Sunday, May 25, 2014

What’s the Future for Business Education?


An article in the Economist states that “the master of business administration is one of the success stories of our time. Since it was first offered by Harvard Business School in 1908, the MBA’s rise has seemed to be unstoppable. Having conquered America, it reached Europe’s shores in 1957 when INSEAD, a French school, launched a programme. In the past couple of decades, Asia, South America and Africa have succumbed. Today, it is the second most popular postgraduate degree in America, after a postgraduate degree in education.”
 
Whether a fan, or not, of the MBA many may be surprised by just how long ago this postgraduate degree was first offered and be intrigued by its success over the years – since as a ‘brand’ it has had phenomenal success over the last 100 years.
 
The Economist article goes on to highlight how “whereas 40 years ago, American colleges graduated similar numbers of lawyers and MBAs, nowadays nearly four times as many students pass out with a business-school master’s degree than with a law-school one. Although demand among Americans (for MBAs) is plateauing, the slack has been taken up by emerging markets, particularly in Asia. India now has around 2,000 business schools, more than any other country. China has fewer, but their numbers are growing quickly. It has an estimated 250 MBA programmes, graduating about 30,000 students each year, which is less than half the number it is predicted it will need over the next decade.”
 
The problem with growth of programmes like this is that, as the number of MBAs increase, recognition and quality of the programme starts to decline – whether this is just a perception or a fact hasn’t been substantiated yet – but in business it’s often perceptions that matters most. So as the numbers of MBAs increase the exclusivity around this qualification has nowhere to go but down –  and when you start finding MBAs out of work then you have to question what’s happened to the MBA brand over the years.
 
So in the post-financial crisis environment MBA students are beginning to question the return on investment of such expensive programmes; while business schools claim their graduates are less concerned than they once were about earning fabulous salaries. Where many Business schools find themselves no longer trumpeting the number of students who get high-paying jobs in finance, instead reeling off examples of those who join non-profits or launch social enterprises. While salaries for MBA graduates have fallen, tuition fees have risen. At Chicago, the Economists top-ranked Business school, two-year’s tuition costs $112,000 and Harvard’s prices have risen by nearly $25,000 since 2008.
 
As with any business environment, as the number of competitors increase, Business schools have been forced to look at the ‘offerings’ and look for ways to identify new ‘niche’ markets and identify new areas of competitive advantage. So it should come as no surprise that “the days in which students study a broad set of management skills, with little specialisation, is numbered. Most business schools now encourage students to concentrate on one area, such as finance; and an increasing number of MBA courses are tailored to particular industries, such as health care, luxury goods or, in one case, wine and spirit management. Business schools are expanding in other ways too. University administrators are wont to view them as cash cows and allow them to graze on other faculties accordingly. For years, they have been poaching professors from economics departments. Now they also woo psychologists and sociologists to teach softer subjects such as leadership and organisational behaviour. And their scope seems to be expanding.”
 
Of course the problem of redefining a product to find that ‘unique’ competitive advantage can lead to a completely new product that has no bearing on the original purpose, in this case a ‘broad exposure to business’. ‘Original’ MBAs always included elements on organisational behaviour and the methods of learning often encouraged practical leadership, without giving it a specific title. Also the ‘original’ programmes did allow students to specialise in their second year or final term (depending whether the programme was being done part-time or full-time). And further students could specialise when it came to the choice of their final project and dissertation.
 
So ‘we’ have to be careful that the current over-commercialisation of the MBA doesn’t actually lead to the dilution of this once valuable qualification – where the MBA actually becomes an MSc in some chosen specialisation. This constant ‘re-branding’ will inevitably lead to confusion in the ‘market’ as employers may no longer be clear what the MBA actually means in terms of learning and the skills the graduate will bring to the work place.
 
The strength of the MBA used to be that it gave ‘students’ access to fast-track learning in business principles across the whole functional spectrum of business – which then, with the ‘right’ employer, could be put to excellent use in the practical environment to add real sustainable value to the employing organisation. There is no doubt that this is what the business sector needs and future MBA programmes mustn’t lose sight of why they were so successful in the first place and businesses need to demand more from their local Business schools.
 
