Why influencing is more important than selling

Business Impact: Why influencing is more important than selling

Whether you are in sales or management, you need to influence at all levels to succeed, say authors Jeremy Cassell and Tom Bird. Discover the attributes of those who influence effectively and three foundational elements that you can develop

Who are we to say that selling is not important? Selling, however, is a subset of influencing. And it does not have a good reputation. When you ask which words or phrases people in organisations associate with selling, responses often include ‘manipulation’, ‘self-interest’ and ‘pushy’ – in other words, almost always negative words or phrases.

So, the key skill to focus on, if you want to get ahead in any career, is that of influencing, up and down in an organisation and with key external stakeholders.

Influence more people, more of the time

Influencing is about producing an effect on an individual or group by imperceptible or intangible means. It is about shaping and determining a response, which will be linked to your outcome. There are few things more fundamental to success in today’s work environment than an ability to influence effectively. It’s strange how so many people have limiting beliefs about their own ability to influence. Anyone in business can improve their ability to influence if they are self-aware and willing to learn what it takes to influence more people, more of the time.

It was not many years ago that personal success had much more to do with positional authority and power. In recent years, however, the world has changed significantly. Daniel Priestley’s book, Become a Key Person of Influence, describes how in many areas of commerce and work there are KPIs: Key People of Influence. These are people who exert a greater influence on the system than those around them or, indeed, their positional authority would suggest. What will it take for you to become a KPI?

Whether you are in sales, management or some other business role, you increasingly need to influence people at all levels to succeed. Over many years now, we have been fascinated by the subject of influencing, first as salespeople, then as managers in a variety of organisations and now as consultants and trainers working with people at all levels in business. We also know that a lot has been written about the theory of effective influencing by Robert Cialdini [Professor Emeritus of Psychology and Marketing at Arizona State University], Noah Goldstein [Professor of Management and Organizations at UCLA Anderson School of Management] and many others. Our focus, however, is on the practical ‘how to’ of influencing – what does it take for someone to be able to influence effectively in any situation, on an everyday basis.

Attributes of those who influence effectively

Typically, businesspeople who are exceptional at influencing share a common set of attitudes and behaviours that consistently get great results through:

  • Listening attentively.
  • Uncovering needs and wants because they appreciate that everyone is unique.
  • Empathising continuously.
  • Identifying benefits of solutions.
  • Neutralising resistance, often through ‘pre-suasion’ (a term coined by Cialdini: influencing in advance).
  • Finding alternative ways to influence others and demonstrating high levels of flexibility.
  • Improving sensory awareness. This means that their senses are finetuned to notice the smallest details, including non-verbal signals that are sometimes different from what a person is saying.
  • Creating a high degree of rapport.
  • Base the success of their communication on the response it produces in others.

Just consider this for a moment – think of a time in the last six months when you wanted to buy something. You did not need to be persuaded about a product, the price was acceptable, and you walked into a retail store but left without buying the product. If this has ever happened to you, there is a good chance that the person serving influenced you not to buy! The salesperson may have done one (or more) of the following:

  • Confused you with feature overload.
  • Did not listen to what you wanted.
  • Ignored you.
  • Did not ask you any questions.
  • Asked you what you perceived as being an annoying question.
  • Did not have the exact information you wanted.
  • Seemed to lack confidence.

Evidence suggests that, when confronted with these sorts of scenarios, many people are prepared to pay more for the same service or product from another supplier or, more likely nowadays, online.

Confidence, credibility and connection

Maybe you have also had the experience where you bought something from someone you really liked and then suffered from buyer’s remorse at some stage after the sale had taken place, as you realised you did not really need what you had bought.

What is going on here? How is it that even sophisticated people are influenced in this way? It seems, on the face of it, entirely irrational. What is happening is that you are being affected by the foundations of influencing – confidence, credibility and connection. What we call the ‘C3 Model of Influencing’.

In most influencing situations, it is unlikely that anyone will buy an idea, product or service off anyone unless they have demonstrated confidence, established credibility and built a connection with the other parties.

It is ‘C3’ because its strength comes from when you have all three elements in place – it’s exponentially more powerful. If you only have two elements working, you will be far less influential. These three components are the foundation of effective influencing. If you focus on developing these, you will be able to utilise the skill of influencing in any situation.

Anyone can influence effectively – you only need to pay attention to three key elements to develop your influencing skills and/or your mindset.

Jeremy Cassell and Tom Bird are coaches, trainers, keynote speakers and co-authors of Brilliant Selling (Pearson).

Headline image credit: Taylor Nicole on Unsplash

Developing dynamic capabilities

Business Impact: Paragraph: Change block type or style Change text alignment Displays more block tools Developing dynamic capabilities

The recently established Faculty of Economics at Hungary’s Eötvös Loránd University is moving to meet growing demand in business and economics with an emphasis on preparing students to adapt to the unpredictable. Tim Banerjee Dhoul talked to Gabor Zemplen and Judit Fortvingler to learn more 

Budapest’s Eötvös Loránd University (ELTE) is steeped in history. Originally founded in 1635 in Nagyszombat (today, Trnava in Slovakia) it moved to Buda in 1777 (the historic capital of the Kingdom of Hungary which, since 1873, comprises the western part of today’s capital, Budapest). In 1950, it acquired its current name, in homage to the renowned physicist and faculty member, Loránd Eötvös. Today, ELTE counts four Nobel Prize laureates among its teachers and alumni, and the number of students is roughly 33,000. 

The establishment of its Institute of Business Economics (ELTE IBE) and the transition, last year, into the Faculty of Economics – ELTE’s ninth faculty (ELTE FE) – are more recent developments, born out of the rapid growth of students studying economics and business at the university. 

Business Impact talked to faculty members, Gabor Zemplen and Judit Fortvingler, to find out more about this rising level of interest and gain insights into ELTE Faculty of Economics’ pedagogical approach and outlook.

How healthy is the current market for business education in your country, and the surrounding region, and what are the main challenges?

