemma” and de facto hire publication lists, working paper reservoirs and research pipelines rather than educators, mentors or creative thinkers with an inspirational influence on the management profession

Major disruption ahead! by Ulrich Hommel and Christophe Lejeune

of Management Development, 31(4), pp.

377-385) have questioned the sustainability of the research-driven business model and are calling it “a bit too luxurious”.

It is commonly defended on the (actually unproven) claim that there exists a causal link between research and teaching excellence. We argue that technology will help to challenge this logic in various ways. Its disruptive influence will be felt as business schools are struggling to generate the operative surpluses needed for the funding of research.

The challenge will mainly arise outside of the business schools’ current comfort zone.

For one, publishing houses struggling with falling profit margins are currently working on enriching electronically distributed content with supplementary data, podcasts, cases and so on.

The creation of premium services will move these providers into the realm of management education and will provide business schools in turn with opportunities to monetise research. In fact, this development can be seen as the fitting counterpart to the aforementioned developments in teaching and learning.

Opening up this revenue channel will require the transition into a radically different production model. Knowledge generation will evolve into a team effort with academic researchers being surrounding by support staff focused on the creation of derivative outputs. New performance metrics will emerge and will presumably include financial return as well as various proxies for relevancy derived from usage statistics.

Research dissemination has to be re-organised with new opportunities opening up for feeding content to stakeholders, most importantly corporate learning centres. This obviously raises a host of other issues such as the integration of the portfolio output approach into faculty development policies (what is the new career model?) or the future role of inter-school collaboration.

Sounds too radical? A closer look at the research realities in the natural sciences reveals that the “knowledge for money” approach has already been firmly established in higher education. The proprietary research model, however, challenges some fundamental academic values such as the freedom and openness of research. Not surprisingly, it is a source of considerable debate in the higher education literature.

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In our view, for-profit institutions will be complementary drivers of change. They are currently servicing the fringe of the market, non-traditional students with several socio-economic strikes against them. Their competitive strength derives from the ability to operate efficiently an industrial production model for educational services without any academic fripperies.

If the knowledge exchange between business schools and the corporate world can be organised in a profitable manner in line with their normal mode of operation, then they may take advantage of this opportunity to make inroads into the market mainstream.

Overall, we can expect that the current model of mass production in research, burdened by systemic irrelevancy, will gradually be replaced by co-production targeting value creation for stakeholders in the broadest sense.

Top-level schools will presumably find ways of maintaining the sustainability of their current mode of operations. In contrast, the “me too” and “also ran” institutions will increasingly be forced to confront the harsh realities of market forces eroding the economic foundation of the subsidised research model.

Conclusion Technology-accelerated change will enrich the management education in many other ways as well. For one, it will create novel opportunities for institutional co-operation to provide customised learning solutionsgiving students an international perspective, for example.

It will also raise the effectiveness of business schools in pushing forward initiatives such as 50+20 and PRME. Overall, the business school sector will probably transition into a “hub and spokes” system with somewhat blurred institutional boundaries. Hub connectors will define institutional networks, while the spokes will link business schools to entrepreneurially motivated providers of educational services and knowledge.

ABOUT THE AUTHORS

Ulrich Hommel and Christophe Lejeune are respectively Director and Co-ordinator of the EFMD Research and Surveys Unit.

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Managing complexity: an idea whose time has come Richard Straub explains why we now need to tackle the complexity of business

Managing complexity: an idea whose time has come by Richard Straub

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Our world is increasingly subject to failures that require systems-level and cross-systems-level thinking and approaches. The consequences of any decision can ripple with unprecedented speed across business ecosystems the way the crisis has impacted nearly every market. For CEOs and their organisations, avoiding complexity is not an option – the choice comes in how they respond to it.

IBM CEO Study “Capitalizing on Complexity”

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e may have different visions about the future. Few, however, would doubt that the world has become more complex in recent decades and that it continues this journey at an accelerating and—for many of us—unsettling pace. With digitisation, the interconnectivity between people and things (software “talking” to software) has exploded. Dense, global networks now define the technical, social and economic landscape. This interconnectedness and interdependency brings about entirely new risks, as well as opportunities, at every level.

A scholarly interest in complexity, as a subject unto itself, began in earnest some 30 years ago.

This was when, for example, researchers at the University of St Gallen in Switzerland developed a management model based on Systems Thinking.

Popular literature propagated “complexity theory”— in particular, the notion of the “butterfly effect” by which a small event in a remote part of the world (such as the flap of a butterfly’s wings) could trigger a chain of events that would add up to a huge disturbance in the larger system (such as a hurricane many thousands of miles away).

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With this, managers’ eyes were opened to the reality that organisations are not just complicated; they are complex. To be more precise, organisations are complex, adaptive systems because they are made up of humans with brains and, as such, possess learning capabilities.

Peter Senge’s landmark 1990 book, The Fifth Discipline: The Art & Practice of The Learning Organization, showed the potential for organisations to enhance their learning capacity at a system level and to increase their nimbleness and competitiveness. Senge’s bestseller resonated strongly around the world and unleashed a flurry of literature on what was described as a new kind of “learning organisation”.

But, in reality, little changed.

This wave of interest in complexity thinking led to few actual new practices being adopted among corporations. Why? There are, I think, five major reasons for the failure to affect management. At the same time, a deeper look at these impediments also suggests why this long-overdue shift may finally be poised to take place.

It is hard for managers to think multi-dimensionally Where complexity exists, managers have always created models and mechanisms that wish it away. It is much easier to make decisions with fewer variables and a seemingly straightforward understanding of cause-and-effect.

The notion of “maximising shareholder value,” which determines so much corporate behaviour these days, is the perfect example. This school of thought provides clear-cut and “simple” guidance to decision makers and relieves them of considering difficult trade-offs. We know, of course, that constantly dialling down investments to boost short-term profits or divesting assets to show a better return on assets (ROA) number often damages the long-term health of a company.

Still, all too many executives play this game.

By contrast, a complexity approach demands that competing values and priorities remain in view — and not just for the good of shareholders but for customers, employees and society at large.

A complexity approach demands that competing values and priorities remain in view — and not just for the good of shareholders but for customers, employees and society at large

Managing complexity: an idea whose time has come by Richard Straub

EFMD Global Focus: Volume 07 Issue 02 | 2013

What is more, the increasing ability of individuals and teams to connect through enterprise social media may lead, at last, to the widespread flowering of the learning organisation. By leveraging instant messaging, blogs, wikis and other platforms, more and more companies are creating living networks where knowledge is generated and then flows across organisational silos in unprecedented ways and at unprecedented speeds.

Too often in the past we have ignored the human element Although it has taken time for the technology to emerge that is allowing us to better cope with complexity, many managers have been leery to even try because of a nagging concern: Might we reach a tipping point when human brainpower becomes obsolete? Might robots or computers, as Ray Kurzweil suggests, supplant the knowledge worker?

The good news is that the shareholder-is-all paradigm is showing increasing signs of strain. A growing chorus of thought leaders (including Roger Martin and Stephen Denning) and organisations (such as the Aspen Institute and Conscious Capitalism) are pushing back against the “maximise shareholder value” school. And a growing number of companies — Unilever, Starbucks, Costco and Amazon come quickly to mind — are explicitly embracing a more complex orientation.

Until recently, technology was not powerful enough to capture much complexity When systems thinkers and theorists turned their attention to the implications for organisations in the 1980s and 1990s, the tools simply did not exist to model their workings at a level that would yield practical insight.

Now, the exponential increase in computing power and the progress in mathematics and statistical analysis have propelled us into a new era. With the ability to draw on “Big Data” and map networks at scales that were unthinkable only a decade or so ago, we can begin to understand communication flows through large organisations, as well as the impact of disturbances and managerial interventions on these flows.

For many of us, this is a disturbing thought because we have seen so many of the models designed to predict the future state of complex systems (from economies to climates) fall far short of accuracy.

The eager futurists talking about machines taking over evaluation of situations and decision making have set back their own cause, as others see them ignoring an essential fact: sense-making is always informed by values. The idea that we might look for value judgments from algorithms is badly flawed if not downright dangerous.

Fortunately, there is a growing recognition that, while computers can provide our brains with enormous extensions of its storage and processing capacity, machines must remain only inputs to human reasoning.

It is in our minds — often in communication with other minds — where the ultimate evaluation and deliberation must continue to take place. The brain is the very best “complexity processor” and itself our most complex organ.

For managers, new skills are becoming essential to manage all of this Big Data: to determine what the analytics should be solving, to decide what information is truly relevant to the enterprise and what simply constitutes “noise,” and to make critical value judgments about privacy and security.

In the end, we are slowly recognising that technology alone cannot solve the knottiest problems in complex organisations. The machine must be in service to human beings — not the other way around.

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We have confused the truly “complex” with the merely “complicated” It is crucial that decision makers understand the difference between a complicated problem and a complex one because the two require different strategies and tools.

Sometimes a problem will morph from one state to the other — either from complicated to complex or vice versa — and so managers need to be ready to adapt their approaches accordingly. They are largely not interchangeable.

How are these concepts different?

In their 2011 Harvard Business Review article “Learning to Live with Complexity,” Gokce Sargut and Rita Gunther McGrath offer this fundamental distinction: “The main difference between complicated and complex systems is that with the former, one can usually predict outcomes by knowing the starting conditions. In a complex system, the same starting conditions can produce different outcomes, depending on interactions of the elements in the system”.

The move from linear thinking to complexity is indeed a paradigm shift. It may be comparable with the move from Newton’s physics to Einstein’s.

Newton’s laws did not disappear with Einstein’s revolutionary discoveries but Einstein opened the door to an entirely new world — unseen before.

In this sense, complexity must become our worldview — a basic mindset guiding us in our assessments of situations and decisions. It should make us more humble and more alert. It should open our minds. It should spur an awareness that too often our linear interventions do not achieve what we want, and may even result in unintended consequences.

We have much more work to do to understand the difference between the complicated and the complex. But we are at least beginning to create a common language around these ideas.

The move from linear thinking to complexity is indeed a paradigm shift. It may be comparable with the move from Newton’s physics to Einstein’s

Many managers have not found “the innovation fulcrum” In their quest for double-digit growth in singledigit markets, many companies are finding themselves in an almost unmanageable state of complexity — one that they often do not realise is of their own making.

This “Complexity Crisis,” as John Marotti calls it in his book of the same name, is caused by a runaway proliferation of products, customers, markets, suppliers, services and locations. All of these add costs, which go untracked by even the best of modern accounting systems. Complexity also tends to fragment management focus. The Complexity Crisis thus becomes a hidden profit drain for many companies today and it remains under the radar screen of those who cause it.

As bad as this situation is for business, it might be even worse for government. In a number of European countries, including Austria, Belgium and France, the government’s share of GDP now exceeds 50%. And this does not include the hidden costs to the private sector that are imposed by any bloated public administration, with its flawed regulations and convoluted tax systems.

In their 2005 Harvard Business Review article “Innovation Versus Complexity: What Is Too Much of a Good Thing?” Mark Gottfredson and Keith Aspinall explain that organisations must decide how much innovation is appropriate before it leads to needless, or even damaging, complexity. The goal is for managers to find “the innovation fulcrum” — the pivot point where innovation suddenly tips over into complexity.

The authors put it as follows: “The pursuit of innovation can be taken too far. As a company increases the pace of innovation, its profitability often begins to stagnate or even erode. The reason can be summed up in one word: complexity. The continual launch of new products and line extensions adds complexity throughout a company’s operations, and, as the costs of managing that complexity multiply, margins shrink”.

Peter Drucker recognised the same phenomenon.

50%

In a number of European countries, including Austria, Belgium and France, the government’s share of GDP now exceeds 50%, and this does not include the hidden costs to the private sector that are imposed by any bloated public administration, with its flawed regulations and convoluted tax systems

Managing complexity: an idea whose time has come by Richard Straub

EFMD Global Focus: Volume 07 Issue 02 | 2013

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Yet most management practices are still anchored in the pre-complexity world. The pioneers who not only preach but also apply new complexitytested management methods and tools such as Fredmund Malik, a pioneer of Cybernetics-based management and the Scrum Alliance in the field of complex projects are the exception rather than the rule.

For years, Gary Hamel has been the most vocal proponent of a new management paradigm. In his Harvard Business Review article “Moon Shots for Management,” he and a group of prominent thinkers and business leaders (including the late CK Prahalad, Julian Birkinshaw, Tim Brown, Yves Doz, Henry Mintzberg, Vineet Nayar and Peter Senge) jointly define a set of grand challenges to move management out of its bureaucratic and hierarchical ghetto.

Stripping out unnecessary complexity from products and services has become a major movement in emerging markets – so-called “frugal innovation” has led to stunning results in fields such as mobile devices and medical equipment In his classic 1963 Harvard Business Review article “Managing for Business Effectiveness,” he asserted that clarity of focus is critical in allocating resources, which is the essential job of management. The hard part of innovation is sorting out which ideas should make the cut — and which should be abandoned.

Not everyone, thankfully, is failing in this exercise.

