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Executive Education Initiative Shows Significant
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n FY2002, just before Executive Education Director Amy Gillett joined WDI, Executive Education delivered five programs, all in the Czech Republic and Croatia. Last year (FY2005), WDI ran 14 programs in eight countries, including two in the Middle East, as well as programs in Chile and Ecuador. Revenue in FY2005 grew by 46 percent.
In the current year (FY2006), Executive Education will deliver at least 20 programs for approximately 1,300 managers in nine countries. At least five of the programs will be in countries where the Institute has not delivered programs before. Geographic Expansion Gillett continues to add new programs and new countries to the list. Three years ago, all of the programs were in central Europe. This year, WDI is well on its way to establishing a global presence, with programs in central Europe, central Asia, the Middle East and North Africa, and Latin America.
WDI’s Executive Education is scheduled to run its first programs in Turkey this spring. Partnering with Sabanci University, a leading business school in Turkey, the Institute will deliver a Brand Equity program. Another new country where WDI will deliver its first program is Slovenia. A two-day brand program will be run in March in Ljubljana in partnership with the Zagreb School of Economics and Management. The Institute also will deliver programs for the first time in Guatemala and the Dominican Republic. In Guatemala, a Brand Equity program will be run in May. A Leadership seminar will take place in the Dominican Republic in June. Those two programs, plus the one already held in Ecuador, will be co-sponsored by Seminarium, a Chile-based firm that conducts executive education programs in Latin America. Building a Reputation Gillett said the expansion into new regions is being fueled by WDI’s reputation for running outstanding programs with leading faculty and attracting good audiences. Rajeev Batra (top); A Brand Equity seminar in Prague (middle); Nancy Scannell (bottom).
“We have a good track record, which is essential,” she said. “We have proven success with programs in other countries.” The Executive Education program’s world-renowned faculty includes professors from both inside and outside the University of Michigan as well as experts in the regions where the programs are being held.
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Welcome
to the fifth issue of the Davidson Review. This semiannual newsletter is designed to keep you apprised of activities and plans at the William Davidson Institute (WDI) and to encourage you to become involved in our programs. The research initiatives we launched last year — on Social Enterprise, Globalization of Services, and doing business at the Base of the Pyramid — have all have made great strides in engaging leading academics and practitioners in their respective fields. Each of the initiatives has also pulled together extensive resource pages. These resources include the latest thinking in each area, including academic papers, reports from multilateral organizations and industry consulting firms, business and policy briefs, and dozens of the latest articles from various media outlets.
Table of Contents Globalization of Services Update Social Enterprise Update Base of the Pyramid Update Technical Assistance Update Executive Education Update Supporting Int’l Activities at UM Social Enterprise Speaker Series
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I would also like to highlight some of our accomplishments in Executive Education and Technical Assistance over the past few quarters. As you can see in this issue’s cover story, the Executive Education initiative has experienced a dramatic transformation in the past few years. Numbers of programs, revenues and participants have all grown dramatically, while the Institute’s geographic footprint has also grown significantly. Our Technical Assistance initiative also has grown tremendously. Aaron Bornstein joined WDI as director of Technical Assistance just over a year ago. Aaron and his team have been quite successful at building a reputation for excellence in two focus areas — economic growth, and capacity building in higher education, particularly business schools. WDI’s work under the MEPI program in North Africa continues to go well. Development agencies have started approaching WDI to deliver projects in our focus areas. We anticipate several exciting announcements in the Technical Assistance area in the coming months. A lot has been accomplished at the Institute. We continue building communities of interest in our focus areas and are engaging with leading thinkers around the world. If you are already engaged, thank you. If not, we invite you to join us.
Corporate Speaker Series Brown Bag Lunch Series Summer Internships 5 Q’s with Stan LePeak
You can read more about the activities of each initiative later in this newsletter. All of these resources are available on the WDI Web site at www.wdi.umich.edu/ResearchInitiatives. We invite you to visit and share your thoughts.
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I look forward to continuing our discussion as we shape a new WDI. Please contact me if you have any comments, questions or suggestions about programs at the Institute.
Sincerely,
Robert E. Kennedy Executive Director
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Workshop Frames GoS Issues to Study
Offshoring Blog Attracts Audience
A one-day workshop, “Globalization of Services: Framing the Issues,” was held Sept. 16, 2005. The workshop focused on policy and business implications of increasing global trade in services.
WDI’s group Web log — or blog — that discusses Globalization of Services(GoS) issues is averaging more than 300 visitors daily and some days attracting more than 500 visitors.
The 24 participants shared their research and experiences and identified key questions and challenges that remain unanswered.
The blog, www.wdi.umich.edu/Blog/, was started early this fall. It features a team of leading thinkers who share their perspectives on this phenomenon, commonly referred to as offshoring, and also comment on current news and trends in this field. This 10-member community of academics, business and policy practitioners, journalists, professionals and individuals interested in the phenomenon of increasing trade in services includes:
Academics from leading institutions such as the University of Michigan, University of Illinois, Carnegie Mellon University, UCLA, the Indian Institute of Management and Jawaharlal Nehru University in India discussed their research and presented important issues on this topic that need to be studied further. Executives from companies such as IBM, EquaTerra, Evalueserve and Janeeva described operational and strategic challenges faced by the industry and highlighted areas in which they need academic research. The purpose of the workshop was to create a dialogue between academia and industry that will help better define research issues to be addressed by WDI’s community of interest going forward. This core group of academics and practitioners will provide inputs for furthering WDI’s initiative in this area and help frame the Institute’s research agenda on this topic. WDI Executive Director Robert Kennedy told participants he wanted to keep the discussion going and directed them to the WDI Web site to take advantage of the resource pages on globalization of services, look for future events on the topic and to participate in the Institute’s blog on GoS. He said additional conferences will be organized in the future to follow up on this launch conference. A full write up of the workshop is available at: www.wdi.umich.edu/Events/92/
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Alok Aggarwal, founder and chairman of Evalueserve, which provides various high value-added IT-enabled services to North America and Europe.
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Rashmi Banga, associate professor at the Centre for American Studies, School of International Studies, Jawaharlal Nehru University (JNU), India.
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Vineet Katial, head of operations and co-founder of Janeeva, Inc., which supplies software and services to companies that offshore.
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Robert Kennedy, executive director of WDI, who has studied and researched the globalization of services since 2000 when he engaged with Tata Consulting Services on a series of teaching case studies.
Katial said his company, an outsourcing assurance firm, is in many ways blazing new trails and that supplies him with ideas to include on the blog. “When you create a new industry you encounter a lot of new trends and facts that a lot of people don’t know about or don’t understand, so I share those,” he said. The blog also keeps him informed, including links to the latest articles and data.
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“There’s a lot of interesting stuff happening on the blog,” Katial said. “A lot of things have value.”