The number of international students in the region is increasing rapidly, and in Hungary, state-funded scholarships for students from developing countries also help with the recruitment of young talent. Naturally, recent events have upset the current trends. With an influx of refugee students from Ukraine, many of whom come from Africa, ELTE is able to provide for their continuing education during the crisis. 

At the national level, business education is very popular among students, and is probably the field with the highest number of competitors: more than 30 universities offer such education, and students themselves help in ranking these institutions through their choices. We have the highest number of postgraduate (and MBA) applications and students, and we are in the top two for undergraduate excellence, with an increase of more than 60% in the number of applicants
who ranked ELTE as their first choice for next year. This is a huge success, given that the overall number of higher education applicants has decreased this year. 

Has the Covid-19 pandemic influenced your School’s long-term strategy? If so, how?

We had used certain IT tools to support our master’s students’ learning experience even before the pandemic started in 2020, so it did not hit us dramatically. The new external circumstances forced us to extend the use of available systems to bachelor’s-level programmes and to widen the scope of IT solutions in teaching. 

After a smooth transition to an online environment in spring 2020, the School’s management started to consider the future: after overcoming Covid-19, should the faculty return to ‘traditional’ teaching tools, or should it implement a combination of pre-Covid and pandemic tools? Our approach differentiates us from other leading Hungarian universities and is twofold. 

On the one hand, we have realised that certain tasks (for example, consultations, the oral entrance exam at master’s level, and project work presentations) could be implemented more efficiently online. In addition, our students – especially master’s students who work [in conjunction with their studies] – favour this channel because of the time factor. 

On the other hand, we have abandoned paper-based assessments. Certainly, the first steps to eliminate printed tests were necessitated by the pandemic, but then it became part of our long-term strategy. In autumn 2021, we opened an exam centre with a capacity of about 200 students per timeslot, which is unique in the region. 

Another lesson learnt from online teaching was that students’ learning methods have changed, and they are accustomed to relying on video-recorded lectures to extend their knowledge. Consequently, we have just opened a video library on campus where students can book a computer station in advance and watch the recording of any bachelor’s or master’s lectures or seminars of the semester (term).      

I understand that programmes at ELTE FE aim to incorporate other disciplines, such as psychology and computer science. Why is this mixing of disciplines important to students of economics and business?  

We have realised that, due to the availability of the internet, factual knowledge has become less important in the past decade while certain 21st-century soft and transversal skills, like critical thinking, negotiation skills, people skills, organisational and IT skills, have become indispensable for future businesspeople. It is these skills that we aim to help our students acquire to ease their transition into the business world and to prepare for the integration of the not-yet-known and the ever-changing world around us. 

These days, we offer several courses to bachelor’s students that have become increasingly important for practising business professionals, including law and advanced IT skills. By teaching students about human behaviour and communication, we also help them develop a growth mindset. We even have courses specifically targeting meta-expertise (for example, ‘Transdisciplinarity and expertise’) as it is not hard to see how technological change impacts expertise quickly in the fields of finance, marketing, and so on. Reacting to the dynamic development of IT in the fields of accounting and finance, for instance, we have just launched a new course on ‘Finance and Accounting Informatics’ for our bachelor’s students.

In a recent interview, Dean of ELTE Faculty of Economics, György Andor, described the School’s vision as being ‘to train open-minded, versatile, and creative economists’. Why are these characteristics important in the world of business today? 

Economics students learn about the nature of business cycles and the occurrence of periodic crises that have challenged the world in the past. Having the previous patterns in our mind, we emphasise and teach the importance of planning in business. However, in the past few years we have faced new, hardly predictable circumstances that one has to adapt to, such as the pandemic, or the war in Ukraine. 

No one can find a precise description in a textbook of what to do and how to settle into new situations, both in business and our private lives. We train our students to be creative, versatile, and open-minded, which means that, based on the relevant acquired factual and applied knowledge, they can tailor a solution to any new scenario. We also help our students understand the viewpoints of both an employer and employee, and multinational and national companies, given the macro and micro interests. Our priority is to develop students’ dynamic capabilities to be proactive or reactive, as is required.

ELTE FE offers English-language degrees at undergraduate level. Do you have any figures on the proportion of international students that are normally enrolled in these programmes? How popular are they with domestic students in comparison to the bilingual and Hungarian degrees?

We started with four bilingual undergraduate degrees (English and Hungarian) in 2018, and from 2019, we have also offered two of these as English-only degrees (Finance and Accounting, and International Business Economics). These are becoming increasingly popular among Hungarian students with an approximately threefold increase [in admissions] in the last year. For the coming year, we already know that around 300 more prospective students have applied, compared to last year. The ratio of international students is around 25% this year, and for the coming year the applications are still open.

What were the reasons behind last year’s launch of ELTE’s Doctoral School of Business and Management? 

Since its foundation, ELTE Faculty of Economics (previously, the Institute of Business Economics) has aimed at offering the full range of higher education, from bachelor’s to PhD studies. We are a young faculty with talented and experienced staff. 

The story goes back to 2017 when a cohort of 40-50 excellent tutors with outstanding academic performance, supported by the senate of ELTE, started work on building the Institute. Most of these tutors had been working together at bachelor, master’s, and doctoral levels for about 15 years, so it was evident that we had the expertise to obtain accreditation for each of the three levels. 

The rapid growth in the number of students we received initiated the transition from an institute for business economics to a faculty of economics and was eased by the PhD programme accreditation. In other words, the intention and experience to run a PhD programme was present, but we first had to reach maturity by running relevant postgraduate programmes for consecutive years.  

Business Schools are often encouraged to play a greater role in their communities. Can you give an example of a new event, activity, or initiative with this in mind? 

Community-building has certainly not been eased by Covid-19, and one present initiative aims at forging international relationships with similar institutions outside Budapest and Hungary to help like-minded students form groups, cohorts
and alliances. 

For example, our students have been actively involved in case study competitions, which serve as a bridge between knowledge acquired at university and real-life business experience. One student from our bachelor’s in finance and accounting has been awarded second place at an international competition organised by Baker Hughes and the ACCA (Association of Chartered Certified Accountants). Currently, we are working on a business game project together with the ACCA, where a group of students solve a case study under the guidance of mentors.  