Stripping out unnecessary complexity from products and services — and targeting them to specific customer needs (including affordability) — has become a major movement in emerging markets. So-called “frugal innovation” has led to stunning results in fields such as mobile devices and medical equipment.

Were Drucker still alive, I assume he would have added his voice as well, for his foundational ideas and ideals are in line with most of the specific solutions posited in the piece: offering more autonomy to knowledge workers, seeing leaders play more of an enabling role, fostering trust throughout the organisation, achieving clarity of focus and direction of the organisation, providing a diversity of views, unleashing the human imagination and cultivating systems-thinking skills.

With the implementation of these principles, organisations can finally evolve from complicated entities, marked by clearly defined functional borderlines, towards adaptive complex learning systems.

But achieving such a “managerial moon shot” will not be easy; as far as we’ve come, it still requires a huge earthly effort from all of us.

Some of these products, having proven themselves, are now being shipped to more developed markets.

This “reverse innovation” may well show us the way to a better future.

The awareness of the complexity challenge among managers has increased significantly during the past 10 years. Tools and techniques to better understand and help navigate complex systems have reached a state of operational readiness.

Good thinking about ways to navigate or even embrace complexity is now available.

ABOUT THE AUTHOR

Richard Straub is EFMD Director for Corporate Services and EU Affairs and President of the Peter Drucker Society Europe

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Preparing Chinese managers for global leadership As Chinese business goes global it is time to start training its managers for leadership in a global business world say Jørgen Thorsell, Justin Bridge and Fiona Gardner

Preparing Chinese managers for global leadership by Jørgen Thorsell, Justin Bridge and Fiona Gardner

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n 1978 Deng Xiaoping, the reformist then leader of China, began introducing, very slowly, a market system into what was and still is in many ways a controlled economy.

Since then the demands for effective business management and leadership in China have increased dramatically. Consequently, the need has arisen to prepare Chinese managers to meet the challenges of doing business both in China and in the rest of the global business world.

A desire to understand Chinese leadership and “best practice” in leadership development in China prompted Mannaz, a leading international leadership development group (formerly the Danish Leadership Institute – DIEU), to undertake a study of how Chinese human resource managers are preparing their leaders to handle the challenges of doing business in a fast-changing global marketplace (Mannaz: Preparing Chinese leaders for the global business world, 2013). The study has proved as relevant as it is fascinating.

Point of departure Looking at how Chinese business leaders have created exceptional growth in the past three decades, one can only honour their achievements.

Anyone with expertise in the construction industry will know how much it takes to build a single high-rise apartment building not to mention the airports, roads, power plants, shopping malls, hospitals and schools that are required to support domestic urban life.

Chinese leaders have demonstrated their capacity to manage successfully this extraordinary and rapid transformation; admirable preparation for meeting the demands of the new business world as they enter the global scene.

Large western corporations have honed their ability to operate organisations on a global scale for more than a century. Scholars and business experts have built an impressive array of management and leadership “tools” to help move businesses forward.

Sequestered within the walls of a totalitarian state, Chinese business leaders had little or no access to this type of thinking until a mere 30 years ago.

They now find themselves playing catch-up as the Chinese market opens and they enter the global market.

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36k

In 2010, according to China Daily, 36,000 Chinese students were enrolled in MBA programmes across the country

Life after the MBA In western economies, and America in particular, the MBA degree has been the supreme management qualification for the past 40 to 50 years. From being a distinct degree for the few it has become a “gateway” degree for the many who wish to enter the ranks of business management.

This is no longer a Western phenomenon.

Since the China-Europe International Business School (CEIBS) opened its doors in 1984 under the name China-EU Management Institute more than 12,000 students have graduated from its masters programmes and more than 90,000 Chinese managers have undertaken executive education programmes there.

In 2010, according to the newspaper China Daily, 36,000 Chinese students were enrolled in MBA programmes across the country. In 2012 MBA enrolment was 30% higher across China compared to the year before according to The Independent, a British newspaper. Today China is taking the fast road to equipping its managers with the toolbox of modern management.

Large western corporations realised long ago, however, that a business school education on its own was not a complete answer to getting managers to perform. And while the MBA is still viewed as an important prerequisite for being an effective executive, organisations recognise the difficulties in translating academic theories into effective management practices.

Consequently, in the early 1990s large multinationals (again especially in America) started opening their own corporate universities to train managers in what they believed were successful management and leadership practices. Places like the corporate university of GE, an American energy and technology behemoth, at Crotonville became famous for “grooming” high-potential managers.

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Since then the executive development industry has grown tremendously and become of high importance to the competitiveness of western corporations. Today, leadership and “people management” enjoy top billing on many western corporations’ strategic agendas. Both subjects play a significant role in innovation and in streamlining organisations to meet the challenges of a turbulent global business environment.

According to a Mannaz study (Global Leadership, 2011), executive development gets best results when it is individually focused, job-centred, learner-driven, involves a leader’s whole team, is aligned with corporate strategy and has full attention from the top of the executive pyramid. Personal and team coaching based on real-life, real-time job challenges are regarded as the most effective ways to develop managers to perform and advance.

Overcoming the challenges With the rapid internationalisation of the Chinese business community, HR managers there face a number of challenges in preparing managers to lead and manage effectively. In its study of how Chinese HR executives do this, Mannaz collected the following responses: • 38% indicated insufficient knowledge of how to develop the leadership capabilities required by international leaders • 17% were challenged by the lack of top management engagement and support of leadership development initiatives • 15% stated that the low availability of potential candidates was a major challenge • Other challenges mentioned included “time” and “financial” constraints When asked specifically about the most challenging parts of preparing Chinese leaders for the global business world, HR executives highlighted the following: • Giving leaders a more thorough understanding of foreign cultures and how to behave when interacting with people from these cultures • Helping managers and leaders shift from a “technical” to a more “behavioural” leadership style and thereby provide more “inspirational” leadership • Encouraging managers and leaders to promote independent thinking and action among their people and thus create faster decision making through empowerment, transparency and communication • Supporting leaders in international settings to build and foster more personal relationships thereby generating more depth in their leadership • Preparing leaders to think strategically, have a broader picture and lead according to a more inspirational business vision

These responses mirror the experiences Mannaz has had working with Chinese executives. These managers are generally strong in technical issues and act as subject matter experts rather than as managers and leaders. Consequently, their instinct is to direct and control rather than delegate and inspire.

In Chinese organisations we often find direct reports waiting to be given orders rather than acting proactively and independently. We observe employees in Chinese organisations have a high level of commitment, are quick to take action and are very good at tackling challenges – or fighting fires – as they appear.

However, Chinese organisations in general face challenges of how to equip their managers to lead rather than simply supervise and direct and how to motivate their teams to become more effective and efficient in their work. What holds them back from addressing these challenges?

The HR executives in the study shared the following challenges: • It is difficult to get leadership development into the corporate budget and thus accepted as an important means of improving performance • Access to “best practice” in talent management and leadership development is hard to identify • Getting systems in place for identification, promotion and retention of leaders is extremely difficult given the rapid turnover of management staff • Allocating time to leadership development and not “fighting fires” (caused by the need to hire new people) is extremely tough • Getting access to true high-quality leadership development and moving away from traditional “classroom-based” one-way teaching towards more reality and action-orientated learning is proving difficult due to deeply entrenched views about executive learning When we asked the HR executives how they intend to overcome these challenges, we observed strong awareness of solutions that, to a high degree, are aligned with best practice in the west. Specifically: • Aim to do more thorough analysis of individuals’ operational and strategic business needs • Stop teaching theory: offer learning journeys with immediate impact that are based on leaders’ current job challenges and consequently help them improve their performance and thus their likelihood of being promoted

38%

Of Chinese HR executives, 38% indicated insufficient knowledge of how to develop the leadership capabilities required by international leaders

17%

17% were challenged by the lack of top management engagement and support of leadership development initiatives

15%

15% stated that the low availability of potential candidates was a major challenge

Preparing Chinese managers for global leadership by Jørgen Thorsell, Justin Bridge and Fiona Gardner

•C ommit top management to prioritising leadership development as a strong vehicle for both improving leaders’ performance and increasing retention of key leaders and employees • Incentivise people to learn leadership skills by offering programme credits, money and diplomas • Make programmes highly exclusive and only for the crème de la crème using a thorough selection process based on a well-established talent management system • Demonstrate return on investment in terms of financial impact Even more specifically, we learned that the Chinese HR executives were well aware of what they need to see more and less of to improve executive development in China: The HR executives also suggested the development of global Chinese leaders would advance along the following lines: • Get a leadership strategy in place to ensure a global leadership pipeline to meet the needs of the business and to support corporate strategy • Get a system in place to assess and identify accurately future leaders in terms of the skills, behaviours and competencies they require and thus be precise about development needs • Get leadership development onto the corporate agenda in terms of both formal and informal reality based learning activities for multicultural groups of leaders with clearly defined goals for impact and outcomes • Involve top executives in all phases of developing leaders globally in terms of strategy formulation, leadership needs, identification of high potential individuals, leader-to-leader activities, mentoring, coaching and demonstrating return on investment when doing follow-ups • Use expatriation and job rotation with care and avoid the traps of the “one-minute” expat leader and culture-shock paralysis

EFMD Global Focus: Volume 07 Issue 02 | 2013

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Chinese organisations in general face challenges of how to equip their managers to lead rather than simply supervise and direct and how to motivate their teams to become more effective and efficient in their work

What next?

According to our international studies of innovation in leadership development (Mannaz 2009) and global leadership development (Mannaz 2011), we see almost full alignment between how Chinese HR executives see their options for improving leadership and executive qualities and how best practices are applied in the west.

It is our guess that the Chinese HR executives’ insights will help them get executive development quickly up to par with western practices, especially in large Chinese organisations with global ambitions.

Just as we have seen the explosive spread of Chinese business schools and MBA graduates in recent years, so we foresee a similar explosion in the number of advanced Chinese corporate universities preparing their managers for the global world of business.

ABOUT THE AUTHORS

Dr Jørgen Thorsell is Chief Executive Officer, Mannaz Ltd in Hong Kong Justin Bridge is Managing Director, Mannaz Ltd in Hong Kong Fiona Gardner is Senior Consultant, Mannaz Ltd in Hong Kong

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The 50+20 vision has ignited a flame that illuminates a path towards the future of management education.

John North and Hamid Bouchikhi describe the latest steps on the journey

PHOTOS LEFT, MIDDLE & ABOVE Š 50+20

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Cadres for the common good by John North and Hamid Bouchikhi

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W

ith the dry winter months encroaching on large parts of sub-Saharan Africa it is not uncommon to spot and often smell wildfires or veld fires as they are known locally.

These wildfires occur in the open rural spaces of the African grasslands or woodlands (the veld) showing no regard for boundaries and fences or the national speed limit – often racing and raging out of control, reaching farms and settlements hundreds of kilometres from the initial spark.

Because the occurrence of wildfires are often the result of a simple insignificant spark and generally due to human action or neglect, one easily forgets that they also form part of the natural renewal process in an area where roughly 70% of the natural ecosystem (within South African borders at least) is adapted to this harsh but necessary reality.

When handled responsibly, however, a spark can ignite a much-needed source of light, a torch lighting the path of the carrier and those in the vicinity trying to find their way forward.

This seems to ring true for the impact and energy of the 50+20 vision.

The time and conditions are ripe for a new idea, a spark if you will. Some will perceive the spark as a threat and source of a pending wildfire. Others will protect and nurture the flame in the hope that it will help shine a light on the path of renewal.

And so, in the last few months, we have seen individuals and organisations across the management education ecosystem ignited by the essence of the 50+20 vision, working pro-actively and often in partnership to make its impact felt.

A number of business schools are in the process of piloting “collaboratories” within their stakeholder networks, and international and regional teams of management educators and scholars are using the roles and enablers described by 50+20 in their daily research, teaching and other duties.

When handled responsibly, however, a spark can ignite a much-needed source of light, a torch lighting the path of the carrier and those in the vicinity trying to find their way forward

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The action-oriented learning programme is designed over nine months with four face-to-face working sessions each held over three days and peer-to-peer work in between meetings

During the 2012 Academy of Management Presidential Address by President Anne S Tsui the 50+20 vision was held up as an example of management education “Daring to Care” while the latest revision of the EQUIS standards includes a new chapter on “Ethics, Responsibility and Sustainability” that requires business schools to adopt core elements of 50+20 ideals to remain accredited.

A recent testament to 50+20’s impact is the announcement in March that the Globally Responsible Leadership Initiative (GRLI), which continues to act as holding space of the 50+20 vision, entered into a long-term strategic partnership with EFMD and AACSB International as the operational arm of their shared ambition to accelerate change in responsible management education.

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But talk of renewal will come to nothing unless groups and individuals with the ability and willingness to shift management education towards the common good are equipped and mobilised.

As the vision of business and management education being celebrated for its service to society catches on there is naturally an increased demand for practical support in moving forward in its implementation. The hard work of transforming our institutions and offerings has only just begun.