References:
 
Briefing Business Education: Change Management. The Economist. 12-18 October, 2013. P.78.
 

Sunday, May 18, 2014

How Do You Keep Your Suppliers Honest?

In a 2010 article in The Wall Street Journal, Mark Vandenbosch and Stephen Sapp wrote that “globalization and its relentless drive for efficiency have led us into a world of long and complex supply chains. Even ‘simple’ products, such as cereal bars, can be made of ingredients from more than eight countries on four continents. Such complexity has led to higher productivity for companies and lower prices for consumers. But there's also a dark side: Complex systems, with a plethora of suppliers, are increasingly prone to failure and, on occasion, spectacular collapse. Contaminated pet food or peanut products, lead paint in children's toys, imploding financial products - the list is well known and growing. But in each case, the cause is essentially the same: a failure to guard against suppliers acting in their own interest.”
 
The problem with managing integrity is that the unscrupulous supplier doesn’t have a sign on their forehead clearly showing they aren’t honest and don’t have the same set of values as their moral customer. They are often pretty proficient in acting in a very professional manner and giving all the right ethical signals to those they supply. But behind the fa├žade is a ruthless business person whose main driver is to maximize profitability, not just through minimizing costs, but through cutting costs beyond the fair and reasonable to the darn right criminal – and they do it because they believe they can get away with it.  
 
As Vandenbosch and Sapp mention, “such opportunism often leads suppliers to take advantage of poorly written agreements, or simply break them outright if the risk or cost of getting caught is low. And the deeper they are in the process, the further from the end customer, the less responsibility they are likely to show in the absence of effective controls. Supply chains aren't going to get any simpler. So companies need to dig into the details of their supply systems to understand their risks, and work to prevent problems.”
 
Unfortunately in the highly competitive world most businesses operate in today means that organisations can realize way too late that they have got in to bed with the wrong supplier, having been ‘hocked’ by the promise of low cost supplies within spec etc.  An interesting example is the milk crisis that ravaged China in late 2008. A year earlier, the North American pet-food scandal showed how the standard test being used to measure protein could be ‘beaten.’ Opportunists in the Chinese milk supply chain used the same procedures to lower their costs. No market participant should have been surprised that this was possible. However, without an ability to recognize new risks and update procedures, corrections are likely only after a failure occurs within one's own organisation – which of course is way too late.
 
Mark Vandenbosch and Stephen Sapp highlight four pretty obvious steps to check for the integrity and stability of products from suppliers – but steps it possible some organisations overlook in the quest for low cost supplies;
 
1) Constantly monitor potential risks in the market – where eliminating opportunism is impossible, but that is no excuse for not being vigilant about suppliers and how they meet their obligations. Sometimes managers let their devotion to efficiency prevent them from taking steps to avoid problems, even when new risks are apparent;
 
2) Make suppliers and intermediaries responsible and accountable – where the most common weakness in a supply chain is what is often referred to as moral hazard: For example, if a supply chain has intermediaries whose compensation is based solely on the volume of orders passing through, there is little incentive for them to root out opportunism beneath them in the chain.;
 
3) Change the way you test measure – meaning that opportunistic suppliers will test a company's limits in order to find the minimum acceptable standard. Often, a company will allow small deviations again and again, until the exceptions become the norm and threaten the integrity of the entire chain.
 
4) Understand and accept the role of regulation – where regulation adds to costs and runs counter to the goal of ever-increasing efficiency. But if the costs mitigate or dramatically reduce the risks of failure, then regulation is the most efficient way to curb opportunism and decrease costs in the long run.
 
The most basic step in keeping your suppliers honest is never to assume anything; to build strong relationships built on integrity and good communication as a natural progression of any supplier relationship; and to have checks and balances in place to ensure that no supplier can undermine their service to you.
 
References:
 
 
Vandenbosch, M. and Sapp, S. (2010). Keep Your Suppliers Honest. The Wall Street Journal. [On-line: http://online.wsj.com/news/articles/SB10001424052748704259304575043634035220078?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052748704259304575043634035220078.html]
 
 
 
 

Sunday, May 11, 2014

Are We 'Over-Selling' Leadership?