The most recent initiative, however, responds to the largest crisis in our region in years, whereby ELTE Faculty of Economics has allocated 40 new guest studentships for refugees from Ukrainian universities for the 2022 spring term. Tuition fees for the term are waived and while half of the quota is reserved for Ukrainian or Ukrainian-Hungarian citizens, students of other backgrounds from Ukrainian universities are also welcome. Guest students wishing to continue their education at the Faculty of Economics beyond the spring semester can do so as fee-paying students after going through the regular application and admission process. 

What does ‘responsible management’ mean to your School? 

Our vision is to educate students who, on graduation, will be successfully integrated into business life, either as an employee or an entrepreneur starting their own business. One core objective of responsible management is to help our students acquire the necessary skills and applied knowledge to smoothen their transition to real life. We receive direct feedback from our students on whether their perception of service quality in teaching is in line with our expectations. 

Our faculty cooperates intensively with companies through guest lecturers and traineeships, so we serve as a bridge between our students and the employers. Based on this experience, the School’s management has a clear understanding of trends in the labour market.   

Moreover, faculty management is accountable to the provider – which for our university is the central government – for the funds used. Responsible management includes not only the use of resources in accordance with the applicable rules, but also the implementation of the so-called ‘three Es of management’: efficiency, economy, and effectiveness. Through our performance-reporting system, there is ongoing monitoring of how tutors accomplish the key targets.

In short, managing a faculty is an opportunity to educate talented youngsters and a significant responsibility to make the best use of funds while achieving our targets.

What plans does your School have for the next three years? 

We aim to maintain and stabilise our achievements on the national market with moderate growth with respect to international students. We plan to pursue our ACCA accreditation and the BGA membership. 

In turbulent times, it is exceedingly difficult to have reasonable predictions about the future environment, but we hope that our adaptability to change will help us maintain our current position on the market as the leading provider for master’s degrees in economics (we run around 30% of the national market for these programmes), and as lucky tutors teaching many of the brightest undergraduates
in Hungary.

Gabor A Zemplen (pictured, left) is Vice Dean for International Affairs, and Professor at the Department of Argumentation Theory and Marketing, Eötvös Loránd University (ELTE) Faculty of Economics, Hungary. 

Judit Fortvingler (pictured, right) is Director of International Affairs, and Assistant Professor at the Department of Finance and Accounting, ELTE Faculty of Economics, Hungary.

This article is adapted from one which originally appeared in Business Impact’s print magazine (edition: May 2022-July 2022).

How cultural intelligence impacts DEI in the workplace

Business Impact: How cultural intelligence impacts DEI in the workplace

High cultural intelligence in leaders is positively correlated with organisational performance and can help us tackle bias in recruitment, says Included’s Lydia Cronin

To be culturally intelligent is to adapt and operate effectively in a range of contexts. These can be across national, ethnic, organisational, generational, and departmental settings.

Cultural intelligence capabilities

Cultural intelligence is made up of four key capabilities. These are:

  • Drive: The curiosity and motivation needed to work well with those who are different to us.
  • Knowledge: Learning and understanding different cultures and what makes groups different.
  • Strategy: Embedding this understanding into your plans and how your organisation does day-to-day work.
  • Action: Adapting your everyday behaviour in light of your knowledge and experience.

If we build our own cultural intelligence, we can play a significant part in improving diversity, equity and inclusion (DEI) at work.

Diversity

In a globalised world of work, managers and leaders often need to have the ability to manage teams who live in different countries and represent a range of different cultures.

A diverse workforce will be made up of a range of different demographic groups and, post-pandemic, these groups are also likely to have a range of different flexible working arrangements and needs. This diversity is the reality of organisations and our society. With cultural intelligence, you can leverage the power of a globalised workforce, as your ability to perform in a cross-cultural situation is increased.

In recruiting, there can be a risk of confirmation bias. This is a natural human tendency to look for evidence that supports our held beliefs and avoid information that conflicts with these held beliefs. Additionally, some organisations look to hire based on ‘culture fit.’

Both of these tendencies, especially when overlaid with one another, can result in recruiters repeatedly hiring candidates who are like themselves. This results in teams that lack diversity of thought and often approach problem solving in the same way. By developing our cultural intelligence, we can tackle bias in recruitment by increasing our understanding and familiarity with those from different groups to us.

Additionally, being comfortable and effective when working across different cultures will turn us away from seeking to hire based on ‘culture fit’. In conjunction, this will support the de-biasing of the recruitment process and make it more likely that your organisation is hiring inclusively and building a diverse team.

Equity

Equity is not the same as equality. Equality means providing everyone with the same, regardless of their needs or circumstance. Equity, however, looks to give people what they need in order for the resulting playing field to be level.

Using the cultural intelligence you have been building at work will mean you can account for the cultural differences across your organisation and the needs of different markets and people. Building on the key ‘Knowledge’ capability referred to above means you will be developing an understanding of the way different groups will need to be supported and empowered in order to have an equal, meritocratic experience of work.

Inclusion

How do people feel once they have joined an organisation? Inclusion is a critical part of organisational culture. High levels of cultural intelligence can support workplace inclusion.

The ‘Action’ capability which is essential to cultural intelligence requires behaviour adaptation. Consciously modifying our behaviour to be inclusive creates a safer environment for those around us. It limits microaggressions and allows us to build a workplace culture where all of our colleagues feel able to be themselves at work. This, in turn, will help drive the innovation and effective problem solving that diverse teams excel at. Inclusion is an essential piece of realising this potential.

Culturally intelligent employees can drive up innovation and creativity across teams, as they are able to integrate diverse resources. High cultural intelligence in leaders is positively correlated with organisational performance. It boosts effective communication, meaning we’re better able to work across cross-cultural contexts.

Three ways to improve your cultural intelligence

If cultural intelligence can support creating more diverse, inclusive, and equitable organisations, how can we develop it?