The GRLI General Assembly (“Africa Leads” – Stellenbosch, South Africa, November 2012) signified a transition phase in the 50+20 work with the scoping of two groundbreaking initiatives aimed at: • equipping a global cohort of programme directors and faculty to drive innovation in their bachelors, masters, doctoral and executive education programmes • supporting institutions in bolstering their doctoral programmes, which are the main training ground for future faculty and professionals beyond the MBA The resulting programmes and networks provide an opportunity for deeper exploration of the 50+20 vision and much needed practical opportunities and initiatives to develop cadres of management educators and scholars that serve the common good as opposed to the status quo. (“Cadres” in this context are defined as groups trained for a particular purpose who drive large-scale transformation in their organisations, industry or society.)

A global network of committed peers Since GRLI’s creation in 2004 it has sought the right moment to launch a well-grounded global programme for the hands-on review and re-engineering of business school and corporate university programmes.

The Innovation Cohort, which will start work in October 2013, aims at gathering and equipping dedicated change agents from around the world.

It will involve mainly programme directors but may also appeal to other faculty members and senior administrators.

Since GRLI’s creation in 2004 it has sought the right moment to launch a well-grounded global programme for the hands-on review and re-engineering of business school and corporate university programmes

The programme aims to enable business school, leadership development and corporate university leaders to work in a facilitated peer environment with the insights developed through the 50+20 project and to develop the capacity of programmes to deliver the three dimensions of the 50+20 vision: educating globally responsible leaders; enabling sustainable business; and engaging with societal transformation.

The format will be “facilitated co-learning” embodying the collaboratory concept that is central to the 50+20 vision. Skilled facilitation and the participant-directed approach will help the global cohort to move from deep reflection to insight and rapid prototyping. By the end of the programme participants will be working with their own implementation process already under way within their sphere of responsibility.

The action-oriented learning programme is designed over nine months with four face-toface working sessions each held over three days and peer-to-peer work in between meetings.

Each participant is to deliver a specific selfdetermined outcome for his/her school and the cohort will jointly prepare a report on their work to contribute to the growing body of knowledge on transforming management education.

A global doctoral alliance for sustainability and responsibility A previous Global Focus article by Katrin Muff –(“50+20 offers a clear vision”, Global Focus Volume 6, Issue 3) on the implementation challenges for 50+20 pointed out that broadening the skills, experiences and competencies of faculty represents the single biggest lever in achieving the 50+20 vision.

Doctoral programmes, as the natural breeding ground for the next generation of tenured faculty, seemed like an appropriate starting point.

Cadres for the common good by John North and Hamid Bouchikhi

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“What do doctoral studies look like in the context of the 50+20 vision?”

With this question in mind a group of deans, directors, PhD students and administrators met in March 2013 to scope the work of the 50+20 Global Doctoral Alliance (GDA). More than 20 institutions provided virtual or direct input to the two-day design session with two parallel streams of work emerging: 1: Foundational doctoral-level module on Sustainability and Responsibility Jointly developed and delivered by GDA participants, this module will enable participating institutions with existing doctoral programmes to offer a percentage of credits required towards a doctoral track or concentration in “Sustainability and Responsibility”.

COMMERCIAL ORGANISATIONS

BUSINESS SCHOOL FACULTY

RESEARCH CENTRES

LEARNERS

PHOTOS © 50+20

NGOs

FACILITATORS

CUSTOMERS

COMMUNITY / SOCIAL ORGANISATIONS

BUSINESS SCHOOL STUDENTS

GOVERNMENTAL INSTITUTIONS

TABLE 1 Some required faculty competencies and skills identified by 50+20

LEARNING ORIENTED

RESEARCH ORIENTED

Interdisciplinary business knowledge beyond silos

Immersion and understanding of trans-disciplinary issues globally and locally

Coaching and personal development guidance Action-, whole person- and person-centred learning facilitation Systems thinking and risk analysis for holistic decisionmaking Networking capabilities for field projects and immersion with stakeholders

Sustainability knowledge integrating economic, environmental and societal concerns Traditional subject knowledge enriched with ethics, entrepreneurship, leadership, sustainability, technology and innovation Future-oriented and issuerelevant research methodologies Collaborative skills to interact with broad stakeholders across disciplines and sectors

The module is meant to address the core knowledge and skill requirements at doctoral level and its design allows for complementary specialisation modules to be added in future.

2: 50+20 doctoral student network It became apparent that doctoral students working in the areas of sustainability and responsibility may benefit from the opportunity to peer review, co-write and meet (face-to-face or via virtual colloquia) with other students and senior academics.

Work is underway to identify participants and convene an online network and sharing platform for existing doctoral students and supervisors focused on sustainability and responsibility.

Conclusion 50+20 has been and remains an open-source vision.

No one holds the patent to put it into production.

Irrespective of the degree of our individual and institutional abilities and energy to implement the vision, it is clear that increasingly others will step forward and nurture the flame that has been ignited.

GRLI is going beyond calls for radical change. By providing a practical starting point for business and management educators who recognise the urgent need to transform the entire ecosystem, including their own institutions and offerings, and who are prepared to work collaboratively to bring about such change, it hopes to develop a cadre of management educators and scholars who aim not to be the best in the world but the best for the world.

ABOUT THE AUTHORS

John North is an associate of the Albert Luthuli Centre for Responsible Leadership (University of Pretoria) and heads up the GRLI Africa office.

He can be reached at john.north@grli.org Hamid Bouchikhi is Professor of Management and Entrepreneurship and Academic Director of the Entrepreneurship Center, ESSEC Business School, France, and Academic Champion of the Sustainability Initiative at ESSEC FURTHER INFORMATION

For more information on the Doctoral Alliance and Innovation Cohort including a list of institutions that are keeping the flame alive please visit: www.50plus20.org/projects

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FUELLING BUSINESS GROWTH THROUGH COACHING & MENTORING: THE SWISS RE APPROACH The long-lasting financial crisis challenges the business case for corporate learning. Andrew Rutsch suggests that re-insurance group Swiss Re’s business-focused emphasis on coaching and mentoring may be one way forward

S

wiss Re, the Zurich-based global re-insurance firm has achieved an impressive turnaround since the financial crisis, moving from a loss of $663 million in 2008 to a net income of $4.2 billion in 2012.

Yet, the environment continues to be difficult: low interest rates, a changing regulatory landscape and fragile markets – particularly in Europe – yet with quite robust growth in emerging markets. If you were Michel Liès, Swiss Re’s CEO, what would you do to accelerate profitable growth?

The recent EFMD CLIP (Corporate Learning Improvement Process) Sharing Best Practice Workshop hosted by Swiss Re in Munich, Germany, on 15 March 2013 showcased how the firm leverages coaching and mentoring as motors to fuel the firm’s development.

Fuelling business growth through coaching & mentoring: the Swiss Re approach by Andrew Rutsch

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Swiss Re has achieved an impressive turnaround since the financial crisis, moving from a loss of $663 million in 2008 to a net income of $4.2 billion in 2012

PHOTO © SWISS RE

4.2

25% By 2015 Swiss Re aims to generate 20% to 25% of its revenues from high-growth markets – this requires talented people with the right skills and languages as well as agility and a passion to perform

Succeeding in high-growth markets requires skilled and engaged talent One key thrust in Swiss Re’s strategy is high-growth markets. In South Korea it has worked with Cigna/ LINA to develop insurance that covers the cost of cancer treatment for people over the age of 60. In China it is teaming up with local insurers to deliver insurance that covers similar risks for people of all ages – a first in the market. In Vietnam and Mexico it is working with governments to protect livelihoods and prosperity.

By 2015 Swiss Re aims to generate 20% to 25% of its revenues from high-growth markets. This requires talented people with the right skills and languages as well as agility and a passion to perform.

The learning tool box: strengthening continuous learning through different means In response, Swiss Re’s leadership in collaboration with Swiss Re Academy, the company’s corporate learning function, has embraced the “70-20-10 learning and development model” to support the targeted business growth. In this, 70% is geared towards learning on the job through, for example, rotations and stretch assignments; 20% is focused on learning from others such as coaching and mentoring; 10% is invested in formal training measures such as seminars and e-learning.

In other words, Swiss Re leverages a range of means to strengthen continuous learning in order to enhance the development of individuals and the enterprise generally.

Yet in times of limited resources financial investments are subject to close scrutiny to determine the business impact they create.

And so Swiss Re is deliberate in how it allocates its learning budgets.

One strategic investment is its coaching and mentoring programme.

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Coaching and mentoring for key target groups accelerates business growth Broadly defined, coaching supports individuals or teams in building skills that increase performance (typically with a short-term focus) while mentoring is primarily about developing capability and potential in the long-term (CIPD (Chartered Institute of Personnel and Development) 2009).

Case examples include change situations, moving into a new role or dealing with challenging tasks. Another example is a pilot talent development program in Asia, with modules in China, Hong Kong and Indonesia and coaching as a key component.

Mentoring is offered to emerging talents as a relationship (outside of the regular reporting line) that helps them develop and move successfully through times of change and transition. A more experienced person is matched with another (less experienced) individual and acts as a listener and guide in questions of business or personal development.

Mentoring is seen as especially effective because interaction with senior managers helps develop a more sophisticated and strategic perspective on the firm and its direction, values and ways of working (Day 2001).

PHOTO Š SWISS RE

At Swiss Re, coaching is positioned as an investment in high performers. Individual coaching focuses on the top three layers of the firm, around 1,500 people. More senior people will likely work with an external coach. Team coaching is also offered, using experiential learning such as business simulations and team exercises.

1.5k

At Swiss Re coaching is positioned as an investment in high performers, individual coaching focuses on the top three layers of the firm, around 1,500 people

Mentoring is seen as especially effective because interaction with senior managers helps develop a more sophisticated and strategic perspective on the firm and its direction, values and ways of working

Fuelling business growth through coaching & mentoring: the Swiss Re approach by Andrew Rutsch

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How would you leverage corporate learning to accelerate your business?

“Fuelling business growth through coaching and mentoring” – the latest EFMD CLIP Sharing Best Practice Workshop using the Swiss Re case demonstrated how corporate learning can play a key role in accelerating business results.

Creating triple impact: individual, group and business Ultimately, coaching and mentoring are two key means to an end. In other words, they help accelerate learning to create impact at the individual, group and business level as they are geared to people and teams with significant involvement in organisational change processes (Vera & Crossan 2004).

As such, Swiss Re’s leadership views them as critical tools to expedite learning among people who energise and lead current and future growth to win in markets where agility and speed are paramount.

In other words, coaching and mentoring are two examples of how Swiss Re advances its business and people at the same time.

The Swiss Re approach points to the changing role of corporate learning. In an environment that is increasingly disrupted by consumer, technology and regulatory shifts, the traditional classroombased model is doomed. What firms are in desperate need of is enhanced learning and performance across all levels – enabled by the corporate learning function. Hence, how would you leverage your corporate learning function as CEO? Compare this to how your corporate learning budget is currently invested.

ABOUT THE AUTHOR

Andrew Rutsch is a consultant to Capgemini University and student in the PennCLO Executive Doctoral Program. He is Co-Founder and Facilitator of the EFMD Learning Business Partner Special Interest Group and author of several publications on enterprise learning and transformation.

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O

ver the last two decades business schools and management education have received much attention in the media – witnessed by the boom in media rankings and the myriad topics discussed. Global events, such as the global financial crisis, have often been the precipitator of intense scrutiny of management education and calls for its reform.

Trends in the global environment, such as globalisation and the rise of Asia, have similarly framed discussions about the need for business schools to adapt and stay relevant. In this overview, we identify the themes that have emerged out of our review of media articles published between 1990 and 2012.

(To see the full list of these articles, please visit the webpage, Media Articles on Business School and Management Education Issues, 1990-2012 at www. efmd.org/mediareview.

BUSINESS SCHOOL EVOLUTION: MEDIA INSIGHTS & THE FUTURE OUTLOOK Gillian Goh, Michelle Lee and Howard Thomas examine the way the media has reported the business school ‘industry’ over the past 20 years and what the future might hold

We begin, however, by examining the evolution of the MBA, a programme that is often a de facto barometer of business schools’ popularity, and the criticisms that have been levelled at them.

Business school popularity: the evolution of the MBA The growing popularity of business schools in the late 1980s led to the birth of business school rankings by the media, beginning with US News & World Report in 1987, and followed by Business Week in 1988, and the Financial Times in 1999.

Since then, these rankings have stimulated both intense interest as well as ire, with many a debate about the appropriateness of ranking criteria, the failure of such rankings in capturing “distinctive school culture”, and the fallout of a proliferation of rankings. An undeniable consequence of such rankings has been the “commercial” influence it has had on students, turning students into consumers and putting the pressure on business schools to become more business-minded.