When the great leaders of decades and centuries past were motivating their followers to achieve a pre-defined goal, I just can’t picture their loyal followers having debates about whether Alexander the Great or Martin Luther King or Mahatma Gandhi was a ‘Thought Leader’, or a ‘Transformational Leader’ – these kind of titles wouldn’t have interested them. They just had a leader that inspired and motivated them to want to follow – plain and simple.
 
In a 2012 article by Shel Israel in Forbes, he writes that “the term ‘thought leader’ seems as much in vogue today as ‘social media expert,’ was yesterday. Both terms are over-used, or so it seems to me, and that unfortunately lessens the impact of the words. Many people and companies claim thought leadership. Few achieve it.  In fact, the definition itself seems to be in flux.” Where Joel Kurtzman, now with the Milken Institute invented the term in 1994 as a theme for a series of interviews he conducted as editor in chief of Strategy + Business magazine. He defined a thought leader as someone who had ideas ‘that merited attention’. Which to be honest doesn’t really cut it for me as a definition about leadership to get really excited about.”
 
It seems to me that you can’t be a ‘proper’ leader if people aren’t following you willingly and that you, as a leader, have and achieve a ‘goal’ that benefits everyone – a goal that your followers understand (including the benefits and the risks involved).
 
Looking at some historically great leaders can always help bring us back to a potential path of effective leadership and the values that drive this phenomenon. In an article in Forbes (2009), Steve Forbes and John Prevas wrote that “Alexander the Great’s leadership style reflected his conviction that a man of ability and determination could inspire and direct others to accomplish anything he set his mind to. For Alexander it was all about conquest – ‘acquisitions’ in today’s corporate world. Alexander was able to connect with those he led because he exuded determination, projected confidence and ability, and generated excitement and passion for what he was doing. As the CEO of his enterprise, Conquest Inc., he was intensely involved in operations at every level; he believed in leadership by example. While he drove his officers and soldiers - sometimes mercilessly - through jungles and deserts and over mountains, he also inspired them with his personal courage and rewarded them generously for their efforts. His willingness to remain at the forefront of every operation, never asking more from those he led than he himself was willing to give, is what enabled him to keep his army behind him for so long.”
 
It seems that while ‘suppliers’ of leadership development are continuingly trying to repackage the ‘basics’ under some mouth-watering new theory that organisation’s will pay fat fees to learn – the leaders themselves are pretty much developing as before – which sadly isn’t that well. 
 
Command and control styles of leadership are so easy to adopt by those in leadership and the style doesn’t require much skill or talent – just the ability to use you position to get things done. It makes their ego’s feel good and they do see things get done – so for this type of leader, it all seems to work pretty well.
 
Yet as Sangeeth Varghese wrote in The Economic Times in 2010 “Leadership is changing! Modern companies are discovering that the command-and-control leadership methods of the previous century are extremely inefficient in the current fast-changing world. To attract and retain employees, today's work environment must focus on inspiring their capabilities in a much more open manner, compared to the earlier closed leadership model centered on the capabilities of a single leader. In the command-and-control leadership style, the leader was set apart by his position and was the sole authority for decision-making, while the group members just followed the orders with no specific authority or responsibility. This worked well in a factory kind of environment where more importance was on control. However, in the new age of technology this resulted in lack of innovation, creativity and accountability. Companies slowly started leaning towards leaders who saw themselves more as partners, supporters, coaches and facilitators. This helped the group members to make decisions along with the top management about how to do their jobs, helping these companies to perform better than their rivals on employee retention and morale, and other measures like innovation, profitability and market leadership.”
 
What we desperately need now are less debates around what to call effective leadership and more focus on the simple day-to-day actions of leaders becoming more effective in what they do – and inspiring and motivating their followers to want to follow them.
 