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Blog participants — those who post comments and those who simply visit the site — are provided with access to important resources on the topic, such as working papers, news articles and policy and business briefs. The blog helps the Institute with its goal of becoming a center of expertise and a gathering point. Over time, WDI will explore ways to capture the collective wisdom of these discussions and points of views, and derive insights from them for the community. Cameron Art of IBM
GoS Business and Policy Briefs Series to Launch
makes a point at
The WDI Globalization of Services (GoS) research team, comprised of experienced people from the business and policy worlds as well as academics, is launching a Business and Policy paper series beginning in March 2006. The briefs will examine the phenomenon of increasing globalization of business services and identify best practices, key trends and future possibilities.
Simon Bell of AT
Business papers will examine both the demand (corporations sourcing business services from around the globe) and supply side (vendors providing these services) opportunities, challenges and risks. Policy papers will focus on the policy issues underlying global trade in business services, and analyze knowledge sector policies being used by emerging economy governments to promote their competitiveness in the global knowledge work marketplace. The series will be available online at: www.wdi.umich.edu.
GoS Resources For the latest academic papers, reports, business and policy briefs, and news articles on this topic, go to the WDI Web site then click on “research initiatives,” “globalization of services” and “resources.”
the GoS workshop while Alok Aggarawal of Evalueserve and Kearney listen.
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Latin America Alliance has Successful Launch
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The Latin America and the Caribbean NGO Alliance continues to grow. Six months after launching the alliance, there are now 13 members in six Latin American countries. Alliance members are innovative non-governmental organizations (NGO) that have adopted, or are creating strategies for adopting, commercial approaches for their organization to become more sustainable and less dependent
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by using technology as a tool to encourage active citizenship, and a foundation in Costa Rica that creates and maintains a protected marine area off the coast of the country.
The Office of Private Voluntary Cooperation of the United States Agency for International Development (USAID) will provide a grant for the project.
WDI, NESsT Partner for Case Study Project
NESsT, which stands for Nonprofit Enterprise and Self-sustainability Team, is a non-governmental organization based in Santiago dedicated to finding lasting solutions to systemic poverty and social injustice through the development of social enterprises.
WDI, along with its Chile-based partner NESsT, will supervise a student team that will study the impact and lessons learned through NESsT’s Venture Fund, which attempts to build
Social Enterprise Fellows Named Four new Social Enterprise Fellows were named to the WDI Network. Kelly Janiga, manager of the Social Enterprise initiative, said the main purpose for the fellows is to engage leading thinkers and experts in the field and work with them to disseminate their ideas.
Photographs from four LACNGO Alliance members: (from left to right) Fundacion ph15; Alimentos de Argentina; IDDI; and Fundacion Ideas.
on donors. The aim of the NGO Alliance is to promote networking opportunities and the dissemination of best practices. Alliance members contribute to WDI publications, participate in conferences and partner on technical assistance. As part of its social enterprise initiative, WDI launched the NGO Alliance, a coalition of public interest groups based in Central Europe, Eastern Europe and Eurasia. Alliance members work on issues central to creating a foundation for a successful transition from a controlled to a market-based economy. The Alliance currently has 37 members in 16 countries in the Central Europe, Eastern Europe, and Eurasia region. The Latin America and the Caribbean NGO Alliance features five members in Argentina, two each in Chile, Costa Rica and the Dominican Republic, and one each in Ecuador and Nicaragua. Members include an organization in Argentina that teaches disadvantaged teenagers photography; an NGO in Chile that fosters the inclusion of less-privileged social groups
the capacity of social enterprises in Central Europe and Latin America. The students, part of the Multidisciplinary Action Program at Michigan’s Ross School of Business, will write five case studies. The team will evaluate the Venture Fund’s efforts in enabling NGO social enterprises through technical assistance and small grants. The students also will evaluate the social enterprises of four organizations in the Venture Fund — a center in the Czech Republic providing treatment for at-risk youth and its woodworking business; a rural development organization in Slovakia that has a cluster of tourism businesses; a women’s rights organization in Chile that subsidizes the psychological treatment of low-income women with fees from paying clients; and an environmental organization in Chile that provides planning, design and management services to owners of private, protected areas. The students will travel to Slovakia, the Czech Republic and Chile for on-the-ground assessments of the fund and four of its members.
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“WDI wants to be a clearinghouse for ideas and this is a good way to do that,” she said. “We can also provide the fellows access to our NGO Alliance members and their projects as well as utilize the fellows’ knowledge and intellectual capital to pass on to our alliance members.” The fellows are: Diane Kaplan Vinokur, professor of Social Work and Director of the Nonprofit and Public Management Center at the University of Michigan; Roberto Gutierrez, director of the Social Enterprise Initiative in the School of Administration at the Universidad de los Andes and co-chair of the Social Enterprise Knowledge Network; John Chamberlin, professor of Public Policy at the University of Michigan; and Robert Grove, co-executive producer of the PBS documentary “The New Heroes.”
SE Resources For the latest academic papers, reports, business and policy briefs, and news articles on this topic, go to the WDI Web site then click on “research initiatives,” “social enterprise” and “resources.”
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WDI Plans BoP Conference WDI will gather a select group of leading scholars from the Base of the Pyramid (BoP) field for a research conference in May in Ann Arbor. The Institute is planning a larger conference open to the public for later in 2006. The broad purpose of the conference is to bring together a multi-disciplinary community of leading BoP scholars to explore what is truly unique and different about a “BoP perspective.” That is, are business strategies at the base of the pyramid a fundamentally new and unexplored domain? Or are the findings in this field simply a new domain in which to apply tools from other fields? Over the past several years, using market-based approaches to serve the approximately four billion people at the base of the pyramid (BoP) has increasingly been touted as an untapped opportunity for company growth. It also can be an additional strategy for non-profits to enhance their effectiveness and a novel approach for aid agencies and governments to more efficiently achieve their development goals. With these goals in mind, an increasing number of initiatives have been launched that anticipate generating revenues and profits while working in collaboration with those at the base of the economic pyramid — defined as those with an annual purchasing power parity of less that $1,500. The primary objective of the conference is to stimulate cutting-edge research targeting both the academic and practitioner communities. The conference — “Research at the Base of the Pyramid: Developing a New Perspective” — is meant to be the first of an annual research conference. It will be on May 18-20 and is by invitation only. Outcomes of the conference may include: ■
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Jointly constructing what the BoP field might be and creating a conceptual map of potential priority areas for future research. Identifying interesting and important BoP-oriented research questions that can make a theoretical contribution to business, sociology, anthropology, international development and other fields of inquiry.
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Surfacing the most relevant challenges impacting the success of companies, non-profit organizations, aid agencies, and governments trying to serve BoP markets.
London also arranged “brown bag” lunch seminars with Moore and Donohue to meet with students. For more on those seminars, see article on Page 13.
Encouraging future collaborative research by gathering a scholarly community in one location.
London in London
Exploring different outlets for this research, including edited books and special issues of leading journals. Different publication opportunities would be identified that target both the academic or practitioner communities.