1. Create a safe space: Psychological safety is one of the most critical elements of inclusion, but it is often overlooked. It’s crucial to create environments where all colleagues feel that they can share their true experiences without fearing judgement or backlash. In these spaces, we can have open dialogue and learn from one another. This develops the key capability of Knowledge as we better understand each other’s backgrounds, needs and motivations.

2. Acknowledge fears: Many of us will have avoided challenging conversations because we fear the repercussions of saying ‘the wrong thing’. Committing to the key capability of ‘Drive’, we can commit to our learning by normalising these feelings of fear and discomfort in order to have better, more insightful conversations.

3. Name it: Be specific and don’t dance around issues that need to be addressed. Using vague, indirect language for specific problems means it is unlikely that these issues will be addressed.

Cultural intelligence, and its key capabilities, can be trained and developed like muscles in a gym. By continuously working across these capabilities and the above steps we can become more culturally intelligent, no matter where we might currently be on this journey. With better understanding of people who are different to us, and proactively learning more as time goes on, we can be leaders and managers who create inclusive environments for those around us.

Lydia Cronin is Marketing Manager at consultancy, Included, and a contributing author to The Key to Inclusion: A Practical Guide to Diversity, Equity and Belonging for You, Your Team and Your Organisation, edited by Stephen Frost (Kogan Page, 2022).

Inspiring the next generation of entrepreneurs seeking social impact

Business Impact: Inspiring the next generation of entrepreneurs seeking social impact

Business Schools must ensure they provide the support needed to those wishing to launch ventures that can contribute to a more sustainable planet, says Xavier Arola, as he outlines the work of GBSB Global Business School’s startup hub

To be a business leader, you must be able to instigate real change. Innovation must be at the heart of your motivation, and that is why GBSB Global Business School believes that it is vital to give future business leaders the platform to grow and develop their ventures.

Through our ‘G-Accelerator’ startup hub, we aim to engage with individuals concerned with bettering the world and society by employing sustainable business models that are not only socially responsible, but also financially and environmentally sustainable too.

Early-stage support for ‘Triple Impact’ ventures

With a strong focus on both innovation and technology, the G-Accelerator targets next-generation entrepreneurs, particularly those with disruptive ideas that intend to launch businesses that will help contribute to a better society. The aim is to allow entrepreneurs to reach their potential by providing solid support and the necessary resources to succeed.

Once a year, the G-Accelerator has an ‘Impact Call’, a six-month pre-accelerator programme that provides training, mentoring, networking, and financial support services to early-stage entrepreneurs focused on developing a venture with a ‘Triple Impact’ – i.e. ventures that are socially, economically and environmentally sustainable.

The Impact Call offers a roadmap of 20 weeks from the first steps of ideation to the market, from product development to managerial skills and acquaintance modules. As such, the G-Accelerator aims to source and support those who want to develop their own business in a short but highly efficient timeframe.

The support, training and networking opportunities are invaluable. Those with access to the hub have access to a network of other entrepreneurs during and after their programme that spans not only across Spain, but also across the world. There are different profiles and development stages between the entrepreneurs and startups in this programme, and the exchanging of insights, concerns and results are of clear value.

Projects with the potential to create value for society

In partnership with the University of Vic – Central University of Catalonia (UVic-UCC) and the University of Northampton’s Institute of Social Innovation and Impact (ISII) in the UK, the G-Accelerator’s Impact Call is sponsored by the Catalan Government’s Ministry of Business and Labour and the European Social Fund.

Our shared mission with these partners is focused on promoting the impact economy. So, we look for projects where the creation of added value for society is the central element of the business model. By doing this, we intend to promote the circular economy and focus on real needs under the principles of sustainability, viability and feasibility.

Over the years, numerous successful ventures have developed through the G-Accelerator programme. The first is MIN Organics – an e-commerce platform that specialises in selling organic menstrual products in bulk, allowing women to overcome stigma and customise their menstrual cycle according to their individual needs. Founded by Anna Comas, MIN Organics [formerly, MYOX Organics] won Best Startup in the Pre-Seed & Seed category of the G-Accelerator Impact Call Programme 2020-2021 edition.

Then there is Orpheus – an enterprise focused on monitoring air quality and other criteria to improve people’s welfare, energy efficiency and reduce CO2 emissions while minimising costs. Orpheus won Best Startup in the Early-Stage category of the aforementioned Impact Call edition.

There is also Agua NEA – the first 100% plastic- and BPA-free mineral water brand in Spain, offered as an alternative solution to the hospitality industry’s massive plastic consumption. This startup is another beneficiary of the G-Accelerator Impact Call 2020-2021 edition.

Whether the idea is in its infancy or has already received partial funding, GBSB Global Business School invites individuals to apply to the programme in order to get expert mentorship and guidance in seeing their dreams become a successful reality. In a world where input is needed at a rapid rate to slow down the effects of climate change, we believe all Business Schools and universities should provide the support needed to those wishing to launch a venture that can contribute to a cleaner, more sustainable planet.

Xavier Arola is the G-Accelerator Programme Director at GBSB Global Business School, which has campuses in Spain and Malta. Xavier is also Head of Careers & Entrepreneurship Services, and a Professor of Investments and Entrepreneurial Finance at the School.

The role of Business Schools in driving equality

Business Impact: The role of Business Schools in driving equality

Educators must reach out beyond the walls of their institutions and address the most important issues facing society, writes Ellen Buchan

According to UNICEF, almost half of the world’s population – more than 3 billion people – live on less than $2.50 USD a day. This problem is exacerbated by the sharp divide between these extreme levels of poverty and the extreme wealth that exists on the other side of the income spectrum. Data from the World Inequality Report shows that inequality is rising, or staying extremely high, nearly everywhere. Since 1980, the share of national income going to the richest 1% has increased rapidly in North America, China, India and Russia, and more moderately in Europe. 

Before Covid-19, in the US, the top 1% controlled 38% of the total assets in the country – which is 16 times the total wealth of the bottom 50% combined. Other countries show similar patterns. 