References
 
Forbes, S. and Prevas, J. (2009). The Price of Arrogance. Forbes. [In-line:  http://www.forbes.com/2009/06/18/alexander-great-hubris-leadership-power.html]
 
Varghese, S. (2010). Command-and-control leadership is history. The Economic Times. [On-line: http://articles.economictimes.indiatimes.com/2010-12-10/news/27591286_1_leadership-responsibility-authority]
 
 
 

Sunday, May 4, 2014

Should We Enjoy the Job We Do?

Erika Andersen, wrote in Forbes (October 2013) that “most people don’t love their jobs.  In fact, many studies show that only about 1 in 5 people really enjoy their jobs, about 1 in 5 actively dislike their jobs, and the rest are fairly neutral on the topic. Since most of us spend more time working than doing anything else except sleeping, this seems unfortunate. Unless you’re the kind of person who derives more satisfaction from complaining about something than you would from enjoying that thing (I know there are some people like that), it seems as though it would be better to like work more.”
 
We’ve probably all met people who don’t enjoy going to work – yet go through the routine day after day, sometimes until they die an early death from a heart attack or other nasty medical condition. I’ve often wondered what their last thoughts might be on their life and ‘work-life’ balance and choices. One can only imagine a shrill cry of ‘damn’ or something worse as they wonder why they put themselves through the daily agony just to have their life cut short, before they can enjoy the pension plan or other financial incentive that kept them blindly locked into a job they simply hated doing.
 
Admittedly money is important, but in the big scheme of things and considering life is indisputably finite, enjoying yourself as much as possible why you are here should be a priority – a fact that is sadly realized way too late in the game – when the best years are behind you.
 
A 2013 Gallup poll in the US painted a much worse picture finding that “an alarming 70% of those surveyed either hate their jobs or are completely disengaged, and not even incentives and extras can extricate them from the working man's blues. The other findings of Gallup's 2013 State of the American Workplace report were grim; at best, 30% of the 150,000 full and part-time workers surveyed honestly enjoyed their jobs and their bosses.”
 
The survey further highlighted that “a full 20% of respondents are what Gallup classifies as ‘actively disengaged,’ the ones who are muttering complaints at the water cooler and using their lunch breaks to scour job postings online. The remaining 50% of U.S. workers are ‘disengaged,’ according to the report, meaning that while they show up for work; they are not inspired by their managers.”
 
The Gallup report highlights how “many surveyed complained of ‘bosses from hell’ who ignored talent and didn't cultivate growth. But the implications of the report go much deeper. The report states that the dissatisfaction, anger, and boredom felt by US workers hurts the economy, (which has been feeble since the Great Recession of 2008). It also costs the U.S. an estimated $450 billion to $550 billion per annum of lost productivity, stolen goods, and missed days of work.”
 
Job satisfaction is a two-way street. Firstly it’s the employee’s responsibility to look for and find work that they genuinely enjoy doing. Where obviously a ‘why do I have to work’ attitude is simply someone living in a state of denial about what life actually entails.
 
But employers have a few responsibilities of their own – firstly to educate ‘kids’ about work and employment opportunities so that kids can start to target careers that genuinely interest them and for which they have the required skills, talent and drive; which means unfortunately ‘no’ you are unlikely to be a ‘celebrity’ of some kind.
 
Then secondly you have to hire the right people for the right job; and thirdly employer’s should make work ‘interesting and fun’ – understanding the simple philosophy that employees who enjoy their work, will be more engaged with your organization and from this you'll naturally receive improved motivation that will have a direct positive impact on productivity, customer service and your bottom line.
 
So the simple fact  is that you should enjoy your job, at least for the majority of your career – and if you’re not, maybe it’s time to take a long hard look at yourself and appreciate that you’re mortal and should make the most of the time while you’re here – as this isn’t a dress rehearsal.
 
References
 
Andersen, E. (2013). Six ways to like your job more. Forbes. [On-line: http://www.forbes.com/sites/erikaandersen/2013/10/28/6-ways-to-like-your-job-more/]
 
Stebner, B. (2013). Workplace morale heads down: 70% of Americans negative about their jobs, Gallup study shows. Daily News. [On-line: http://www.nydailynews.com/news/national/70-u-s-workers-hate-job-poll-article-1.1381297]