The longer term objective of this and subsequent conferences is to support the generation of new knowledge uniquely related to research on the BoP and to create additional opportunities to have this research shared across a broad audience of academics and practitioners.
Leading BoP Thinkers On Tape Ted London, director of WDI’s Base of the Pyramid research initiative, conducted four videotaped interviews with some leading BoP thinkers this past fall. The videos are available for viewing on the WDI Web site. The 20- to 30-minute videos touch on different aspects of doing business at the base of the pyramid. London and Marcos Neto of CARE USA discussed the organization’s consideration of using revenue-generating enterprises (RGE) as a poverty-fighting tool. Another interview subject was Patrick Donohue, the founder of a startup venture in Brazil and Kenya (www.brinq.com) and a member of the Base of the Pyramid Protocol. London also spoke with Jordan Kassalow of the Scojo Foundation (www.scojofoundation.org) which works to develop markets for reading glasses at the base of the economic pyramid. Jesse Moore of CARE Canada talked to London about CARE Enterprise Partners (CEP), which aims to build upon both the existing unregistered assets of the poor and the untapped commercial opportunities at the base of the pyramid to create innovative enterprises that help micro-entrepreneurs.
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Ted London was a keynote speaker at the annual retreat for the Department for International Development’s (DFID) enterprise development and private sector advisers. Similar to the U.S. Agency for International Development, DFID is the British government agency that focuses on development and poverty alleviation. London spoke on the growing phenomenon of doing business at the base of the pyramid, with a particular emphasis on the role of the private sector in poverty alleviation. According to DFID’s Richard Boulter, the session was very highly rated by the attendees at the retreat and catalyzed an important discussion around how DFID could further pursue these ideas. Most of those at the conference, held December 14-16 near London, England, work overseas alongside other international donors and national and local governments.
London Teaches MBA Class on BoP Ted London taught an MBA class on this exciting business phenomenon this past fall at Michigan’s Ross School of Business. London’s twice-weekly, 90-minute class integrated concepts of strategy, international business and sustainable enterprise to stimulate the leadership skills and competitive imagination needed to design strategies for the base of the pyramid.
BoP Resources For the latest academic papers, reports, business and policy briefs, and news articles on this topic, go to the WDI Web site then click on “Research Initiatives,” “Base of the Pyramid” and “Resources.”
Ted London with Richard Boulter and Professor Bill Duggan, Columbia Business School. The event was the DFID Enterprise Development annual retreat held at Dorking, England on 14-16 December 2005.
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Waissi Reflects on His Three Months at IBS
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Dr. Gary Waissi, Professor of Management Science and former Dean of the UM-Dearborn School of Management, spent three months teaching at the International Business School (IBS) in Tashkent, Uzbekistan, this fall on behalf of WDI. Dr. Waissi taught two courses at IBS, participated in an executive education General Management Program and gave two faculty workshops. He also made recommendations on Dr. Gary Waissi
how to improve the school’s current administrative management practices. He talked about his time at IBS.
working at IBS? What are its strengths and weaknesses?
Waissi: Most unexpected for me was that
Waissi: I really enjoyed working at IBS. As
I would consider the students to be IBS’s most significant strength. Also, the IBS library is among the best, if not the best, English-language business library in Uzbekistan, and possibly Central Asia. Another significant strength is that all classes at IBS are taught in English. As the most significant weaknesses, I would consider the facilities, physical infrastructure and IT technology (computers, network and Internet access). There are not enough classrooms. The existing classrooms are small, not suited for contemporary teaching, no multimedia classrooms, no Internet access, and the classroom furniture would need to be upgraded. WDI: How would you compare an IBS student to a typical UM business undergrad?
With respect to the IBS and its future, I believe that the school is among the most important democracy projects in Central Asia. I hope that the USAID and other entities of the U.S. government, as well as the European Union, continue to focus on spreading democracy via education, and via projects like the IBS. The potential payoff here is tremendous, because these young people, and their generation, will be future leaders of Uzbekistan. WDI: What have been the most surprising lessons/experiences you’ve had while in Central Asia?
WDI: What have been your overall impressions
you know the school is small, fewer than 100 students. Therefore, I had a chance to interact and work very closely with all administrators, most faculty and most students. IBS, as a young school (founded in 1995), is very entrepreneurial, and continues to evolve.
experience during the almost three months. Several Western businesses, both American and European, have either been forced to close operations, or have chosen to move out of the country. Many of those, who have wanted a continued Central Asian presence, have moved to the more prosperous and business-friendly neighboring Kazakhstan.
Waissi with some IBS students.
Uzbekistan, and also Kyrgyzstan, were very safe, and peaceful, nothing like you would see on TV and news media. People were extraordinarily friendly. In the capital cities, Tashkent and Bishkek, the fashion of both women and men was mostly Western.
Waissi: IBS students are academically
very strong. All my 44 students spoke three or more languages. Among those languages were Uzbek, Russian, Tajik and English. In addition, many students studied Turkish, German, Japanese and French. Comparatively, the IBS students performed at an equal level to an undergraduate business student in the United States. WDI: What are your impressions of Uzbekistan and its prospects? Waissi: The people of Uzbekistan are great,
honest, and hard working, and survive in very difficult economic circumstances. However, within the government organizations corruption is widely spread and affects all aspects of life. This statement is based on several discussions with expatriate business people, Uzbeks and Uzbek-Russians, and my own
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WDI to Return to Morocco WDI was recently awarded funding from the Middle East Partnership Initiative (MEPI) of the U.S. Department of State to continue efforts to assist Moroccan SMEs and to help them benefit from the Free Trade Agreement with the U.S. The program for 2006 will resemble last year’s effort. It will include a small business training component delivered by WDI’s Executive Education program and a series of MBA student-consulting projects. The first training seminar will be in Arabic and target women working in handicraft co-ops. The training will help the women increase the quality of their goods and market them better.
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Participants in the 10-day GMP at IBS pose with Waissi and Mohamed Bayou.
The second seminar will be in French and will be for entrepreneurs from small towns. Those participating will include business men and women from service sectors, manufacturing, and agribusiness, among others. This year’s program will offer an additional session in the small business training component — totaling three one-week training sessions designed to help small businesses grow and create jobs. Under the student consulting component, there will be four MBA student projects. One will be offered under the Multidisciplinary Action Program (MAP) this spring and the remaining three will take place the following summer as 14-week internships. The student teams will focus on assisting SMEs primarily in the telecommunications, agribusiness, and electronics industries.
IBS Library Upgraded Thanks to WDI, UM The library at the International Business School (IBS) in Tashkent, Uzbekistan has added several books to its shelves thanks to WDI and the Unversity of Michigan. During the university’s annual Green Clean Day in summer, unused items are collected to either be reused by someone else or recycled. WDI staffers, armed with a “wish list” from IBS for books on certain topics, collected several textbooks from the university’s Ross School of Business. Five boxes were shipped to IBS. WDI is working with IBS, the country’s only private post-secondary institution, to gain accreditation for its bachelor’s degree program in business administration and to ensure its viability by strengthening academic programs, investing in faculty, establishing private-sector partnerships and streamlining its administrative structure.