The pandemic has only expanded these differences. In fact, the International Monetary Fund (IMF) found that while the severe impact of the Covid-19 pandemic is clearly seen in the numbers – 120 million people pushed into extreme poverty, and a massive global recession – some data shows an increase in another extreme: the wealth of billionaires.

This inequality has moral consequences for the structure of our global society. Inequality exacerbates social differences and reduces upward mobility – leading to greater stratification within communities. This, in turn, tends to lead to greater crime and social instability. The Equality Trust reports that rates of violence are higher in more unequal societies and goes as far as to suggest that more permanent decreases in inequality would reduce homicides by 20% and lead to a 23% long-term reduction in robberies. Political participation also suffers as the ‘have-nots’ struggle with daily needs and the ‘haves’ entrench themselves further. Nationalistic and nativist narratives harden.

Another consequence is the impact on sustainability and the planet. The have-nots are forced to live off the land, leading to deforestation – the Amazon and Indonesian rainforests being examples of this. These individuals are less likely to be able to access alternative energy solutions and thus rely on fossil fuels. They are both contributors to, and victims of, climate change. As a global Business School community, it is imperative that we should reach out beyond the walls of our institutions and address the most important issues facing our society, especially when these relate so closely to why we do business: to provide a living for ourselves and those around us in a global marketplace. 

But can Business Schools also be considered contributors to the current state? They are the producers of talent for the financial and consulting elites. The aim of corporations is to maximise shareholder value; asset stripping, private equity or suppressing wages are sometimes in the best interests of the firm.

To tackle these issues and more, AMBA & BGA, in association with Graduate Management Admission Council (GMAC), hosted a roundtable with Business School leaders. The ensuing discussion sought to delve into the role of Business Schools in addressing global inequality, to examine what’s changed and how far the points above resonate with decision-makers in higher education. Here are some highlights from that conversation. 

Sangeet Chowfla, President and CEO, Graduate Management Admission Council (GMAC)

As a Business School community, we have to change the conversation from one that puts the needs of shareholders and capital first to one that also looks at social, environmental, equity and social issues. A shift from the shareholder primacy view of business to a multiple stakeholder model. We should certainly do the tactical things – recruiting and admitting more diverse classes, creating the appropriate curriculum – but we need an intellectual framework around the role of business that goes beyond the Friedman model of shareholder primacy to one that is more inclusive in terms of environmental and social equity. Who else will build this framework if not the university?

The other thing is that technology has fundamentally changed how we deliver education. Education is no longer reserved for those who can put two years of their career on hold and afford to travel to a western, high-cost city for an MBA programme. Technology has enabled us, as Business Schools, to deliver in different ways, to create a flatter meritocracy or a more distributed, democratised form of meritocracy. This creates more equality of opportunity which can lead to equality of outcomes. After all, it does not seem that we can truly address equality if only a certain elite – economic or dynastic – however well-intentioned, is going to create a level future for all.

So, if we can do these two things simultaneously (build the intellectual framework for what capitalism looks like out into the future, and use technology to democratise or spread the creation of the meritocracy) then that contribution can be huge, changing the value of business education as we see it today.

Catherine Duggan, Dean, University of Cape Town Graduate School of Business

When I think about the role of Business Schools, I am always reminded of a quote from a Nigerian writer, Ben Okri. He writes: ‘We can redream this world and make the dream real’. I think those two elements are exactly what we do at a Business School: we are reimagining what the world could be and equipping ourselves and our students with the tools and skills to implement that vision.

Both parts are critical as we make a case for business education. We have an opportunity to re-dream things, but we also have a responsibility to pair that process with the tools to make things real; to make them work. Fundamentally, I think that, at Business Schools, we teach our students how to think about things in new ways, under new conditions. 

When I talk to our alumni, they don’t point to specific skills as the things that they continue to draw on from their MBAs. Instead, they point to the way they learnt how to see the world – particularly the way they learnt how to see new opportunities and spot new risks.

That’s what I see as our role: giving our students new analytical tools and ways of thinking about things, then helping them to put those tools together with their own experiences and unique worldviews so they can see things others don’t. I think that’s how you find new opportunities for social impact.

Johan S Roos, Chief Academic Officer, HULT International Business School

Inequality is a big theme. There is always going to be inequality in a competitive world, and a world without it is a utopia. Socialism and communism have tried to eradicate inequality and that just doesn’t work. George Orwell’s famous novel Animal Farm illustrates the fact that some people will always consider themselves more equal than others. 

Inequality is – to some extent – a driving force for societal progress and personal improvements. But we need to make sure that people can beat inequality and enhance their living conditions. The key thing is [to ensure] that the economy and social structures are dynamic, not static. People stuck in poverty or misery without opportunities to improve their lives makes inequality a very complex problem with no easy answer. The world is unfortunately full of examples of this. 

What can we do in higher education to help drive society towards the dynamic scenario rather than the static one? We can ensure that students and faculty talk openly about inequality and the problems it causes, but also about how everyone can gain equal opportunities to improve their lives. At the same time, we need to cultivate and protect one of the key success factors of successful business, economies and society; meritocracy. The challenge is that a meritocracy is inclusive, so that we all have a chance to compete and succeed based on our merits, regardless of how we look or how we chose to live our personal lives. An inclusive and ethical meritocracy should be a powerful driving force to making the world a better place. 

Business Schools should be reinforcing the idea that people must be able to work, progress, and live meaningful lives within society – within the moral and legal boundaries provided by institutions and the law, of course. To keep the topic hot, we should also make sure we can discuss existing knowledge about inequality, debate and develop new ideas, and encourage students and faculty to engage in the public debate. I often tell my faculty members that they have a responsibility to engage in public debate about things they understand and have views on. 

Donna M Rapaccioli, Dean, Gabelli School of Business, Fordham University

We must ensure that access to the highest quality of education is available to everyone. I am concerned that high-potential individuals who lack resources to fund their education are being guided into training programmes instead of educational institutions. 