90s

The early 1990s saw the reputation of European business schools growing and with that new comparisons being drawn between top European and American business schools

Business school evolution: media insights & the future outlook by Gillian Goh, Michelle Lee and Howard Thomas

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The early 1990s saw the reputation of European business schools growing and with that new comparisons being drawn between top European and American business schools. Observers also noted that students were turning to European schools, where MBA programmes are generally shorter and cheaper than at American schools, and where there is greater opportunity to benefit from a broader international experience. (More recently, though, there have been indications that European business schools are losing their appeal due to the weak euro-economy, the pan-European debt crisis and increased competition from business schools in emerging markets in Latin America and Asia.)

The MBA has also evolved in the sense that more varieties have emerged, including executive MBAs and shorter one-year programmes in both Europe and America. The dot-com boom in the late 1990s to early 2000s helped to fuel interest in distancelearning MBAs, validating the potential of the internet as a game changer in management education.

Hybrid or blended learning programmes, involving a mixture of face-to-face and online teaching, are also on the rise. There has also been a trend towards joint MBAs, involving alliances or joint ventures between business schools (often in different countries and even continents), spurred by competitive concerns and the perceived need to differentiate and to build one’s own brand through well-chosen partnerships.

Criticisms of the MBA and challenges faced The growing popularity of the business school has been paralleled by increasing criticism of the MBA. Criticisms have ranged from the lack of relevance of business school curricula in meeting the needs of students and businesses to the lack of practical research aimed at tackling real-world business problems.

The growing popularity of the business school has been paralleled by increasing criticism of the MBA – ranging from the lack of relevance of business school curricula in meeting the needs of students and businesses to the lack of practical research aimed at tackling real-world business problems

MBA programmes have also been criticised for their dubious quality and even for teaching flawed theories. MBA graduates, on the other hand, have been criticised for their overly analytical and quantitative approach to business issues at a time when soft skills, such as leadership ability, are increasing valued by companies.

At the same time, doubts have been raised about the value of the MBA, with observers noting the increasing cost of an MBA education and questioning its return on investment. Articles written about the issue have looked at such metrics as salary growth post-MBA, length of payback period and salary gain relative to the cost of an MBA. While there are differing views, the balance of opinion seems to be on the side of the MBA, based on favourable numbers yielded by the metrics used.

Arguments have also been made that an MBA is merely a high-priced signalling mechanism (given the reputation and carefully cultivated brand of a business school and associated networking opportunities). The real value, so the argument goes, is not in the education itself but rather in the screening for intelligence, drive and past accomplishments that schools’ admission processes undertake. In that sense, each cohort admitted by a school is effectively a shortlist of potential hires for companies, pre-screened for desirable qualities.

The media has also highlighted a particular challenge that will be faced by business schools – the anticipated shortage of faculty brought on by declining enrolments in doctoral programmes, growth in MBA programmes and retiring baby boomers among faculty. The likely consequence as schools struggle to staff programmes with well-trained faculty is a fall-off in quality of research and teaching, which will in the end undermine businesses’ ability to recruit high-quality graduates.

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Corporate scandals and the global financial crisis In the early 2000s corporate scandals dominated the media and framed discussions about business schools and their role in such scandals. Management education was fundamentally challenged to reflect upon itself and asked to place more focus on issues of ethics and corporate governance in its research and curricula.

This issue resurfaced with greater intensity during the global economic crisis (2008-2010, especially in 2009). Business schools were further criticised for having too simplistic an approach to ethics, with ethics courses often side lined or made “optional” in schools. Some suggested that the MBA be professionalised, which would give greater emphasis to inculcating a sense of responsibility and ethics in MBA holders, just as is done in law and medicine.

The banking mayhem also brought the subject of risk management to the fore. Questions were raised as to whether the sophisticated financial models developed in business schools were too complex to be appropriate for – or even understood adequately by – corporate managers.

Some argued that business schools have become too analytical and too narrowly focused on rigour in their approach to teaching and research and, consequently, ignored the complexities of the real world.

Critics also pointed out that the goal of maximising shareholder value has been given so much focus that it has become an overriding imperative.

What was said to be missing was a broader sense of purpose. And while MBA students were seen as technically competent, they were said to have lost the ability to critically examine themselves and develop a sense of purpose and identity.

Overall, the economic crisis led business schools to recognise that simply equipping students with technical knowledge is not enough and that there is an urgent need for curriculum re-evaluation and reform. This has led to discussions in recent years that have centred on teaching authentic leadership skills, imparting critical thinking skills (the liberal arts MBA), and giving more focus to the process of learning and to thinking more flexibly across multiple frameworks, cultures and disciplines.

Corporate social responsibility and sustainability in business schools The importance of corporate social responsibility (CSR) and sustainability was first acknowledged in the early to mid-2000s, with calls to incorporate these topics in business school curricula (see the Beyond Grey Pinstripes survey of 2003).

Schools were initially hesitant to offer courses in these areas given the lack of high-quality research.

It was not until a few years ago that schools began to step up efforts in researching and teaching CSR and sustainability. There is also evidence of strong pick-up on the demand side of the equation – surveys reveal that CSR is high on MBA candidates’ agendas (albeit with different underlying motives: some for a competitive edge in business, others for a fresh perspective towards business – the so-called “triple bottom line”).

Accreditation bodies have also played an important role in urging the incorporation of CSR in management education. Organisations such as EFMD have given the issue focus by including it as a dimension of concern when assessing schools for accreditation, thereby providing powerful incentive for business schools to incorporate it in their curricula and their operations.

Globalisation and the internationalisation of curricula Globalisation and the consequent change in competitive landscape has led some to predict that the best business education will not be one that merely offers international content in its courses but one that is truly multicultural, both in terms of composition of the faculty and student body and the type of research that is done.

In attempting to increase the “international quotient” of their programmes, business schools have aggressively pursued partnerships with foreign institutions, as witnessed by the huge increase in number of cross-border partnerships and jointdegree programmes.

While it is true that business schools in the west have long invested effort in internationalising their curricula by expanding their study-abroad options and offering joint degrees with foreign campuses, observers have argued that many leading business schools, especially American schools, use exchanges and alliance agreements to reap more profits and not to become truly internationalised. Business schools have been urged instead to develop curricula that inculcates a truly “worldly mindset” in students.

Business school evolution: media insights & the future outlook by Gillian Goh, Michelle Lee and Howard Thomas

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Overall, the economic crisis led business schools to recognise that simply equipping students with technical knowledge is not enough and that there is an urgent need for curriculum re-evaluation and reform

In China, for example, foreign-trained business school deans play a significant role in plans to transform China’s elite business schools into world-class players. Programmes are designed to be attractive to Chinese and overseas students alike, making them simultaneously more international while building on core knowledge of Chinese businesses and the Chinese economy.

The rise of Asia and Asian business schools There has been a dramatic increase in demand for management education in Asia as companies seek to sustain the high rate of growth in these emerging markets. Indeed, enrolment in MBA and executive MBA programmes in China has grown rapidly, especially in the last five years, spurred by the opening up of the Chinese economy to the outside world.

However, despite the rise of Asia and its tremendous appetite for management education, the commonly held view is still that business schools in the west have an advantage over more nascent schools in Asia, in terms of resources, quality of faculty and reputation. The view appears to be that some of these institutions will require time and resources to develop into research powerhouses and to build a strong enough reputation to compete for top international students.

In spite of this scepticism, there has been an interesting reversal of trend in the global demand for management education, with Asian students increasingly opting to attend quality local schools and some foreign students choosing to pursue degrees in Asia. This appears to be driven in part by the fact that the traditionally stronger preference for western degrees over local ones among employers is declining.

This trend favouring Asian business schools is likely to gain momentum as generations of foreigntrained Asian academics return to their home countries equipped with the expertise to compete internationally.

The belief is that China and India’s top business schools are capable of grooming future leaders in the same way that top schools such as Harvard, Stanford and INSEAD have. However, for the moment at least, many corporations in China, India and other markets in Asia, continue to send their managers and executives to be trained in American and European business schools.

The argument that Asian business schools cannot simply rely on knowledge developed in the west has been gaining increasing acceptance. Some have highlighted the need for Asian research based on the social, economic and political realities of the region while others have called for new Asia-focused curricula.

For example, China’s business schools have been encouraged to contribute more to the needs of Chinese industry by developing all forms of business education and training inside Chinese companies, something that is currently a rarity across China.

5

There has been a dramatic increase in demand for management education in Asia – enrolment in MBA and executive MBA programmes in China has grown rapidly, especially in the last five years, spurred by the opening up of the Chinese economy to the outside world

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Conclusion: what kind of business school in the future?

Given the comments and media articles summarised above, it is appropriate to consider the outlook for the business school of the future (note that this is the focus of the second volume of the EFMD-sponsored research by Howard Thomas and his colleagues.

Volume I discussed the Promises Fulfilled and Unfulfilled in Management Education).

Schools will have to make substantial changes in what they research and teach. This means broadening the traditional focus of research and teaching in business schools to look more broadly at the wider society, to embrace multi-disciplinary perspectives and to turn theoretical perspectives and research focus towards issues of clear relevance to business and society, such as Big Data and living analytics, problems of ageing and pension provision, and the role of innovation and entrepreneurship in new product growth.

A first move would be to develop a strong norm of learning management as an art and not earning a degree by solely focusing on research and teaching in the “mother” disciplines of management – economics, law and mathematics. This means prioritising learning over the “added value” of a business education.

A second move would be to place far greater emphasis on the ethical and moral questions endemic in modern capitalism and to examine critically the role of businesses and managers in society. This would entail going significantly beyond the current debates about corporate social responsibility, which arguably act as a convenient moral “cloak” for deeper questions about the accountability of managers for their actions and decisions, as well as the role of business in wider society.

These could include a wide range of topics ranging from, for example, an examination of why there are simultaneous obesity and starvation in a world technologically able to feed itself to topics such as social and economic policy, understanding the impact and the risks of exogenous events such as climate change, disasters and terrorist activities, and the impact of a newly emerging global economic order as China and India become key players in the world economy.

As managers operate increasingly globally, business schools themselves will have to become less insular and nationally oriented – an understanding of languages, comparative social cultures and the impact of religion on global economic activity would seem to be essential in the near future

Finally, as managers operate increasingly globally, business schools themselves will have to become less insular and nationally oriented. An understanding of languages, comparative social cultures and the impact of religion on global economic activity would seem to be essential parts of the teaching and research curriculum of business schools in the near future. Contextual and cultural intelligence should become as important as analytical and emotional intelligence.

To the extent that schools do not undertake these changes, we argue that they are likely to become irrelevant and unnecessary institutions operating on the sidelines of key social, economic, and political issues.

Deans need to have the courage to build curricula that develop so-called T-shaped individuals — that is, those who have significant disciplinary breadth achieved through a liberal education as well as appropriate training in the important functions and languages of management education Unfortunately, the similarity in many business school curricula arises from the imitative tendencies present in current management education.

ABOUT THE AUTHORS

Gillian Goh is currently pursuing a Bachelor of Business Management at the Lee Kong Chian School of Business, Singapore Management University.

She is a senior student with double majors in Finance and Marketing.

Michelle Lee is Associate Professor of Marketing and Academic Director for Accreditation at the Lee Kong Chian School of Business, Singapore Management University.

Howard Thomas is the Dean of Lee Kong Chian School of Business at Singapore Management University and LKCSB Chair of Strategic Management, former Vice-President of EFMD, honorary life member of EFMD, and long-standing board member.

EFMD Global Focus: Volume 07 Issue 02 | 2013

SOL

“Sustainability is one of the key issues for the 21st century, and this is an exceptional collection that will be of great value to business schools and companies all over the world” Professor Eric Cornuel, CEO and Director-General, EFMD

the sustainable organization library

An international online collection of nearly 400 book and journal volumes in sustainability, social responsibility, governance and related areas – now in partnership with EFMD

To celebrate the inclusion of EFMD research in the Sustainable Organization Library, we are pleased to offer EFMD member organizations a FREE TRIAL ACCESS and a special MEMBER DISCOUNT RATE. SOL is available as an outright buy-to-own purchase, or on annual subscription/rental. Contact sales@gseresearch.com.

• SOL features around 5,500 chapters and papers on sustainability, which can be searched and downloaded individually.

• SOL can be used to support academic programs of teaching, research and study. It also contains numerous case studies.

• SOL content can be used in reading lists, course packs and similar.

• SOL is a particularly useful resource for practitioners on executive education programs.

• SOL can be used as a basis for the formulation and demonstration of sustainability strategy and mission; and to support practical initiatives such as waste reduction or energy-saving.

• SOL works on multiple devices, including tablets and smartphones.

To set up a FREE TRIAL, or for a quote at an EFMD Member special discount offer rate, contact sales@gseresearch.com.

GSE Research Publishing, Leigh House, Varley Street, Leeds LS28 6AN, UK Tel +44 113 386 9278 Fax +44 113 386 9277 www.gseresearch.com www.greenleaf-publishing.com Offices in the USA, India and UK.

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Giving students the best in international education

I

n the early years of this century, the The Sardul S Gill Graduate School at the Gustavson School of Business, University of Victoria in Canada was looking for ways to give its MBA students more opportunities to be exposed to the world of global business.

Though there was no shortage of partner universities able and willing to offer international exchanges for students wishing to study abroad for a semester, the then dean, Dr Ali Dastmalchian, and other faculty members wanted more.