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Michigan Professors Teach in Uzbekistan In November, WDI sent three University of Michigan-Dearborn faculty to the International Business School in Tashkent, Uzbekistan, to teach a 10-day General Management Program. WDI works with the school to support U.S.style business education in central Asia. The GMP included two-day sessions on each of the following topics: Business Strategy, Organizational Behavior, Marketing, Managerial Accounting, and Finance. The UM faculty conducted four of the five sessions. A local entrepreneur taught the Finance module. Participants included Uzbek business people from small and medium-sized enterprises, multinational corporations and faculty from IBS. Faculty instructors were: Gary Waissi, who taught Business Strategy; Julie Dziekan, who taught Organizational Behavior; Mohamed Bayou, who taught Managerial Accounting; and Chris Samfilippo, who taught Marketing. “The experience was fascinating,” Dziekan said. “I was not quite sure what to expect culturally, given the country is a former Soviet Republic, primarily Muslim, and the ‘gateway to Asia.’ I was not sure how these seemingly distinct influences would play out.” She said she was impressed with the students in the program. They were extremely articulate, business savvy, and very much engaged in the learning process. “They appeared very optimistic about their futures and that of their country,” she said. “They seemed very committed to the successes of their organizations. In fact, the students were more similar than different from our own MBA students.” Dziekan said the IBS leadership and faculty were passionate about their vision to provide high quality business education to young people and to educate the next generation of managers.
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Mohamed Bayou was one of the UM faculty who taught a General Management Program at IBS in Uzbekistan.
A lack of support from the government does make things difficult, she said. “Resources are extremely limited,” Dziekan said. “Students do not even have textbooks. But again, students are very optimistic about their futures. The undergraduates too were very engaging, and seemed quite creative.” Bayou said his trip to Tashkent was a “wonderful experience.” He said he was surprised that the program participants and IBS students spoke such good English. He liked their eagerness to learn U.S.-style business concepts. “They wanted to be challenged,” Bayou said. “To them, an effective seminar conductor is the one that designs his or her presentations into an interactive communication mode; not the traditional one-way teaching from the instructor to students.” Compared to his students at UM, Bayou said those in Tashkent were more enthusiastic to learn, had more confidence in what they want and more confidence of what they know. “Consequently, they were more critical of what is presented to them,” he said. “This is a quality I highly value. In the U.S., I give a high score for class participation. In the IBS education system in general, I would not need to resort to this incentive to encourage students to participate.”
Participants at a GMP in Bratislava.
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For example, two of the top thinkers in HR — Wayne Brockbank and Dave Ulrich — will teach Executive Education programs this year. Brockbank will deliver a program in Hungary and Ulrich one in Chile. (For more on Ulrich, see page 9). “Once overseas partners work with you they realize you’ll deliver top-notch faculty and they want more programs,” Gillett said. New Partners The Executive Education program also is collaborating with new partners. Under the WDI model, the Institute is responsible for the program’s content and for recruiting faculty. The local partner focuses on market assessment, promoting the programs and handling all logistical issues — such as registration, venue, transportation and meals. Working with Seminarium has helped WDI gain new markets in Latin America. WDI and Seminarium originally teamed up for a Human Resources program because of UM’s expertise in that field. After the success of the HR programs in Latin America, Gillett asked Seminarium to consider a Brand Management Program. “They liked the idea. It’s a relatively new concept for Latin America, something new and innovative,” Gillett said. WDI will partner with Seminarium for a brand program in Guatemala this year Another new partner for the Executive Education program is the U.S. Department of State. As part of the U.S. Department of State’s Middle East Partnership Initiative (MEPI), Executive Education partnered with Al Akhawayn University in Ifrane, Morocco, to strengthen skills among entrepreneurs and business people working for small and medium-sized enterprises. Two five-day sessions were delivered to 60 participants. The programs were so successful that the State Department approved three more Executive Education programs for
Management Program in Slovenia; and the Leadership Program in Turkey.
2006. The first seminar will be in Arabic and will target women affiliated with handicraft co-operatives. The training will help the women improve the quality of their products and market them more effectively. The seminar will also cover techniques for planning and budgeting money for future projects and products. The second seminar will be in French and will benefit entrepreneurs from small towns. Participants will include business men and women from service sectors, manufacturing, agribusiness and others. Gillett hopes that WDI’s track record in Morocco will lead to more programs in the Middle East. The Institute is in discussions with the State Department about delivering programs in other regions. “Our success in Morocco opens up more doors for us across the Middle East,” she said. Collaboration Within WDI The Morocco programs also allowed Executive Education to link with WDI’s Technical Assistance program, which won the State Department contract. Technical Assistance has proposed several new programs that include Executive Education components. Executive Education also linked up with WDI’s Social Enterprise initiative in 2005. On the heels of the Social Enterprise conference “Rethinking the Way NGOs Do Business” in Bratislava, Slovakia, Executive Education delivered a 10-day Strategic Management Program. Eleven NGO managers were able to attend the program thanks to the Institute’s Robert Teeter Scholarship program, named after a longtime WDI board member who passed away in 2004. WDI’s partner for both the conference and the Strategic Management Program (SMP) was Pontis, an organization dedicated to strengthening NGOs operating in Slovakia and central Europe. WDI awarded scholarships to managers of nonprofits and
Gillett said she will be looking for entrepreneurs who have started a business with 2-10 employees but may not have the money to attend. “This information is critical to the success of their business so we have impact on their organization,” she said. NGOs in Central and Eastern Europe and Eurasia to attend the conference and/or the SMP. This summer, Executive Education plans to deliver a three-day NGO management program in Chile following a Social Enterprise conference that will launch WDI’s Latin American and Caribbean NGO Alliance. WDI, together with the Nonprofit Enterprise and Self-sustainability Team (NESsT), will host an introductory conference on social enterprise for nonprofit leaders in Latin America and the Caribbean. The conference, to be held June 8-10 in Santiago, will discuss the legal, social and practical issues facing nonprofits seeking to adopt a commercial approach for their organization to become more sustainable and less dependent on donors. The management program is one of four programs in 2006 to which WDI will award scholarships. Managers from non-governmental organizations and small and medium-sized enterprises who would not be able to attend the programs otherwise due to financial difficulty will be eligible to receive these awards. The Institute will give $100,000 in Teeter scholarships to 40 program participants this year. In addition to the 10 participants who will be given scholarships for the Chile program, 10 additional scholarships will be given to participants in three additional programs (30 in all): the General Management Program in Croatia; the Brand
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Workers at NGOs often have little or no training in business “so a 10-day training program to learn business skills they never had exposure to will have a big impact,” she said. Continued Growth Overall, the Executive Education program looks vastly different from when Gillett arrived in 2002. Back then, WDI worked solely in Eastern Europe, running a finance program in the Czech Republic and a General Management Program in Croatia. In all, it amounted to about five programs annually plus two Human Resources Network (HRN) workshops, the leading professional forum for HR executives active in Central and Eastern Europe. As members of the HRN, HR directors and vice presidents meet several times a year in European capitals to learn from top HR professors and to share ideas and best practices. Right away, Gillett looked to expand both the content and the geography of the Executive Education program. Most importantly, she looked to deliver successful programs in a few places to begin with and gradually build on that success elsewhere. Gillett said she will continue to sell programs to new regions. “We’d like to continue building on our strengths in Europe, Latin America and the Middle East,” she said. “Our goal is to share our knowledge and management expertise with managers in emerging market countries all over the globe.”