While these training programmes provide a cost-effective opportunity to emerge from poverty, society needs more. To really impact income inequality in the long term, we need holistic education, which equips individuals with the knowledge and mindsets needed to reach the highest levels of organisations. We have to figure out how to enable all members of society to experience an education that prepares them for leadership.

One key point to be transparent about is the kind of School you are. Fordham is a Jesuit Catholic School; our mission is to educate compassionate global business leaders who will make positive societal change. That is how we present ourselves, so there is a predisposition in terms of the type of students who apply to our School. I believe that Schools have a responsibility to be truthful about who they are; if social justice is at the heart of your mission, you need to say that up front.

Clearly articulating your mission in your messaging is one way you can curate the composition of your student body. Once students are enrolled, they should experience your mission in their learning opportunities, the curriculum and co-curriculum, the cases assigned by faculty, and the speakers you invite. These will reinforce one another.

It’s not easy, but many Schools are realising that an holistic education, which thrives on a diverse, engaged learning environment, can be transformative. Many Schools are also now looking for activists and changemakers – you want them on your campus because you want that passion. The creativity and drive they bring will amplify your efforts at creating a truly dynamic learning environment that educates for leadership.

Chair 
Andrew Main Wilson, CEO, AMBA & BGA

Panellists
Sangeet Chowfla, President and CEO, Graduate Management Admission Council (GMAC)
Catherine Duggan, Dean, University of Cape Town Graduate School of Business
Donna M Rapaccioli, Dean, Gabelli School of Business, Fordham University
Johan S Roos, Chief Academic Officer, HULT International Business School

This article is adapted from one which originally appeared in Business Impact’s print magazine (edition: May 2022-July 2022)

How all businesses can play a role in the financial inclusion revolution

Business Impact: How all businesses can play a role in the financial inclusion revolution

When used in a socially responsible way, technology can revolutionise the way wealth flows, and just minor changes from business can help spark a big change, says fintech CEO, Narisa Chauvidul-Aw

The inexorable rise of fintech poses new questions about how we approach finance in the 2020s. Last year’s huge jump in investment into the field of 144%, from $53.9 billion USD to $131.4 billion USD marks the trend: venture capitalists are taking notice of the seemingly limitless potential.

How, then, can we leverage fintech to better serve the interests of communities, on a global scale rather than local? Connections are now made instantly, whether you are in Manila, New York or London. This can apply to transactions between new banks on the smartphones of users, in a world where fees don’t need to be so prohibitive and access to financial services is democratised. 

This isn’t limited to the ‘developing’ world at all. In the US, an estimated 7.1 million people were unbanked in 2019. Financial institutions often have fees, minimum deposit requirements and other upfront costs that create steep barriers to entry for people without much cash.

Small business can make a change

SMEs in the UK made up over 99% of all businesses in 2021; there were 5.6 million of them at the last count. Collectively, there is massive power in the decisions they make with their company in terms of consumer experience.

Wallet and QR code payments are fairly common in Asia but not in Europe — this is something that can change to the benefit of millions. It will take only minor costs and effort in order to make businesses more friendly to the unbanked – people, who in future can simply use an app.

The single biggest challenge is the glacial pace at which many firms respond to technological innovation. Business owners need to be receptive, openminded and willing to make minor changes to help spark a big change. It’s therefore vital that the process is so streamlined and straightforward to take up that it becomes illogical to resist.

We’re swiftly moving to a world where it’s so cheap and easy to move funds and make payments that fintech companies offering banking and financial services will be in prime position to revolutionise business transactions and cross-border transfers. SMEs will need to get on board to accelerate the process.

The role of technology

Nascent technologies, such as blockchain, AI and big data analytics, are integral to the modernisation of financial services. When it comes to business, B2B transactions can be simplified and peer to peer, similarly, will enjoy a boon to the ways we all use our money.

Digital currencies hold incredible potential to change the world. It’s easy to lose track amid speculation on cryptocurrencies dominating media headlines, with the public hearing about all-time highs on bitcoin and then subsequent market crashes wiping out investments.

At its core, digital currencies on the blockchain offer near-instant payments with low fees to anywhere in the world. Cutting the costs of money transfers could unlock $15 billion USD that is currently lost to middlemen when the approximately 250 million migrant workers choose to send money back to their families in their home countries. The upshot is plain to see – instead of lining the pockets of already-rich banks, there will be more funds available for those who use every last penny on sustaining themselves and building for a better future.

Technology when used in a socially responsible way can revolutionise the way wealth naturally flows. In a sense, money can become more democratic and financially empower the individual rather than corporate entities. 

Creating universal access

Fintech firms are rewriting the story of payments and banking in various ways. The mission to facilitate payments and offer simple money management for everyone is not just a noble cause, but an oft-neglected consumer demand across the globe.

Universal access to payment services is crucial to progress, both nationally and internationally, whether it’s sending money home, running a small business, or keeping control of finances in a trackable, non-cash manner. There are 1.7 billion adults worldwide who still don’t have access to a bank account because they are on a low income, move regularly as migrant workers, or have a poor credit history.

The inability to obtain a bank account creates more problems and exposes people to debt and risky transactions. These individuals are those most in need of secure money transfers: it cannot be reiterated enough that they are often sending money home to feed their families in the most basic yet vital utility of money.

Ethical, socially conscious fintech is therefore of paramount importance. Solutions for a mobile wallet combined with a digital bank account will reach into the neglected corners of the globe by providing financial services which make sense and carry a low barrier to entry for businesses as well as the public. Many people in the world own a smartphone, but they don’t always have access to banking which serves them better than cash does.

It will be a silent revolution

Already, we have seen financial transactions change because of the internet. Everything can be done online, even by mobile, and it’s all at the user’s fingertips. Today, many small businesses find it is far easier to reach a larger demographic online than offline.

In the future, helped by the use of Central Bank Digital Currencies (CBDCs) and internet and mobile banking, we will see the phasing out of physical bank branches with a drastically reduced need for cash. Digital money will replace physical money, but this will not change overnight.