They drew upon research to design a new offering for students that envisaged a more integrated, comprehensive, cohort-based model where students from Victoria and other universities could work together much more closely, develop enhanced cross-cultural skills and learn first-hand how business is done in major global markets.

Victoria drafted an agreement with longtime partners Johannes Kepler University in Austria and National Sun Yat-Sen University in Taiwan – both of whom had similar interests – to try something new.

John Oldale explains how Canada’s University of Victoria’s business school turned the search for a more international MBA into a new type of graduate programme

Called the GMBA (Global MBA option)

by Victoria and the ACT (Austria, Canada, Taiwan) programme by its two partners, this collaboration allowed groups of masters students from each university to study together as a cohort in all three countries, spending about six weeks at each university.

This worked well for several years. Interest in the model grew and the need for a larger and longer stand-alone programme became clear.

Building on the GMBA/ACT foundation, a flexible new arrangement was developed that would allow Victoria to offer a brand-new degree while giving its partners’ students access to additional spaces in a more comprehensive and robust tri-continent experience as part of their own masters degree programmes. This was the Master of Global Business (MGB) programme, launched in 2010.

The new programme brought together students from all three partner universities.

The small class size and the cohort model ensure maximum engagement with cross-cultural learning opportunities.

All students spend approximately three months together, first in Victoria with an emphasis on studying Global Business Fundamentals.

For the second module students move to Kaohsiung, Taiwan, where the focus is on Global Business Opportunities. The third module is held in Linz, Austria, concentrating on Global Business in Action and culminating in major consulting engagements with multinational companies.

Giving students the best in international education by John Oldale

Running through all three modules are language courses (each student must learn a new language), a guided cross-national business report project and a course on Global Leadership and Cultural Intelligence Much of the programme’s nine-months of study is team-based; student teams are re-configured for each module so that students have the maximum opportunity to work across cultural lines.

This process develops a mutual dependency as students realise that at some point each of them will need help and will be called upon to help – with academic work, local knowledge, languages, cultural adaptation and so on. This shared dependency is very important in strengthening bonds among students and in helping them develop global mindsets and lifelong friendships.

Ultimately, the programme aims to to deliver the following student learning outcomes: • Develop a “global mindset” to increase effectiveness in international contexts • Enhance ability to deal with the challenges of doing business internationally • Gain understanding of comparative socio-economic environments in North America, Asia and Europe • Ensure a high level of cultural awareness and the ability to work effectively in a multicultural environment • Develop foreign language competency

EFMD Global Focus: Volume 07 Issue 02 | 2013

MGB students complete their programme with a global internship that can last from three to eight months, making them well prepared for careers with any organisation that does business – or wants to increase doing business – in the global arena.

After two successful years of offering this initial “path” in the MGB programme, a second path was launched in 2013 with new partners: the Rouen Business School in France and Sungkyunkwan University (SKKU) in South Korea. This gives students the chance to choose to complete their programme in either Canada, Taiwan and Austria or in Canada, France and Korea.

In November 2012, the MGB programme was recognised by the Canadian Bureau for International Education (CBIE) as a Canadian champion of international education and was given the “Outstanding Programme Award” as a high-quality and creative programme in international education.

It is a fresh learning model that meets an obvious need for graduate business study immediately following B Com graduation (or later) and the hunger to learn skills that allows a new business professional to function immediately in the ever-growing global marketplace.

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MGB students complete their programme with a global internship that can last from three to eight months, making them well prepared for careers with any organisation that does business in the global arena

ABOUT THE AUTHOR

John Oldale is MGB Associate Programme Director, Sardul S Gill Graduate School, Peter B Gustavson School of Business, Uvic, Canada FURTHER INFORMATION

For more information please go to the Gustavson School of Business website: http://www.uvic.ca/gustavson/gill/mgb/ index.php

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A new form of business education that links business competences with a grounding in liberal arts and sciences is essential argues a new book. John Johnson reports

T

he business world is undergoing tectonic change. From tiny start-ups to megacorporations, businesses are rapidly evolving as globalisation and the information revolution continue to create massive and disruptive transformations in all aspects of commerce, a course that will only accelerate in coming years.

As businesses seek to work more efficiently, increase profits and embrace corporate sustainability mandates, they need to react swiftly to the changes occurring around them. The old way of doing business – where silo departments worked autonomously and often for the good of their own group – no longer responds effectively or quickly enough.

Many business schools have yet to adapt to the new principles required to prepare students for the 21st century business world, where training in the liberal arts and sciences can be just as crucial as traditional business studies

LIBERAL EDUCATION KEY TO BUSINESS SUCCESS

Liberal education key to business success by John Johnson

In this new reality, a new kind of business education is needed – a fusion of core business competencies with a thorough grounding in the liberal arts and sciences. Today’s business practitioners must have knowledge of communication, science and technology, world culture, language and psychology among other liberal skills in order to operate successfully in the highly matrixed, global environment of 21st-century business.

Many business schools, however, have yet to adapt to the new principles required to prepare students for this business world, where training in the liberal arts and sciences can be just as crucial as traditional business studies.

A new book published by Palgrave Macmillan, Shaping the Future of Business Education: Relevance, Rigor, and Life Preparation, addresses these new realities facing business academics and educators around the world.

The book’s authors point to the need to produce well-rounded graduates who are capable of not only traditional tasks such as (for example) accounting but are also well versed in the ramifications of financial ledgers, what those numbers actually mean to an enterprise and how to best communicate them to senior-level management.

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The authors include members of the business community and business educators from around the world, including nearly two dozen professors and lecturers from Bentley University, a business school in America that has successfully integrated liberal arts courses such as history and science into its curriculum.

Other contributors to the book include Anders Aspling, the Secretary-General of the Globally Responsible Leadership Initiative (GRLI), a joint venture between EFMD and the United Nations Global Compact, and Daniel LeClair, Executive Vice-President of AACSB. In the book’s foreword, Eric Cornuel, CEO and Director General of EFMD, notes that “the way forward is to help students to master both liberal arts and professional ways of thinking and foundations of knowledge. The idea that you cannot do both is based on a false dichotomy – or so this book argues – namely that professional education and liberal arts education represent a disjunction rather than, as we believe, the optimal conjunction”.

The fusion strategy of integrating the arts and sciences with business to provide a well-rounded education is not foreign to educators. Many schools, including Bentley, Exeter University in Britain and Griffith University Business School in Australia are already making major strides toward integrating their curricula. However, they are widely considered the leaders in a race that currently includes far too few participants.

“Although the dramatic global development of the past 25 years has influenced the way we educate, train and prepare managers and leaders, in most cases schools introduce issues regarding ethical behaviour, responsibility, and sustainability in separate electives or add-ons to the regular and traditional curricula,” says Aspling in his chapter, “Business, Management Education, and Leadership for the Common Good”. “Very few schools have attempted or succeeded in integrating these issues with their full operations – their mission, management, curricula, most programmes, teaching, and research.”

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Bentley University, for example, has introduced a double major option that allows students to concentrate on an aspect of the humanities such as Media Arts or Health Sciences not traditionally considered business disciplines. Also, some of the majors offered at Bentley are not specifically business oriented but fit into today’s global business regimen. Bentley’s Spanish Studies curriculum, for example, combines business study with exploration of language, culture, history and contemporary affairs in the Spanish-speaking world, one of the fastest-growing demographics in the global business world.

Additionally, Bentley plans to launch a masters programme in analytics so that graduates are not only proficient in the techniques of analytics but also gain solid exposure to the principles that ensure that analytics projects play a crucial role in an enterprise.

21% A recent study by Cisco predicts that in an “internet of everything” world corporate profits stand to climb by 21% over the next decade

14.4

The report identifies technology innovation as a $14.4 trillion opportunity for businesses in terms of reduced costs and increased sales

“Mastering these frameworks relies on a number of skills that one might call ‘soft,’ such as effective writing and creative thinking,” says Dominique Haughton, who penned the chapter, “Business Analytics at the Confluence of Business Education and Arts and Sciences.”

While the authors consistently identify the need for liberal arts, science and technology to be integrated into business programmes, the book also suggests that the opposite is true. There is a strong need for liberal arts majors to gain a solid understanding of the business principles that will allow the manager of a small arts theatre or museum to run an efficient business by having the skills to read a balance sheet and understand the financial implications of capital expansion or customer discounts.

Over the past decade, science and technology have radically altered the business landscape, including how enterprises make decisions on crucial business strategies. Technology’s role in enterprise cannot be understated. A recent study by Cisco predicts that in an “internet of everything” world (where all items are connected by tiny sensors and chips) corporate profits stand to climb by 21% over the next decade.

The report identifies technology innovation as a $14.4 trillion opportunity for businesses in terms of reduced costs and increased sales.

Similarly, retailers are collecting previously unavailable real-time data from shoppers, mostly through their mobile devices, which allow retail brands to communicate with customers, offer couponing directly to their devices and determine shopping trends that play a large role in marketing strategies.

The new availability of data is changing the job description for chief marketing officers virtually overnight and even creating new titles such as chief marketing technologists.

The accounting field is a prime example of a career path that has been altered dramatically by technology over the past 30 years. No longer do standard accounting practices cut it in industry – students must possess the tools and expertise to use the end results of accounting to benefit their company.

“An accounting student must know how to create an income statement and balance sheet. This base knowledge, however, is not enough anymore to ensure a successful start to an accounting career,” says Catherine A Usoff, in her chapter “Integrating Liberal Learning into the Accounting Curriculum”.

“In addition to learning the standard debits, credits, accounting rules, and other components of a core body of accounting knowledge, students must also learn how to think critically, to be able to compare and contrast and consider several different perspectives, and to apply ethical decision making.”

Business universities not only face the challenge of capturing and teaching the current technology trends occurring in the business world but also adapting to the same trends internally by using avenues such as hands-on learning in labs and online courses, and deploying technology found in the workplace.

Liberal education key to business success by John Johnson

The new availability of data is changing the job description for chief marketing officers virtually overnight and even creating new titles such as chief marketing technologists

Enterprises are becoming more comfortable with online training and education, possibly because of the rapidly evolving requirement for staff to learn quickly and act even faster. Companies are also taking advantage of technologies that allow distributed teams to communicate frequently and effectively from around the globe.

In his chapter entitled “Technology in Business Education,” author William T Schiano notes that Bentley University’s Graduate School has moved aggressively to blend traditional and online courses, implementing hybrid synchronous courses that allow students to participate during a traditional classroom setting or remotely.

“Email, learning management systems, and in-classroom projection have moved into the mainstream,” writes Schiano. “Podcasts and webcasts are often used as a complement to traditional courses.”

Daniel L Everett, the Dean of Arts and Sciences at Bentley University and the book’s co-editor, believes that it will prove controversial in some camps.

“I think that there are some schools that believe that arts and sciences add little to the quality of a business education, and there are those in arts and sciences who believe business is not at the same level of importance for education as arts and sciences,” he says. “For people who hold those perspectives it will be a controversial book, because we are saying that they are both vital to educating citizens and professionals for the future. I think that is controversial for a large sector of higher education.”

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A ROADMAP FOR BUSINESS SCHOOLS WHERE DO BUSINESS SCHOOLS GO FROM HERE? During EFMD’s annual conference in 2011, EFMD Vice Chairman Thomas Sattelberger offered a roadmap for businesses and universities to follow. A former executive at Lufthansa, Continental and Deutsche Telekom, Sattelberger’s presentation, “Management Education 2025,” noted that training the managers and leaders for 2025 is an ideological task that is as much about reason and emotion as intellect.

His other main points, as outlined in the book, include the following: • diversity of thought and action must be regained as key for innovation and progress • economic and social value creation must go hand in hand – for the best of the whole community • voluntary co-operation between people and organisations of different types must be developed and supported • reflection and self-knowledge are required for personal development.

Sattelberger had specific advice for business schools when it comes to educating the world’s future leaders.

• Managing companies must build on the stakeholder model; the pure shareholder model is outdated • Schools must move from classroom teaching to learning through experience • Research should concentrate on practical grounds • The map and the terrain are one and the same.

There is no urgent need for developing more maps. More important is to learn to hands-on navigate the actual terrain. How is this reflected in the training?

• Diversity of perspectives, knowledge, and experience among faculty, staff, students and clients • Training must include the knowledge of the environment and environmental threats, and how to create a society in harmony with the planet

ABOUT THE AUTHOR

John Johnson is a Boston-based freelance writer specialising in a wide variety of business topics, including education, technology, sustainability and marketing. He can be reached at jjohnson49@comcast.net

• Schools should develop partnerships with a wide variety of organisations to seek new ways to solve problems and meet challenges.

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David Altman and Roland Smith of the Center for Creative Leadership analyse why both developed and emerging economies may well suffer a leadership gap at all levels of business

THE LOOMING LEADERSHIP G A P S ay the word leader and it often generates an image of a charismatic person in charge or someone who sits in the “C-suite” (a corporation’s top executives) issuing orders to others.