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HR Guru Ulrich to Speak at WDI Event Dave Ulrich, one of the
world’s top Human Resource
Management educators and consultants, will lead a one-day seminar for WDI in Chile. The Human Capital Congress will take place June 20 in Santiago. WDI’s Latin American partner, Seminarium, expects more than 400 people to attend. The majority of the attendees will be from the human resources departments of large and small companies throughout Latin America. Many will be there to see and hear Ulrich, a Professor of Business Administration at the University of Michigan and co-author of “The HR Value Proposition” with UM colleague Wayne Brockbank. In 2001, BusinessWeek magazine named him the nation’s top management gurus. Ulrich’s teaching and research addresses the question of how to create an organization that adds value to employees, customers, and investors. He studies how organizations change fast, build capabilities, learn, remove boundaries, and leverage human resource activities. He has consulted and done research with over half of the Fortune 200. Ulrich is on the faculty of the university’s Michigan
Executive Program, Co-Director of Michigan’s Human Resource Executive Program, and Advanced Human Resource Executive Program. He has helped generate multiple award-winning national databases on organizations that assess alignment between strategies, human resource practices and HR competencies. Ulrich answered a few questions from WDI about his work in HR. WDI: What interested you about this event in Chile? Ulrich: I have a passion for learning and when
I have the opportunity to see how leaders in other parts of the world conceptualize and practice leadership and HR, I learn. I don’t know Chile well, but it will be a privilege to learn with those who attend the seminar and to adapt some general principles to those conditions. WDI: Do you speak often outside the U.S.? If so, do you see much difference between the two audiences in questions they ask and where they are in terms of HR knowledge? Ulrich: I do about 30-35% of my work outside
the U.S., in Europe and Asia primarily. Some general principles apply worldwide, but the practices that come from those principles are adapted to local conditions. Leaders of any firm have to be able to help their organization compete to stay in business. But the local requirements may focus on some practices more than others. WDI: What are some misconceptions about HR? Ulrich: There are a few.
HR is not done by HR, but by line managers. Dave Ulrich
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update
HR is not just about administrative details, but about changing the underlying culture of the company.
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HR does not just empower and engage employees, but can be used to create value for customers and investors outside the firm. HR is not just about people and talent, but about process and teamwork, as HR builds individual abilities and organization capabilities. HR should not be judged by the past and what has been done but by the future and what HR can and should be helping leaders do. WDI: If HR managers were going to make
one change, what should it be? Ulrich: Learn how to contribute strategically
to the business. Our research (led by Professor Wayne Brockbank) shows that when HR professionals contribute strategically to the business (by knowing culture, managing fast change and working with customers), these businesses are more successful.
New Program Manager Named Kelly Dunham has joined WDI as the Program Manager for Executive Education and coordinator of the WDI Global Impact Internship Program. Before joining the Institute, Dunham was a project manager at the Center for Health Policy and Center for Primary Care and Outcomes Research at Stanford University, where she managed two projects — the Stanford Patient Safety Consortium and the Technology Change in Health Care (TECH) global network. Her research interests include methods for establishing and strengthening public-private partnerships that will create greater equity in global health and education, sustainability strategies for NGOs in developing countries and program evaluation. She holds a Master of Public Policy degree from the Gerald R. Ford School of Public Policy at the University of Michigan.
Kelly Dunham
speaker series
S O C I A L
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The monthly speaker series features leading academics and practitioners in the social enterprise 10
field. Talks discuss the expanding role of NGOs and corporations in achieving social impact and S U P P O R T I N G
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allows SE thought leaders to interact with the growing number of University of Michigan students who are interested in this field.
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WDI’s inaugural Social Enterprise Speaker Series debuted with three speakers — a television producer who documented the work of social entrepreneurs around the world, a professor who studies management and economics
on other social entrepreneurs. He said he is looking forward to meeting some new “heroes.” “These folks are the better angels of our nature,” he said. “What makes them so compelling is their humanity. When I’m around them I feel like I’m in the presence of greatness.”
of nonprofits, and an optometrist whose foundation
Jordan Kassalow
supplies reading glasses to the poor.
Known as “social entrepreneurs,” the 14 people develop innovations that bring life-changing tools and resources to people desperate for viable solutions.
As an optometry student in 1983, Jordan Kassalow went with other students to work at a temporary eye care clinic in a poor Mexican town. He remembers meeting a woman who could no longer read her Bible because of her poor eyesight. Kassalow handed her a pair of off-the-rack reading glasses and the woman was overjoyed to be able to read again.
Grove talked about one subject in the PBS documentary who rescues children out of slavery who was nearly beaten to death.
“It was incredibly moving,” Kassalow told UM students Dec. 7. “I was learning how I could impact lives.”
“You have to be tough,” Grove said. “A big thing about social entrepreneurs is that they’re pragmatic. Not everyone can be a social entrepreneur. It’s a tough, tough existence.”
More than 22 years later, Kassalow is now impacting lives in India, Guatemala and El Salvador through his Scojo Foundation and is looking to branch out to more countries around the world. He spoke about his foundation’s work as the third guest of WDI’s Social Enterprise Speaker Series.
world who are successfully alleviating poverty and illness, battling unemployment and violence, and bringing education, light, opportunity and freedom to poor people around the globe. Robert Grove
Robert Grove The series’ first speaker was Robert Grove, who spent many years covering the entrepreneurs of Silicon Valley as a television reporter and producer. “They had vision, they were relentless, they were tough,” Grove said of the Silicon Valley entrepreneurs. When he had the opportunity to recently chronicle the work of social entrepreneurs as co-producer of the PBS series “The New Heroes,” Grove told UM students Oct. 12 that he encountered many of the same traits.
Three tools that are critical for a social entrepreneur are education, appropriate technology and access to capital, Grove said. A social entrepreneur also must have clarity of vision. Sustainability of a project also is crucial.
“I was stunned to see the people I was talking to had the same qualities,” he said.
Grove said he isn’t sure you can teach someone how to be a social entrepreneur. “You can teach the skills,” he said, “but for the rest, I’m not sure.”
But he said the Silicon Valley entrepreneur is very bottom-line driven while social entrepreneurs are “far more entertaining and interesting.”
He thinks there is a place for universities to be a conduit between social entrepreneurs and where they need to go.