The younger generation are well-acquainted with everything being placed in digital spaces. The older generations perhaps not, and their adjustment to new methods must be taken into account while fintech revolutionises payments and banking. Some countries, like Sweden, are already promoting cashless-only establishments and we can only expect this trend to continue.

While technologies such as blockchain ostensibly make transactions far more transparent — each payment lives immutably on a public chain — there is the issue of ethics in the companies that operate behind it. With innovative technology, it can also be easier to hide transactions or carry out money laundering.

Proper compliance will be a cornerstone of the new age of financial services. Onboarding customers to such platforms will require KYC/AML (know your customer/anti-money laundering) guidelines/policies to avoid becoming a vehicle for nefarious activities.

Institutional change will not arrive with a bang. Instead, people around the world will integrate new financial and banking services slowly into their lives with a significant material effect on their livelihood. This is the difference fintech can make, when applied in a socially responsible manner, to the lives of billions.

Narisa Chauvidul-Aw is the CEO and Founder of international mobile payment app, KogoPAY. She holds a PhD in accounting and information systems from the London School of Economics and Political Science (LSE) and has many years of experience working both in academia and business.

What it’s really like to be an executive at a startup – and how it’s different from being a director or manager

Business Impact: What it’s really like to be an executive at a startup – and how it’s different from being a director or manager

Is being a startup executive really that different from being a manager or director? Yes, but probably not in the ways you think, says the author of Lead Upwards, Sarah Brown

Prior to becoming a startup executive, my view into the role was limited. I saw how the ‘executives’ behaved in our one-on-one meetings and while presenting to our entire company during all-hands meetings. I noticed how they emailed, messaged, and comported themselves at the office. I observed how they spoke in our companies’ all-hands and how they behaved at holiday parties.

I watched them, as most startup employees do their leaders. (If you’re reading this, know that people are paying attention to your behaviour.) But my view wasn’t close to the full picture of what their roles demanded. At various companies I’d worked for, many of the executives’ calendars were fully booked in meetings so often I wondered how they got any work done. What were they doing during these blocks? Beyond their ‘busy-ness’, I wondered what that translated to in terms of what their jobs required on a day-to-day, weekly, or quarterly basis.

Inner workings of startup leadership are hard to see

Now that I’m an executive, I understand that the bulk of work done by an executive’s team is challenging to grasp as an individual contributor or even mid-level manager. While there’s been a movement to increase transparency across the startup ecosystem and more companies openly share their operating principles and salaries to their employees and even to the public, much of the inner workings of a startup leadership team are hard to see if you’re not a part of it.

‘The more senior you are, you execute less, and you have to be efficient with your time and need to empower your team to achieve your goals,’ says marketing executive Rachel Beisel. ‘You’re in a lot of meetings because you’re often the facilitator between departments and between employees in those departments.’

The reason that executives spend so much time in meetings is that decision-making is their most important responsibility. While startup leaders will always execute to some degree at earlier-stage companies (including the founders and CEO), their ability to strategise and decide is whythey exist at the company.

‘As a founder, I have decision fatigue,’ said AQUAOSO CEO and Co-Founder, Chris Peacock. ‘I expect my executives to constantly make good decisions in their areas, even in the absence of all of the data.’

Executives are charged with managing managers, meaning their direct reports generally have their own reports. This ‘skip level’ hierarchy requires executives to empower their reports to make good decisions and own theirareas.

The level of hands-on work you do as an executive will vary based on your startup’s stage and maturity. Early on in a startup, you’ll be spending more time on execution, doing things like shipping a new landing page, or editing copy, or creating financial models. These deliverables are a big part of how your success is measured early on. But as your company grows, you’ll need to delegate and manage other people who can do those things while you manage their productivity.

A week in the life of a startup executive

A sample startup executive’s schedule:

Daily

• Checking dashboards to view metrics and results measured against quarterly and/or yearly goals.

• Providing feedback to campaigns or other work products of teams within your team, usually at key milestones – early to verify direction (for example, this product roadmap change aligns to our strategy for the business/team) and ‘buy-off’ at final stages of delivery (yes, this press release has my seal of approval for publication, and my job is on the line if we screw it up).

• Cross-functional meetings with other executives or departments.

• Reading up on the latest news in your market or industry vertical.

• CEO syncs and department team meetings.

• Checking in on project management updates from your team on Slack, Asana, or another communication tool.

Weekly

• One-to-one with your direct reports; ensuring your reports and their reports are succeeding, and the team is tracking to Objectives and Key Results (OKR); troubleshooting any issues; and tracking their career goals.

• Weekly updates cross-functionally to other teams and your CEO.

• Measuring progress against OKRs.

• Feedback and/or signoff on key projects in your department.

Monthly

• One-to-ones with your direct reports; ensuring your reports and their reports are succeeding, and the team is tracking to OKRs; troubleshooting any issues.

• All-hands presentations to the entire company and/or business unit.

• Board updates.

• Updates to your CEO and/or cross-functional stakeholders.

Quarterly

• Reporting on a Quarterly Business Review (QBR) and/or Objectives and Key Results (OKRs).

• Evaluating strategic decisions weighing performance and/or new data.

• Board updates—deck, pre-read materials, and/or live presentation in a board meeting.

• Setting OKRs for the next quarter or half.

Annually

• Annual reviews and retrospectives, including reporting wins, failures, and what you’ve learned to your CEO, fellow executives, and the board.

• Annual planning, forecasting, headcount, and budgets.

• Financial models and planning – tracking CAC and LTV.

• Supporting fundraising efforts.

• Performance reviews for your teams and yourself (sometimes semi-annually).

Your daily, monthly, quarterly, and annual activities depend on the maturity of your department and company. Smaller startups may forgo annual planning and instead rely on quarterly planning cycles. You and your CEO may meet three times per week vs. once, so take the above with a grain of salt.

Other differences between non-executive and executive roles: accountability

Startup executives are accountable for delivering business results to company shareholders, including your co-founders, fellow executives, the board and investors (your founders’ bosses), and other employees. As an executive, you have the most ownership (which most likely includes equity) and accountability of anyone on your team. Unlike individual contributors or mid-level management, startup executives must build business strategies and execute them. Jennifer Rice, a leader at Pavilion,refers to the concept of building business opinions (vs. being an order-taker) as ‘having a theory of business’.