Leadership development, too, has been highly geared toward senior-level people in formal organisations or those being groomed for senior roles. Indeed, most people see leadership development and executive education as synonymous.

But if we unpack what leadership development does rather than who receives it, it has a great deal of relevance to enhancing the effectiveness, satisfaction and productivity of all people in all roles.

In EMEA (Europe, Middle East and Africa) there is a looming leadership gap at opposite ends of the work pyramid. The gap at the top of the pyramid is more widely recognised in medium to large companies, many of them familyowned or controlled, struggling with succession planning and developing high potentials in the midst of an unrelenting recession.

But the leadership gap at the base of the pyramid is just as serious, with youth unemployment rising throughout EMEA by one estimate at an increase of 58% in Europe alone since 2006. Even those young people with jobs face enormous insecurity and demands to accomplish more with less. They dare not protest, much less ask for development, for fear of losing their jobs.

The looming leadership gap by David Altman and Roland Smith

We think the base of the pyramid represents vast untapped talent resources for future leadership and the top of the pyramid underutilises the potential of the senior talent that resides there.

The changing nature of leadership Since 2003, the Center for Creative Leadership (CCL®), a global leadership development provider and research body, has tracked changes in the nature of effective leadership.

It is clear that globalisation has enhanced the complexity of the challenges faced by leaders at every level. And the economic crisis seems to be accelerating the speed with which leaders need to find solutions for these core challenges.

The results of our research have implications for addressing the leadership gap by identifying needs and the kind of development to address those needs.

Senior leaders we surveyed ranked the top four complex challenges as: • Ability to lead and influence across multiple groups and challenges • Strategic issues – how to define and communicate a clear direction for the future and create organisational alignment • Talent management – recruitment, compensation, development, succession, human capital restraints and downsizing • Business operations and organisational performance

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We also explored more specifically the kind of leadership skills needed to address these specific challenges. The survey of senior leaders revealed development areas including: Leading across multiple groups We call this “boundary spanning leadership”.

The five mission-critical boundaries that leaders encounter are: • Vertical boundaries: dealing with upward relationships (such as the board of directors) and downward (direct reports) • Horizontal boundaries: leading across roles, functions and units • Stakeholder boundaries: outside the organisation (customers, communities, alumni and government) • Demographic boundaries: gender, ethnicity, nationality and culture • Geographic boundaries: across time zones and subgroups within geographies Developing the developers – the importance of coaching and mentoring Often seen as critical competences for effective leaders, coaching and mentoring are difficult skill sets to acquire. We have seen that when executives become more personally involved in and own the process of developing others, talent management becomes more effective and efficient. We encourage senior leaders to see themselves as orchestrators of talent.

If we unpack what leadership development does rather than who receives it, it has a great deal of relevance to enhancing the effectiveness, satisfaction and productivity of all people in all roles

58% The leadership gap at the base of the pyramid is just as serious as at the top, with youth unemployment rising throughout EMEA by one estimate at an increase of 58% in Europe alone since 2006

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Take Germany as an example. The country, the fourth largest economy in the world, is still an economic powerhouse. However, the on-going economic crisis and the problems of the single currency weigh heavily on the German economy.

PHOTOS © CCL

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Demographics Germany has one of the lowest birth rates in Europe. In a Financial Times interview, German labour and social affairs minister Ursula von der Leyen said that “if we do not change our ways of working… then we will have six million potential workers less in the labour market, which is approximately the working population of Bavaria”. And the Der Spiegel magazine quotes family minister Kristina Schroeder warning that “companies cannot allow themselves to let good staff leave”.

24%

The economic crisis made the numbers of unemployed young people skyrocket – across Europe 24% of employable young people (15-24 years old) are without a job.

In some countries, such as Spain, this rate has long surpassed 50% and is still rising

44%

The proposed EU directive for the promotion of women’s representation on corporate boards of administration is inspired by Norwegian legislation in place since 2004, which increased the proportion of women on boards from 8.5% in 2003 to 44.2% in 2008

When Europe emerges from the recession, Germany may be well positioned for more growth. But there are ominous clouds on the horizon that arise from three problem areas:

Addressing the leadership gap at the top Many have argued that the economic downturn has created a cease-fire in the much-ballyhooed “war for talent”. We believe that the fundamental issues around talent remain and that organisations will pay a steep price in the future if they do not invest in the development of talent. While the “war” may be on hold, the root challenges remain front and centre stage.

Economic uncertainty and unemployment are still rife throughout the world, so one would think that employers have the upper hand, able to choose among the hordes of people knocking on their doors or sending CVs with pleading emails.

But the reality is not that simple. A prolonged period of cutbacks, reductions in human capital investment and extreme reliance on existing top performers – all in an atmosphere of uncertainty and scarcity – can easily undermine an organisation’s ability to attract, develop, retain and engage skilled, valuable employees.

From what our clients tell us, this is contributing to a major leadership gap in EMEA and particularly in the eurozone.

The imperative to go global German companies excel in productivity, quality, technology and innovation. As they go global, they need to excel at developing the best leaders and leadership-rich business cultures with a deep pipeline of talent. Weak or too rigid leadership could lead to a decline in global effectiveness.

In Germany, and indeed throughout EMEA, the organisational pipeline of key people and future leaders is more important now than ever before. Yet the talent management processes in many companies are missing the mark. They see talent management as something done to and for high-potential employees in service of the organisation’s needs. But another emerging perspective is the key to effective talent management: the view from inside the pipe.

Employees and managers inside the leadership pipeline do not see themselves as a stream of talent to be funnelled and directed by the organisation. They bring their own perspectives, desires and experiences to the process. Leaders must understand what is happening if they expect to have the talent needed to meet the challenges and opportunities they will face two, five and ten years down the road. Paying attention to the view from the pipe will not only pay dividends in the future but also increase the engagement of key talent immediately.

The looming leadership gap by David Altman and Roland Smith

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Women leaders Our research shows that diversity is an essential ingredient of organisational performance.

Women can provide an important element of diversity that is rich with potential for all sorts of organisations.

Our work with underserved groups has proven that a growth mindset and self-efficacy are powerful tools for individual development.

We think a programme framed by these tools can give young people in EMEA the ability to change their lives and move out of a situation that many view as hopeless.

This year will be an important one for women’s careers in Europe. Legislation tabled by European Commission Vice President Viviane Reding is set to take a good shot at the “glass ceiling” that keeps women in lower-level roles with lesser influence and smaller salaries.

Other key elements of youth leadership development are: – Interpersonal skills: In leadership, the ability to develop positive relationships with other people is particularly important. The foundation of this ability is the capacity to respect people from differing backgrounds and to understand the perspectives that they bring. A key interpersonal skill is being able to communicate information and ideas clearly and to work to understand what others are saying, thinking and feeling.

The proposed EU directive for the promotion of women’s representation on corporate boards of administration is inspired by Norwegian legislation in place since 2004, which increased the proportion of women on boards from 8.5% in 2003 to 44.2% in 2008.

– Learning Orientation: When an individual has a propensity to learn, he or she recognises when new behaviours, skills or attitudes are needed and accepts responsibility for developing them. The individual understands and acknowledges current personal strengths and weaknesses and engages in activities that provide an opportunity to learn or test new skills and behaviours.

Scalable leadership and the challenge of youth unemployment Currently, little research and practice on talent development relates to anything beyond larger, well-resourced organisations.

CCL’s recent work has focused on creating overarching frameworks for leadership and leadership development that extend beyond the context of the workplace to encompass how people work together and grow as leaders.

The majority of people in the world are young and in some parts of the world many of them are unemployed. Not only is there a problem of joblessness but there is also a problem with lack of sufficient education or training.

The economic crisis made the numbers of unemployed young people skyrocket. For example, across Europe 24% of employable young people (15-24 years old) are without a job. In some countries, such as Spain, this rate has long surpassed 50% and is still rising.

Rather than viewing these young people as drags on society, what if we saw them as the pipeline of future leaders? How should we invest in their development and how can we provide them with experiences that will help them lead Europe, indeed the world, to new frontiers?

We think there is an opportunity in EMEA to provide scalable, affordable leadership development to this underserved demographic and show the rest of the world how to better leverage emerging talent.

ABOUT THE AUTHORS

Dr David G Altman PhD is Vice President and Managing Director of the Center for Creative Leadership (CCL) EMEA and Dr Roland B Smith PhD is Senior Faculty and Lead Researcher at CCL Youth unemployment data were supplied by The Entrepreneurs’ Ship, a non-profit project headed by Peter Vogel, which aims at promoting entrepreneurship in areas with high unemployment and limited career options

Conclusion There is an urgent need to look at leadership issues in large organisations and at the grassroots level. To meet future challenges, development approaches have to be relevant from the C-suite to the slum to the rural village.

As we reflect on these issues, we return to a few fundamental questions: • What would our world look like if everyone had access to leadership development?

• How would the field of leadership development change if we stopped considering it synonymous with executive education?

• How can we better build and unleash the talent in our organisations and communities during times of fiscal constraint and macroeconomic challenges?

The answers to these and other questions will determine whether leadership development will be relevant in the decades to come.

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French business school SKEMA is opening campuses around the world, including a unique venture on the American mainland.

Pascal Vidal details the how and why

SKEMA’s ambition is to be a global business school, which, through its research and teaching programmes, trains and educates the talented individuals that 21st century businesses require Alice Guilhon Dean of SKEMA Business School

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ince its creation in 2009 through the merger of CERAM Business School and Groupe ESC Lille, SKEMA Business School’s challenge has been to create a global, multi-campus, fast-growing school. Working closely with international and national companies, it aims to train responsible, open-minded and mobile managers who will be able to: • develop successfully in a multicultural context and in a globalised knowledge economy in organisations of any size in any country • Contribute to the development and sustainable performance of their organisations through their ability to innovate, their technical skills, and their cross-disciplinary and international culture.

Its founders always envisaged SKEMA as a multicampus school, with centres in Europe, Asia and the Americas. The merger created three campuses in France – Lille, Paris and Sophia Antipolis near Nice – and one in China in Suzhou near Shanghai.

But the school still lacked an American campus.

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The SKEMA merger created three campuses in France – Lille, Paris and Sophia Antipolis near Nice – and one in China in Suzhou

A French debut in America by Pascal Vidal

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It also fitted in well with SKEMA’s existing strategy of locating its campuses in top research areas. The Lille campus, for example, is in the Euralille business district and close to the EuraTechnologies and Eurasanté technology parks while Sophia Antipolis is a technology park. In 2010 SKEMA signed a university-level partnership agreement with North Carolina State University (NC State), one of several top universities in the area, to establish a campus in Raleigh.

PHOTOS © SKEMA

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The first five semesters of operations have already demonstrated the quality of the partnership with NC State and the dynamism of the environment for SKEMA students, faculty and staff.

With support from the SKEMA strategic orientation committee and its international advisory board, an extensive research study was set up to identify potential locations in America. From this a short list was developed and SKEMA established contacts in this area and began to visit them.

While there is no perfect location, partner or environments, there are combinations of these that are more attractive than others.

After months of careful study, it became more and more obvious that North Carolina, especially the area around Raleigh, was the place SKEMA was looking for, where universities, companies and local authorities worked together to contribute to the development of a knowledge economy.

In particular, Research Triangle Park (RTP), a leading high-tech research and development centre created in 1959, is renowned for its robust economy and innovative work. There are now over 170 companies employing 42,000 workers at RTP.

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35% of SKEMA Business School’s international students come from over a hundred countries (in 2012/13), with 30% international faculty

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SKEMA is situated in Research Triangle Park (RTP), a leading high-tech research and development centre created in 1959, with over 170 companies employing 42,000 workers in the park

By September 2012, just two years after welcoming the first students to Raleigh, SKEMA and NC State have launched their first two joint degree programmes, one at the bachelor level and one at the masters level (a Master of Science in Global Luxury Management in partnership with the Poole College of Management, the College of Textiles and the College of Design at NC State). Collaboration has also started with the College of Engineering and the School of Public and International affairs.

SKEMA is the first non-American business school ever to launch a real campus in America to serve its international students and is also the first non-American Business school to be granted the right to invite international students to study in America by Homeland Security.

SKEMA is, of course, not unaware of critics who ask what is the point of a French business school setting up shop in America?

Well, if the SKEMA Raleigh campus was a just a French campus it would certainly be a waste of time, money and energy.

But SKEMA Business School is more than a French business school; it is truly an international school with 35% of international students coming from a hundred countries (in 2012/13), with 30% international faculty and most of its programmes delivered completely in English.

A French debut in America by Pascal Vidal

SKEMA aims eventually to become a truly global school along the lines of Gabriel Hawawini’s definition: “A truly global school is one with complementary and interconnected campuses located in the three major economic regions of the world (The Americas, Asia and Europe)”.

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SKEMA is the first non-American business school ever to launch a real campus in America to serve its international students

SKEMA Business School is also becoming more and more global as the student experience becomes global, with the guaranteed opportunity to move internationally every single semester on any of the SKEMA campuses if they wish, and if it makes sense for their education.