Kassalow also met with WDI and UM staff to talk about possible collaborations and spoke to an MBA class on doing business at the base of the pyramid taught by Ted London, WDI’s director of the BoP initiative. Some of the questions discussed in the class included how to roll out the foundation’s work in other countries and when it makes sense to move the manufacturing of the eyeglasses from China to India.
The four-hour series, which aired in June and July, told the stories of 14 people from around the
Grove said there are plans for a second and third season of “The New Heroes” with new features
There are more than one billion poor people who need reading glasses but only five percent
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Jordon Kassalow
reading glasses, funds the foundation along with donations. Before starting the foundation, Kassalow spent time studying other organizations. He spent time in India at Aravind Eye Hospitals, a longtime destination of student MBA teams from UM supported by WDI. have access to affordable options, Kassalow said. Scojo works to develop markets for reading glasses at the base of the economic pyramid. It also selects, trains, equips and funds local entrepreneurs to establish new businesses that sell reading glasses. Part of the foundation’s mission also is to provide high-quality, affordable reading glasses for its programs and to bring reading glasses and referral services directly to the customer at the village level. Kassalow said creating entrepreneurs impacts peoples’ lives. “Once people have access to money, virtuous things happen,” he said. “They may fund their children’s education or improve their home. We spark self-esteem and an entrepreneurial spirit in people, something that is greatly lacking in this world.” He told the story of two women in Guatemala who opened an optical store in their village. Though they had no business background, the women broke even the first month and have been profitable the past six months. The foundation also returns the ability to earn a living to people by providing reading glasses to those who are no longer able to work because of their poor eyesight. Kassalow mentioned a man in India who was a jewelry maker who had to stop working because he couldn’t see well enough to place gems into his designs. The foundation was able to help the man with glasses and he was able to start working again. Kassalow and his partner formed the foundation six years ago along with their optical store in New York City. Five percent of the proceeds from the store, Scojo Vision, which sells high-end
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He said he learned about pricing from Aravind, charging customers whatever they could afford. He also learned distribution lessons while working at a nonprofit in Afica. Scojo’s business model is market-based, sustainable, scaleable and replicable. Scojo’s entrepreneurs are given everything they need in one box — reading chart, educational material, T-shirt and signs, among other things.
Young, who focuses on the management and economics of nonprofit organizations, said it is important to have a clear understanding of what social enterprise is for a number of reasons. Among them is to be more precise “in what we’re talking about” and to put into perspective “where social enterprise is going to help address social goals.”
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Using a number of disciplinary lenses — such as history, economy, management theory or organizational theory — is one way to better understand social enterprise. “Social enterprise takes many turns and serves a variety of purposes,” Young said. “Lenses help us to grasp a fuller understanding of social enterprise.”
And part of the foundation’s “underlying magic” is its product and service. “People put the eyeglasses on for the first time and their eyebrows go up to the top of their head,” he said. “They just go, ‘Wow.’”
Dennis Young Social Enterprise. “Two little words, so many interpretations,” said Dennis R. Young, president and founding CEO of the National Center on Nonprofit Enterprise, and second featured guest for WDI’s Social Enterprise Speaker Series on Nov. 30. Young, the Bernard B. and Eugenia A. Ramsey Professor of Private Enterprise in the Andrew Young School of Policy Studies at Georgia State University, tried to offer a few interpretations of social enterprise as well as talk about why it is important to come up with a common interpretation. Young, director of Georgia State’s nonprofit studies program, said if pinned down he would describe social enterprise as “activities intended to address social goals through the operation of private organizations in the marketplace.”
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Dennis Young
speaker series
C O R P O R A T E
WDI’s Corporate Speaker Series features leading thinkers 12
who work in emerging markets. The goal of the series is to spur S U P P O R T I N G
discussion around globalization. The talks are geared for
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MBA students at the Stephen M. Ross School of Business at
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M I C H I G A N
from the speakers on issues they’ve discussed in class. BBA students as well as faculty and others from around the university also are invited to attend.
trader behind the U.S. and Germany. Joining the WTO “has increased the pace in which China has integrated into the world economy.” One of the difficulties that has come with being a WTO member is the growing number of trade conflicts. “Some of them make headlines like textiles, exchange rate and intellectual property rights,” Huang said. He said China is implementing legislation to tackle some of these problems but that it “takes time.” “China is a land of great contrasts,” he said. “Some is developed, in many other areas people live in very difficult conditions.” Therefore it is difficult to pass and enforce legislation across the vast land. Still, Huang said China is committed to reform. “As a WTO member, we have made a commitment so we have to do it,” he said. “The debate in China is the best way to do it. We don’t have a lot of experts so we have to learn from others.” Other problems China faces is a growing population, the task of building a legal system and sustaining a 9-10 percent annual growth rate.
Huang Rengang
“The Chinese economy is now vulnerable to the outside world economy,” Huang said. As for the debate over piracy, Huang said China has made strides on safeguarding IPR but “there’s great room for improvement.”
Huang Rengang China’s membership in the World Trade Organization has not been easy, but it has been worthwhile, a WTO representative from that country said in a speech Oct. 20. Huang Rengang, counsellor for the Permanent Mission of the People’s Republic of China to the WTO, said there have been benefits, opportunities and challenges since the country joined the trade organization in 2001. He spoke in Wyly Hall as part of WDI’s Corporate Speaker Series. One of the benefits has been that reforms in
China, one requirement for the country’s admission into the trade organization, have been sped up. “We had to reform our legislation, our policies, our practices to bring them into conformity with WTO rules,” Huang said. “This increased the confidence the whole world had in doing business with China.” Huang said China’s trade and foreign investments have grown steadily since joining the WTO and China is now the world’s third-largest
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Huang also talked about China’s trade in services, which he said is much smaller than its trade in goods “but growing.” China is ninth in the world in trade in services, third in trade in goods. Overall, Huang said being a WTO member has been mostly good for China. “It is a positive thing for China to become a WTO member,” he said.