The internationalisation of higher education, though a relatively recent phenomenon, is underway and accelerating. As an example, in 1997 AACSB (established in 1916) accredited its first school outside North America. By 2012 it had accredited more than 650 institutions in almost 50 countries. EFMD’s EQUIS (established in 1998) covers some 140 institutions in nearly 40 countries.

31%

The international mobility of students is growing; up 31.3% from 2005 to 2009 according to UNESCO – in 2009/2010 there were 3,324,871 “students abroad” around the world

In addition, the number of students enrolled in the higher education system is growing. In the next 30 years, according to UNESCO, more people will be graduating than since the beginning of history. On top of that the international mobility of students is growing too; up 31.3% from 2005 to 2009 according to UNESCO. In 2009/2010 there were 3,324,871 “students abroad” around the world.

America is by far the most popular destination for “students abroad”, attracting 723,277 students in 2010/11 and the population of international students in America is growing (+32 % since 2000/01).

Meanwhile, 270,604 American students studied abroad for credit in 2009/10. Though this population has more than tripled in 20 years it represents only 1.4% of the American student population and 56% of them are abroad only for the summer or eight weeks or less.

To conclude, SKEMA will become increasingly global as its students, faculty and staff transform the school itself as they circulate between its various campuses.

SKEMA students experience global realty as they work with multicultural distributed teams around the world (with a 12-hour time zone difference between our American and Chinese campuses).

Such a work environment will be the future for most if not all students. At SKEMA it is already their day-today working environment.

PHOTO © SKEMA

For SKEMA students one of the key benefits of the Raleigh campus is that while on campus they are students of NC State University. As a result they have: • a real US campus experience • access to the facilities of an innovative American university, including the new Hunt library, across the street from the SKEMA campus and probably one of the most advanced libraries in the world • mixing with US students for social, multicultural and academic activities from day one when arriving on campus; in 2012 80% of Raleigh Campus students had American roommates • courses with local and international faculty. Last semester only 20% of the faculty teaching on the SKEMA Raleigh campus had a French passport.

In 2012 there were 20 student nationalities on campus

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ABOUT THE AUTHOR

Pascal Vidal is a professor of information systems management at SKEMA Business School and the first SKEMA US campus Director.

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How can African business schools best serve the often unique needs of African businesses and peoples? Moustapha Mamba Guirassy gives one example from Senegal that may serve as a guide

MANAGEMENT IN AFRICA “A

human being is by nature a political animal,” said Aristotle. Antiquity believed that it is only by living in the human community that a man or a woman acquires their humanity. That is why Aristotle also said that “to live alone, one must be a beast or a god”.

It should be noted, however,that we only achieve our humanity through a psycho-social integration process we now call education. Initially the reserve of the family, clan, tribe or lineage, over time education has become theconcern of the whole community. Determined by its own concerns, the specific problems occurring in its environment, its history and its teaching materials, each community develops its own educational system to form a type of human being who embodies its identity and who works for its progress.

However, mainly because of colonisation, the African education system (and in particular the field of management education) was and is in large part more to do with training that meets the needs of other communities rather than its own. It trains for others rather than for itself.

It is the difficult relationship between the orientation of the African education system, in particular in management, and African identities (understood in terms of needs and expectations of the continent) that this article now examines.

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Management education in Africa needs an objective assessment of the existing situation to identify strengths and weaknesses in the three key elements: • Business school and community • Incubation projects • Research policy

Management in Africa by Moustapha Mamba Guirassy

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The African education system (and in particular the field of management education) was and is in large part more to do with training that meets the needs of other communities rather than its own – it trains for others rather than for itself

Transfer factors and the current situation Change factors in business schools are many and various – individual and collective, material and spiritual, qualitative and quantitative – making it difficult to identify a specific factor responsible for a particular change. But, generally,there are two broad categories of factors: internal and external.

Internal factors African societies are hierarchical and/or stratified, leading to conflicts, which are, according to Marxist sociology, decisive factors in social change. In traditional African societies, stratification revolved around caste, professional, gender, cultural, demographic and geographic considerations, which caused conflicts and thus changes in behaviour.

External factors External factors have been the most critical in leading to profound changes in the political, economic and sociocultural agendas of Black Africa.

These factors range from slavery to globalisation through colonisation, neo-colonialism, Islamisation and, in particular, new forms of American and Chinese imperialism.

When Canadian communications guru Marshall McLuhan likened the world to a global village, he implied that Western societies are at the centre while all the others are relegated to the periphery.

A similar consideration is found in two noted political scientists and authors, Francis Fukuyama (The End of History and the Last Man) and Samuel Huntington (The Clash of Civilizations), who supported the thesis that American capitalist and democratic models were able to be imposed worldwide with only limited resistance.

This is, one might say, an extension of the colonial model, whose concern was to weaken colonies by establishing a system of economic and cultural exploitation. Thus the trading economy began to take shape, which led among other things to the change from food crops to cash crops, manufacturing, the creation of urban clusters and so on.

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At Institut africain de management (IAM) in Senegal, real efforts have been made for more than a decade to achieve and improve a joint school – community partnership

For the effective management of a trading economy, the colonial administration needed to rely on a local workforce trained in a certain way to be totally at the service of this large-scale exploitative system. Hence they trained factory workers, dockworkers, health workers, veterinary officials, tax collectors, translators, security guards and so on. There was no room for private initiative. It was all about taylorism and mimicry.

Today, more than half a century after the independence of most African countries, this model is far from being abandoned.

Indeed, the phenomenon of neo-colonisation suggests that the independence of African countries in the fields of economy, politics and culture is only nominal. They still remain heavily dependent on the decisions and policies of the former colonial powers.

Added to this is the installation in many African countries of subsidiaries of foreign corporations that tend increasingly to dominate African economies. There is also a poor perception of business, which is not seen to compare well with a career in politics or the civil service.

In this context, business schools are effectively training people for the business development of companies controlled by foreign, and especially Western, concerns.

Fifteen years ago, there was only one university in Senegal, with no management faculty. The first management school, Cesag, opened around 1990.

The University of Dakar only opened a management faculty in 2000 though so far it is more about administration than business.

This inevitably leads to a gradual disappearance of traditional knowledge and skills and, in some cases, profound ruptures between a business school and the community. We are here in the presence of factors that can significantly block local entrepreneurship by putting schooled people at the service of subdivisions of large multinationals.

Therefore, changes need to be made and these will be addressed in the next section.

Some alternative proposals In light of the problems outlined above, it is clear that reconsideration of the current system of training is now more necessary than ever.

This needs to be based on an uncompromising and objective assessment of the existing situation to identify strengths and weaknesses and to outline recommendations and suggestions that can contribute to strengthening management training in Africa.

There are three key elements: Business school and community At Institut africain de management (IAM) in Senegal, real efforts have been made for more than a decade to achieve and improve a joint school – community partnership. These efforts include the introduction of modules such as: • African anthropology and sociology • Fulani and Mandingo languages for business • Economic intelligence • A strong policy towards the corporate world • Research on entrepreneurship To this is added an immersion programme, where IAM students move every year for ten days to a little-known African environment for exploration, adaptation, identification and development of community potential.

Management in Africa by Moustapha Mamba Guirassy

Incubation projects IAM aims to help students achieve what is called a “Profile Djily”, or an entrepreneur profile. (Djily Mbaye was a renowned Senegalese entrepreneur, locally trained and oriented towards agribusiness and real estate).

We learn lessons from the business–savvy Baol-Baol community, of which Djily Mbaye was a member.

Members of the Baol-Baol community are not generally schooled in formal systems. They are self-taught. Yet they thrive in business, thanks to their sense of risk-taking and their work ethic.

Research policy Research policy at business schools should pursue the objective of updating the knowledge and know-how of the training given to students. At IAM, research policy revolves around the need to contribute to the renewal of knowledge and, correspondingly, to strengthen and improve training.

IAM is strongly committed to excellence and to the elucidation of fundamental issues that cross the African continent and has established three research laboratories in social sciences, financial engineering and computational techniques.

The Social Science lab, where there are researchers and academics but also students in the final phases of their programmes, works from systemic and multidisciplinary approaches to make sense of some key issues that challenge African societies in general and communities in WAEMU(the West African Economic and Monetary Union) in particular.

The critical themes concerning the lab relate to the problems of borders, political and economic governance, family businesses, CSR in Africa, the rural economy, social and institutional changes, macro-economic and macro-political settings, and cultural determinants of development.

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IAM is strongly committed to excellence and has established three research laboratories in social sciences, financial engineering and computational techniques

The Financial Engineering Lab, led by senior financial experts, is a melting pot of examination, analysis and solving of issues related to finance that challenge our communities.

These include currency issues, the financial policy of African business, micro-finance, access to credit, the impact of financial institutions, sub regional, regional and international fragile economies of the continent, Islamic finance and the financial environment of WAEMU States.

Finally, the Computer Techniques lab, which is cross-functional because its studies are undertaken to be made available to other labs, has a particular interest in the development of African societies.

The lab’s studies revolve around various issues such as the identification, implementation and use of appropriate software in the business environment in Africa, computers in family businesses and African SMEs, ICT control and development across the continent, and training strategies to reduce the digital divide between North and South.

Let us say in conclusion that our business schools have come a long way. They have learned from their strengths and weaknesses but also from the experience gained by others, either on the African continent or in other places. That is why the work done in teaching and research consortia such as EFMD and AACSB is an important element in the uninterrupted movement towards excellence.

ABOUT THE AUTHOR

Moustapha Mamba Guirassy is Director of the Institut Africain de Management (IAM) in Senegal.

FURTHER INFORMATION

IAM will host the EFMD Africa Conference from the 13-15 of November.

Full details can be found on the EFMD website www.efmd.org

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Business schools from emerging economies need to embrace UN PRME, argues Umesh Mukhi, and suggests some ways they could do it

UN PRME & emerging economies by Umesh Mukhi

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ne of the most important questions asked among management educators in the last five years has been “how can business schools change their practices?” The United Nations Principle for Responsible Education (UN PRME) initiative addresses this question directly.

However, though UN PRME has approximately 470 signatories one of its major concerns is the low number of participants from emerging economies. (Asia has 51 signatories. Africa and the Middle East have 31. Latin America has 64. Eastern Europe has 46. This compares with Western Europe with 157 and North America with 108.)

Internationally, management education has recently been mainly criticised for its supposed over-emphasis on an economic and financial approach at the cost of stakeholder concerns. In this context, do business schools from emerging economies (BSEE) have a major role in shaping the management education scenario of the 21st century?

While management educators have been concerned with a number of different issues related to emerging economies, the issue of emerging economies themselves embracing responsible management education through UN PRME principles has hardly been raised.

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This compares with UN PRME signatories in Western Europe which has 157 and North America with 108

One of UN PRME’s major concerns is the low number of participants from emerging economies – Asia has 51 signatories, Africa and the Middle East have 31, Latin America has 64, and Eastern Europe has 46

The scenario Since its inception management education has been dominated by the North American culture.

The institutional structure and curriculum in business schools are very closely tied to the North American context. Standardised education models and curricula have resulted in graduates grasping the same theories and principles of doing business without questioning and reflecting on issues related to social, cultural and political trends at national and international level.

Given the fact that there is a surge in demand for management education in emerging economies and that it is normal for schools to focus on standardised ways of teaching, recruiting and running the institution, they have little time to reflect on emerging paradigms. As a consequence, BSEE tend to forget that by losing this reflection they are possibly missing a substantial competitive advantage. Many schools from developed economies capitalise on the UN PRME framework by taking up voluntary initiatives. BSEE, on the other hand, are lost in oblivion in the race to impart regular management education.

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Why? But, still, why should BSEE embrace PRME? The answer to this lies in the self-interest of business schools if they realise the potential contribution they can make. Today we see emerging economies shaping the scenario of existing business practices and reinforcing new global trends. BSEE have a huge potential to exploit this phenomenon and use their national context to reinforce new management education trends.

Responsible management education is not only limited to environment issues. It extends its horizons to human rights, labour rights, issues related to corruption and many existing socio-political issues.

Among BSEE there is a category of schools that has an inbuilt capacity to spearhead responsible management education. And they can extend their foresight to focus on the issues mentioned above.

In a recent article in Global Focus (“What does business want from business schools? Vol 6 Issue 3) Sir Richard Lambert suggested that the answer would be graduates with skills to deal with sustainability issues, diversity management, market uncertainty and changing governments.

Emerging economies and BSEE can capitalise by imparting such skill sets because these conditions tend to exist naturally in their national context.

For example, at a recent conference addressing CSR, a panel discussion focused on CSR trends in emerging economies. During the discussion one of the panellists talked about CSR in an Indian context.

He explained that CSR in India was actually two concepts.

How? So how can BSEE embrace UN PRME and lead the change? My research related to business schools suggests that leading schools are just that because of three unique abilities: Confidence Leading schools have confidence in their resources and capabilities. Faculty empowerment for research and pedagogy is always at the heart of such schools.

In any new initiative to be undertaken they have confidence in their organisational capabilities to open up towards experimentation in research, pedagogy and strategy.