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Elitsa Anguelova and Diviya Sharma, who spent the summer in Morocco as part of the MEPI student project,
Students Learn About BoP Over Lunch WDI hosted two “brown bag” lunch seminars this fall for students who are interested in doing work concerning the Base of the Pyramid (BoP). More lunches are planned for the winter term. The lunches, organized by Ted London, WDI’s Director of the Base of the Pyramid research initiative, are designed to allow students the opportunity to talk with people who are doing business in this area. The lunches drew students from not only the Ross School of Business, but also the Ford School of Public Policy, the College of Literature, Science, and the Arts, and the School of Natural Resources and Environment. Patrick Donohue was the guest speaker at the first lunch on Nov. 29. Donohue’s startup — BRINQ (www.brinq.com) — attempts to collect the innovations of the world’s poor, create an effective entry mechanism for companies, and reward the tremendous diversity and ingenuity of those living at the edge of poverty. BRINQ — short for the Portuguese word for toy — specifically seeks to enable affordable local invention of toys in the developing world. Donohue told students about BRINQ as well as what it was like to participate in the Base of the Pyramid Protocol, a process that guides businesses in building partnerships with low-income communities — the more than four billion people living at the base of the world’s socio-economic pyramid. The 20-or-so students quizzed Donohue about his work, how he got started and what he sees as important steps to take in order to work at the Base of the Pyramid. On Dec. 6, Jesse Moore of CARE Canada was the guest speaker at another “brown bag” lunch seminar. Moore, director of private sector development at the global poverty-fighting organization, gave career advice to the students and also talked about using revenue-generating enterprises to fund the fight against poverty. Eric Eide, a sociology major and student of London’s, said he attended the lunches to find
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go for a camel ride.
out what challenges practitioners are having in the BoP space. “The lunches were a good venue to hear about this as well as what the future strategies are on the ground,” Eide said. He said he is interested in development and was “looking for evidence of new thinking around development at a more grassroots level. “The speakers had knowledge of things that they or their respective organizations were doing in this regard,” Eide said. Jason Navarette heard about the lunches through an email from the Emerging Markets Club at the Ross School. “I am very interested in the subject and this caused me to attend,” said Navarette, an MBA student. “I hoped to hear about real experiences on the ground and what opportunities there are for careers in the field.” MBA student Karen Putterman said she was interested in finding out “how and where businesses go — what the new ideas are.” “I have always been interested in BoP issues,” she said. “I find that now I don’t have much time to think about them so lunch was a good way to focus on it for a bit.”
Internship Alert Last year, nine University of Michigan students spread out around the world as part of WDI’s Global Impact Internship program. The students’ internships took them to places such as Indonesia, India, North Korea, Colombia and Cambodia. Their projects included: conducting project valuations on a number of new medical technologies and service initiatives; working with a local office for the UN-World Food Programme to evaluate recent food-for-work projects
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and assist with building NGO partnerships to enhance program sustainability; providing business strategy development assistance for a recycled plastics manufacturing facility; and conducting a research project on the impact of Information and Communication Technologies (ICT), including telecenters and information kiosk initiatives. WDI is now accepting applications to fund 2006 summer internships for University of Michigan graduate students. The Institute’s 2006 Global Impact Internship Program supports partnerships between students and non-profits, businesses and other organizations in emerging market economies. The internships will serve as a platform for future research and policy action. WDI will award up to $5,000 for international internships. This year, WDI will offer two types of Global Impact Internships: self-generated and WDI initiative-driven. Self-generated Global Impact Internships will be with organizations identified by the applicants that are doing innovative work in emerging market economies, such as development-oriented NGOs. Applicants are responsible for contacting the organization, co-defining the opportunity and obtaining a written commitment from the sponsor before submitting a proposal to WDI. Proposals focusing on international social enterprise, base of the pyramid or globalization of services are encouraged. The application deadline is February 10. WDI Initiative-driven Global Impact Internships will be with organizations identified by the Institute. These internships will fall under one of WDI’s three core research initiatives: social enterprise, base of the pyramid and globalization of services. WDI will post these internships on a case-by-case basis. WDI Global Impact Interns will participate in a one-day orientation before the internship and a debrief session in September 2006 with other WDI Global Impact Interns.
Diviya Sharma on a dune in Morocco.
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My Summer in Morocco Last summer, Ross School MBA students Vimal Natarajan and Elitsa Anguelova spent 11 weeks
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in Morocco as part of WDI's contract with the U.S. Department of State. Vimal, now an MBA 2 student and research assistant at WDI, recounts what it was like working on the project.
Background
Vimal in Morocco.
Of the several objectives of the office of the Middle East partnership initiative (MEPI), one was to strengthen skills among entrepreneurs and business people working for small and medium-sized enterprises (SMEs) in Morocco. The program was designed to help Morocco benefit from the Free Trade Agreement with the United States. To support this objective, MEPI partnered with WDI and sent a two-member team to offer no-cost business assistance to SMEs representing a variety of industries as part of a larger project. The team spent 11 weeks identifying industries, companies and projects that will add value not only to the companies they worked with but also to the Moroccan economy. They engaged with SMEs in the Casablanca region and provided tangible assistance to access the U.S. market, particularly within the framework of U.S.-Morocco Free Trade Agreement.
The work The project was kicked off by a meeting with the U.S. Ambassador to Morocco Thomas Riley and members of his economic council. The ambassador clearly put forth what he was looking for. “We do not need an 80-page analytical report. Rather, we like to see some tangible work that when left behind, can be used by companies to drive results.” With this guidance, we set out laying the road map and talking to different stake holders to identify appropriate beneficiaries. In the process
we collaborated with the American Chamber of Commerce (AMCHAM), International Executive Services Corp (IESC), SME Promotion agency (ANPME), and several local business leaders. After spending two weeks on the ground, we identified four industries as the most engaging — Agribusiness, technology, industrial goods and textiles. We then short listed seven companies — experts and forerunners in their fields: Confetex Albo (costume designer and manufacturer); Schardt saddle (manufacturer of high quality horse saddles and accessories); Global Alliance (exporter of Moroccan tiles); Orzone (animation studio — one of its kind in the continent); Somatam (Tannery); Le Soulier Elegant (manufactures safety shoes); and Argan Oil Company (extracts and exports argan oil and derivative products). The deliverables that we worked on included best practices, process studies, market entry strategies, growth strategies, financial plans, business plans, training sessions on marketing and basics of management.
The lessons learned The whole experience was a great eye opener for us, giving us insight on the business environment in a developing country. Some of our observations included the strong network between the SMEs and the government agencies. These organizations have strong insights about the SMEs they are dealing with. The Moroccan companies were proactively taking measures to enter the U.S. market and understood very well the dynamics of the system. The entrepreneurs that we came across were highly motivated and socially responsible individuals and sometimes their commitment was astounding.
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On the flip side, there are several aspects that could be improved. The most important of them is the decision-making process. In most of the companies that we worked with, decisions were made by a central system or an individual. Decentralization of this process is very important for further growth in a timely fashion. Some of our other recommendations to the business included increasing Web presence, improving promptness in communication, increasing/developing business-level proficiency in English and orienting towards international certifications. On the infrastructure front our recommendations were to develop support structures for entrepreneurs, provide businesses with more information on the U.S. market, more face-to-face interactions with U.S. businesses and, most importantly, provide practical help and guidance.
The experience The project rightfully deserves the phrase “once-in-a-life-time opportunity.” Not only did it expose us to a completely different business and economic environment, but it also provided us with unparalleled networking opportunities across both the business and government entities. More importantly, it proved to be a great learning ground and a good practical reinforcement of the course work done at school. We are very thankful to WDI for providing us with such an opportunity and would strongly recommend students to take full advantage of this great resource to accomplish their business goals and in the process, help draw attention to a great country and an amazing continent.
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Questions with Stan LePeak
WDI: What do you see as
WDI: Should a small firm or
the key factors in the growth
startup consider leveraging global
of globalization of services?
resources?
LePeak: I think it’s a phenomenon that
LePeak: I think the opportunities are even
is very inevitable. If you look at virtually all industries, they have been, or are currently, going through a globalization process. The hard goods industry was the first to globalize. Now it’s a function of services globalizing, particularly the back office services. IT was the first, now it’s HR, finance and accounting. It’s really a function of the groundwork that has been laid in terms of the global infrastructure, commonly known as the Internet, plus the rise of qualified service providers in lower-cost environments. There’s a lot of focus on this as a phenomenon of chasing a lower-cost deliverable. It is that. But it isn’t just about chasing cost reduction. It’s also a recognition that services, being often very intangible, very non-physical, are something that can be delivered from virtually anywhere. We’re seeing that finally happen.
greater for a startup or small firm because they don’t suffer from the legacy factor. They don’t have a large IT group, a large finance and accounting function. They don’t have the sunk costs in the facilities, the people, the systems that you have to then figure out how to get rid of or transition. So if you are a startup company you have to ask very seriously, Why should I do this activity? Is it going to be strategic? Do I have the core competencies to do it? Can I do it cost-effectively? If the answer is no, look to a third party. So I think if you’re a startup today, the question is: Why would you do your own payroll? Why would you do the bulk of your own human resources activities? Why would you have your own developers except to do very strategic work? So for a startup today, the opportunities are even greater. That’s where you see some very small, interesting firms that are really just focused on a few key activities and are leveraging third parties across the globe to perform the balance of what historically would have been part of their business model.
WDI: What benefits can companies realize by leveraging global resources? LePeak: Certainly labor arbitrage is
important. If you look at some of the early movements in taking IT work to India, there was some potential for very significant cost savings of 50, 60 or 70 percent. That was only if it was done well and done correctly. There was an opportunity to lose money and create problems, so I think it’s important to recognize benefits of labor arbitrage. But often those benefits are fleeting. So what we’re seeing more and more today is organizations looking at how they can improve the quality of the services that they’re delivering to their customers, to their internal staff, via the utilization of globalization of services. So cost saving is important, particularly in a down economy. But as the economy improves and margins go up, we still see firms looking at globalizing services as much, if not more, to improve the quality of services delivered by tapping into global talent pools.
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WDI: Why have some companies’ outsourcing initiatives failed? LePeak: One main reason is organizations
don’t define the value they hoped to achieve before they went into the initiative. There’s sort of an assumption that cost savings would be good and would be achieved if you just ship some work to India. So I think what’s very important, and where we see organizations struggle, is if they don’t have a strategy as to what they are going to outsource and why. They haven’t built a business case as to what are the benefits they hope to achieve — both from the standpoint of process improvement and cost reduction…Also, the other mistake firms make is they tend to view that once a transaction is completed, they can walk away. It’s outsourced, it’s out of mind. However, that’s when the real work just starts. That includes looking at how you do the transition; how you
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perform the ongoing outsourcing management and governance activities; and how to work closely with the outsourcer to ensure success. That’s where a lot of organizations really don’t invest enough up front because they view it as “out of sight, out of mind” and that’s a really dangerous approach to take.
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WDI: With this changing business environment, what skill sets will managers need? LePeak: I think skill sets will need to be those that can look at harnessing resources that exist inside and outside the company and exploiting them to become more competitive. If you get anything you want with a good business case because the skills are available and the costs make sense and if you can build that business case, it’s different than saying, “we’ll do the best job we can with limited resources.” More often it’s going to be, “we’ll do the best job we can by leveraging these resources that are out there, understanding where to get them and why and for how long.” So it’s going to become really more management of a global set of participants or components into an operation. That’s not different than what it’s been to manage a large multinational where you had that resource base internally. But now the option to get resources is greatly expanded so it’s going to require a strong sense of globalization, a strong sense of putting those components together and certainly a strong sense of getting the best piece of the puzzle you need from wherever you can get it from. And don’t take the view that it has to be invented here or has to come from within our own walls, because those are the firms that are going to struggle. That’s because what we’re really witnessing in services is an ongoing movement from vertical integration to horizontal specialization. I don’t own end-to-end, I just have this piece and I’m very good at it and I pick my partners well. So picking the partners well is not only getting more lucrative but also more complicated.
Stan LePeak
is a Managing Director at EquaTerra, the outsourcing and insourcing advisory firm. He leads EquaTerra’s EQuation Research, Training and Education practice area focused on global Information Technology and Business Process Outsourcing.
calendar S P E A K E R S
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Leadership Seminar taught by Neil Sendelbach March 15-16, 2006 | Costa Rica
C O N F E R E N C E S
The Energy Future: China and the U.S. hosted by WDI Distinguished Fellow Kenneth Lieberthal | February 8, 2006 WDI Social Enterprise Speaker Series | Valeria Budinich, Vice President at Ashoka USA February 8, 2006 WDI Corporate Speaker Series | Somshankar Das, President and CEO of e4e March 15, 2006 Corporate Speaker Series | Anurag Jain of Perot Systems March 29, 2006 WDI conference Research at the Base of the Pyramid: Developing a New Perspective May 18-20, 2006 Latin American Social Enterprise Symposium co-sponsored by WDI and NESsT June 8-9, 2006
✏
E X E C U T I V E
E D U C A T I O N
Leadership Seminar taught by Neil Sendelbach April 3-4, 2006 | Mexico Leadership Seminar taught by Neil Sendelbach May 3-4, 2006 | Chile Leadership Seminar taught by Neil Sendelbach May 11-12, 2006 | Dominican Republic General Management Program (10 day mini MBA) taught by John Branch, Neil Cohen, Prashant Kale, Christopher Kayes, Anna Kayes and David Sharp May 15-25, 2006 | Croatia Brand Equity Program taught by Rajeev Batra May 24-25, 2006 | Guatemala Advanced Management Program (4 sessions in 10 days) June 12-23, 2006 | Chile Human Capital Congress taught by Dave Ulrich June 20, 2006 | Chile
Training Program for Moroccan Entrepreneurs (in Arabic) February 27-March 3, 2006 | Morocco
Supply Chain Management taught by Izak Duenyas June 19-20, 2006 | Chile
Training Program for Moroccan Entrepreneurs (in French) March 6-10, 2006 | Morocco
HR Network Seminar taught by Wayne Brockbank June 20-21, 2006 | Hungary
Brand Equity Program taught by Rajeev Batra March 10-11, 2006 | Croatia
NON-PROFIT U.S. POSTAGE
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THE WILLIAM DAVIDSON INSTITUTE
ANN ARBOR, MI
AT THE UNIVERSITY OF MICHIGAN
PERMIT NO. 144
William Davidson Institute 724 East University Avenue Ann Arbor, Michigan 48109-1234 Tel 734.763.5020 Fax 734.763.5850 www.wdi.umich.edu
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Brand Equity Program taught by Rajeev Batra March 13-14, 2006 | Slovenia