Innovation Innovation in a school towards new research and partnerships, in pedagogy and challenging existing trends is a mindset. Good schools are exceptionally reflexive to external environments and act innovatively. While other business schools are tied up in the world of ranking and competition, foresight and innovativeness allow leading business school to focus on their resource and capabilities to pursue thought leadership for the future.

The first concept of CSR was naturally a part of the way of life in India, where people lived in harmony with nature.

The second concept of CSR is a western school of thought based on social philanthropy and community engagement.

As a result, the first concept of CSR hardly finds a place in the curriculum compared to the second.

This lack of effort to emphasise the first concept results in losing a mass of knowledge that exists in the national context. This comes at the cost of depriving the international community of the ability to explore the implications of new knowledge.

Responsible management education is not only limited to environment issues. It extends its horizons to human rights, labour rights, issues related to corruption and many existing socio-political issues

UN PRME & emerging economies by Umesh Mukhi

Co-operation Leading schools are known for high levels of co-operation among their trusted network of stakeholders. Co-operation is a unique capability of a school to traverse the national context and interplay with international actors towards achieving a determined goal. As stakeholder management in itself is an art, BSEE need to have a broader vision of partnerships through which they can widen their horizons. For example, UN PRME signatories can co-operate with UN Global Compact Local Networks and business schools in the region.

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BSEE should take into account novel partnerships with stakeholders available at local, national and global level; they all want to collaborate with BSEE in some way or another

These factors are tacit and are intertwined with the internal organisational structure and culture of a business school. Not all BSEE are equipped with these factors and therefore we see lack of commitment in their approach. If BSEE are to lead trends they have to apply these factors to their daily approach and challenge existing ideas.

What?

The question which BSEE very often raise is what is the outcome of such initiatives? As mentioned before, it is up to business schools to decide what kind of output they expect. Of course doubts may also include whether such initiatives are profitable or not.

The Opportunity BSEE have a huge role to play in facilitating knowledge transfer and enhancing experiential learning by initiating new projects at faculty level.

Using UN PRME as a facilitator between networks, BSEE can benefit from a plethora of partnerships.

BSEE should take into account novel partnerships with stakeholders available at local, national and global level; they all want to collaborate with BSEE in some way or another.

If BSEE are well equipped with the three capabilities detailed above they can contribute significantly to the existing scenario. If a school wants to lead more on the research aspect of sustainable development, it can do so by research co-operation and projects under UN PRME. If the target is to develop strong ethical skills sets among executives it can co-operate with top trainers and mentors in the field of responsible management.

Schools may often use UN PRME for branding purposes but it also provides a comprehensive learning platform for dialogue and for networking for tangible purposes. It is up to schools to use the UN PRME platform to initiate new projects and work collaboratively with schools from developed economies. We hear about strategic partnerships between schools from developed and developing regions but often they are limited to exchange programmes.

BSEE should first establish confidence in their capabilities; they should realise that they cannot be followers any more. Only after identifying their unique capabilities can business schools ramp up their efforts in a particular direction. This will result in developing the unique identity of each school.

Individual BSEE may take minor steps but collectively at a global level they can contribute to a change in mindset. Individual efforts are always appreciated but collective efforts from BSEE from all spheres would ultimately create change in the mindset of existing practices and promote thought leadership. This, by default, is the first and foremost responsibility of business schools.

ABOUT THE AUTHOR

Umesh Mukhi is PRME researcher in residence and doctoral student in management at Audencia Nantes School of Management, France. His research focuses on the integration of sustainability in business schools and management education. umukhi@audencia.com

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Risk managemenT ante portas Ulrich Hommel and Anna Pastwa present the results of the EFMD Risk Management survey and argue that most business schools have just begun to look at this issue more seriously

Risk Management ante portas by Ulrich Hommel and Anita Pastwa

T

he issue of risk is receiving increased attention in business schools.

They have increasingly to rely on entrepreneurially generated funds to finance growth, to compensate for reduced government appropriations and to support cross-subsidisation schemes in wider university structures. These revenue streams are exposed to various forms of market risk.

Oversight bodies such as the British HEFCE and the Australian TEQSA have begun to look at risk more seriously and have amended their audit frameworks to include the risk-based regulation of higher education institutions, which has a trickle-down effect on business schools.

EFMD’s accreditation service EQUIS has recognised the growing relevance of risk taking and has amended its standards to ensure that the quality review captures any issues threatening the economic and reputational viability of applicant institutions.

These changes were designed as an encouragement for business schools to think about managing their risk exposures more explicitly. Yet very little is known about the actual state of risk management in business schools. To answer this, EFMD has conducted a survey of business school deans to gauge the degree of organisational formalisation of the risk management function in terms of governance, management and mitigation policies. The feedback provides a snapshot of achievements and remaining actions needed.

The questionnaire-based survey was carried out in the last quarter of 2012, coupled with the annual Deans Barometer survey. A total of 708 deans from the EFMD business schools network were invited to participate.

More than 200 responses have been received with 103 questionnaires being sufficiently complete to qualify for further analysis (a response rate of 14.3%).

Most of the schools taking part in the survey were based in Europe (57%), 12% in the Middle East and North Africa (MENA), 12% North America, 7% Central and South America, 13%

EFMD Global Focus: Volume 07 Issue 02 | 2013

Asia and 5% Australia and Oceania. This allocation matches the geographical distribution of the EFMD membership.

Two-thirds of the deans participating in the survey lead university-based business schools.

A quarter of the reporting schools operate independently. The remainder represents other institutional forms. Although the vast majority of schools operate in a not-for profit setting, 5% of the respondents represent for-profit organisations. Threequarters of the respondents indicated that their school had been granted at least one international accreditation label.

The survey results provide valuable insights into the attention currently devoted to the management of risk. For good reason, the organisational response differs greatly within the sector.

Business schools differ greatly with respect to the risk exposures they face. The general business model ( a focus on post-experience versus pre-experience education), funding constraints or the degree of internationalisation all have a profound impact on the volatility of net surpluses.

Business schools are also constituted in different ways with the spectrum ranging from private stand-alone business schools with no major endowment (high risk) to traditional faculties of management embedded in public universities and with far-reaching funding commitments by the government (low risk). But even the latter type needs to worry about implications of risk taking though this is mostly focused on reputational matters (for example, unethical behaviour of faculty).

The survey results send a strong signal that risk has been identified as a relevant issue by business schools but that it is still receiving limited management attention.

This is not surprising. The rising prominence of risk is a fairly recent phenomenon closely linked to the economic turmoil of the financial crisis and its aftermath. The likelihood of funding gaps has also increased as a result of

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200 More than 200 responses have been received to the questionnaire-based survey with 103 questionnaires being sufficiently complete to qualify for further analysis (a response rate of 14.3%).

EFMD’s accreditation service EQUIS recognised the growing relevance of risk taking and amended its standards to ensure that the quality review captures issues threatening the economic and reputational viability of applicant institutions

75% Three-quarters of the respondents indicated that their school had been granted at least one international accreditation label

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73% 47% Nearly three-quarters (73%) of schools surveyed have begun to define their risk appetite and include this aspect in their communication with key stakeholders

For 47% of the responding schools, the responsibility of exercising risk control rests with the school board, while 8% have assigned this task to a sub-committee of the board

As a matter of principle, a fixed school-wide rhythm of risk assessment is inappropriate since each risk factor has its own time line. For one thing, risk-related information arrives in variable frequencies. Adjustability of performance levers and the general ability to mitigate particular risks play a role as well.

The allocation of risk management responsibilities further supports the view that risk management is still a fairly immature activity in business schools.

government policy, be it in the form of visa policies constraining the inflow of foreign students or general cutbacks as part of fiscal austerity programmes.

Nearly three-quarters (73%) of schools surveyed have begun to define their risk appetite and include this aspect in their communication with key stakeholders (with 25% of the sample firms being satisfied with their approach in dealing with this issue). Seventy-five per cent of respondents argue that the tolerance for risk has become part of their school’s decision-making culture, with 30% feeling comfortable with the current state of affairs.

Nearly the same feedback has been received on the question whether risk tolerance guides operational and strategic decisions.

For 47% of the responding schools, the responsibility of exercising risk control rests with the school board, while 8% have assigned this task to a sub-committee of the board. University parents (such as the chancellor or vice-chancellor, CFO or president) control 37% of the cases directly.

The distribution of answers reflects the aforementioned sample diversity but may also point to a one-sided focus on managing the financial dimension of risk. If the board is involved in the governance of a school’s risk function, then basic management principles have generally been adopted and laid down in a guideline document.

This is in line with current corporate practice.

However, the lack of prioritisation of risk management is reflected by the fact that 28% of respondents link risk assessments to annual reporting. Twenty per cent of sample schools assess their risk situation on a quarterly basis (10% monthly) while 32% of respondents indicated that risk assessments are carried out as needed.

Twenty-two per cent of schools surveyed follow corporate practice and assign the responsibility to the executive board (senior management team). It ensures that the strategic and operational dimensions of risk management are properly accounted for and that the school’s management skills and market knowledge are utilised more broadly in the evaluation of risk exposures. Two schools have gone so far as to appoint a risk manager, which can be a necessary complementary step for large, financially complex organisations.

While 61% entrust the dean with the task of managing risk, deans are likely to be overburdened with other tasks, which can easily translate into systemic risk ignorance. In this context, it also not surprising that 74% of schools do not have a special budgetary allocation to support risk management activities. Only a minority of schools (11%) have not yet assigned risk management responsibilities.

When asked what tools are employed to assess risks, 58 respondents mentioned SWOT analysis, possibly in combination with other techniques (multiple responses possible). This is, at best, a first-cut analysis to identify general problem areas on a strategic level.

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Only 34 schools have adopted a state-of-theart approach, where exposures are managed on the aggregate level to limit the likelihood of a risk-related performance shortfall

Risk Management ante portas by Ulrich Hommel and Anita Pastwa

Fifty schools use risk checklists. They represent so-called laundry lists of relevant risk factors and may also include links to performance levers and the assignment of operational responsibilities for managing these risks. Twenty-four schools compile risk matrices/maps, which rank risk factors in two-dimensional space according to “likelihood of occurrence” and “severity of impact” (for example, high, medium, or low).

Twenty-two schools attempt to measure the impact on performance with sensitivity analysis, while seven engage in full-fledged simulation analysis. The former technique studies how school performance co-varies with fluctuations of individual risk factors, while the latter considers the combined influence of all risk factors and therefore also accounts for the correlation of risk factors.

Overall, the majority of schools focus on the identification of risk factors and it is unclear how they actually measure the risks and their impact.

It is noteworthy in this context, however, that 35% of schools are considering the adoption of a more formal risk management framework in the near future.

Most schools are selective risk takers – only 24 claimed that they have designed operations to avoid major risks altogether. The majority of schools (66) focus on the reduction of key risks, which is, first of all, in line with the way risks appear to be assessed and, second, takes into account diminishing returns from adding additional risk factors into the risk management framework.

35%

It is noteworthy in this context, however, that 35% of schools are considering the adoption of a more formal risk management framework in the near future

Only 34 schools have adopted a state-of-the-art approach, where exposures are managed on the aggregate level to limit the likelihood of a risk-related performance shortfall (which follows the cash-flow-at-risk philosophy).

When asked how to respond to an expected decline in business volume, respondents showed considerable reluctance to touch the core of their operations. This for instance includes reducing the size of the core faculty (and increasing the reliance on adjunct faculty) as well as staff size overall, increasing teaching loads, mothballing infrastructure upgrades or reducing core administrative budgets such as marketing and communications. They would much rather seek to scale up activities less affected by the downturn (and possibly even to diversify into new activity areas) or to increase the admission yield.

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Business schools may easily find themselves between a rock and a hard place where the preferred crisis measures prove themselves ineffective. The ultimate purpose of risk management is to avoid such a dilemma

Finally, schools were asked how they would be coping with an unexpected performance shortfall.

The answers underscore the rising importance of implementing a well-functioning risk management system as part of regular business school operations.

Schools seem to be relying on a combination of two counter-measures: intensifying fundraising efforts and generating short-term revenue increases. If budget cuts are deemed to be necessary, then schools have a slight preference for reducing the non-academic budget. Liquidity reserves are available for some schools, but the overall sample is positioned neutrally via this option.

Obtaining emergency funding from the parent organisation is not considered a viable option by most sample schools, but may nevertheless be available if really needed.

Recent history has shown that such shortfalls are often triggered by a macroeconomic downturn and, hence, discretionary funding from donors and sponsors or opportunities for scaling up existing activities may simply not be available.

Business schools may therefore easily find themselves between a rock and a hard place where the preferred crisis measures prove themselves ineffective. The ultimate purpose of risk management is to avoid such a dilemma.

The results of the survey signal that risk management is noticeably moving up the priority list of deans. For most business schools, however, there is still some road to travel before this activity will have been established with a sufficient degree of professionalism.

ABOUT THE AUTHORS

Ulrich Hommel and Anna Pastwa are respectively Director and Manager of the EFMD Research and Surveys Unit

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