As a marketing executive, I am expected to form and communicate data-driven opinions on how to generate demand within target accounts to increase my startup’s market share and grow revenue. My CEO and cross-functional peers can help and my team will provide input, but, ultimately, I own and put my name on a plan. I need others to believe in the plan, but first I have to believe in it and champion it. When it succeeds or fails, I am the one who’s responsible. No one will hand these plans to us to go execute as startup leaders as they did when we were mid-level managers (although great ideas can and do come from anyone on the team). It’s on us to strategise and enable our teams to deliver results.

This is an edited extract from Lead Upwards: How Startup Joiners Can Impact New Ventures, Build Amazing Careers, and Inspire Great Teams by Sarah E Brown (Wiley, 2022).

Sarah E Brown is a mentor at the Techstars and Backstage Capital accelerators and the Founder of Flatirons Tech, a diversity- and inclusion-focused group from Boulder, Colorado in the US.

Innovating for success in business education

Business Impact: Innovating for success in business education

How should Business Schools harness learnings from the Covid-19 pandemic and position themselves in a digital landscape?

The world of business education looks very different to the way it looked at the beginning of the pandemic, with remote learning becoming a new normal.

Just like businesses, educational institutions have had to adapt in order to comply with lockdown restrictions, while maintaining a quality service. Although this has been challenging, Covid-19 has created opportunities for digital innovations within Business Schools and wider education.

Digital technology has played a vital role for faculty and students alike. Platforms such as Zoom and Teams have replaced the traditional classroom, and the tech industry has been quick to come up with solutions. From startups to multinationals, these companies are working to improve the world of online learning, developing education technology at a rapid pace. 

This gives Business Schools an opportunity to reflect on how innovations will affect the day-to-day delivery of teaching going into the future. It falls on Schools to continue to be flexible and to adapt to the post-Covid-19 world, taking the valuable skills and lessons learned and developing them further.

Adapting to the digital landscape

In a session at the AMBA & BGA Business School Summit 2022, a panel of experts pondered the future of Business Schools in the digital landscape, and discussed how leading Schools should position themselves in a changing environment.

Kicking off the conversation, Simone Hammer, Head of Marketing for Learning Experiences at Barco, commented that although ‘lots of organisations tried to “run faster” during the pandemic’ others took the opportunity ‘to step back and analyse, without getting exhausted. In saying that, innovation and creativity come out of urgency’, she pointed out.

Tiffany Monaco, Global Business Development and Innovation Leader at IKEA Retail (Ingka Group) highlighted the move to partnership working. ‘The world changed very quickly last year, but if we want to change the way we work by 2030, we need to take action now,’ she said. ‘This pandemic has also sparked a lot of collaboration. Boredom demands creativity, so in the past two years, I’ve had more collaboration and more creativity with my colleagues.’

Meanwhile, Miika Makitalo CEO of HappyOrNot, explained that, in his opinion, the pandemic has revolutionised the behaviours of consumers. ‘The pandemic gave us the opportunity to stop asking “what is the winning strategy?” We’ve been building a clear focus on what we’ve been doing and asking how we can add more value,’ Makitalo added.

‘By combining data and partnering with other organisations, we’ve explored things we’ve never experienced before. We had more time to think, more time to focus and more time to collaborate. In the marketplace, the ones that are innovating are winning.’

But Makitalo stressed that ‘there is great value in failure. Success is a terrible teacher. We have always had an upward trajectory of profit, which started to plateau, so we began to shift our way of thinking and boost innovation. I would say there’s always room for improvement in terms of how organisations approach failure, but having psychological safety and empowering people to be humble is really key. That mitigates risk. 

‘If you’re afraid to embrace your failure, you’re more inclined to hide it and this leads to a snowball effect. Instead leaders can create a culture of accountability; embracing failure; and moving on.’

Hammer advocates asking for help and nurturing a culture of trust. ‘Looking out for collaboration – next to failure – is really important’, she said. 

Maria Luciana Axente, Responsible AI & AI for Good Lead at PwC, concluded: ‘Finally something has happened that we’ve been predicting for a long time. For years, we’ve been preaching to our clients that they will have to digitise. Before the pandemic organisations could cover their lack of digitisation with people skills, but now there is a huge opportunity to develop digital infrastructure. 

‘In the uncertainty that will follow the pandemic we have an opportunity to optimise our processes. Digitisation can replace repetition and empower innovation. No innovation can be realised without infrastructure, and this allows us to make a sustained and profound impact.’ 

Chair
Simone Hammer, Head of Marketing, Learning Experiences, Barco

Panellists
Maria Luciana Axente, Responsible AI & AI for Good Lead, PwC
Tiffany Monaco, Global Business Development and Innovation Leader, IKEA Retail (Ingka Group)
Miika Makitalo CEO, HappyOrNot

This article is adapted from one which originally appeared in Ambition – the magazine of the Association of MBAs.

Six ways to dial down the ego and let humility lead the way

Business Impact: Six ways to dial down the ego and let humility lead the way

From exercising mindfulness and seeking feedback to nurturing a ‘servant leadership’ philosophy, Mike McLaughlin and Elaine Cox outline six ways in which leaders can moderate their ego and cultivate humility

It’s probably accurate to say that leaders who have no sense of awareness, who judge others negatively, and who never seek feedback cause considerable damage in an organisation.  And, although that damage may well be financial, it is almost always psychological. In Cy Wakeman’s 2017 book, No Ego, this damage is called the ‘ego-driven emotional waste’ that drains a team or organisation of time and energy.

In a leadership context, ego can be viewed as existing on a spectrum, with self-effacing behaviours at one end (potentially causing leaders to become invisible), and self-aggrandising behaviours at the other, which can truly stifle others. Both extremes are dangerous in their own ways.  Somewhere in the middle sits humility. Research led by David Wang at Biola University suggests that humility is important, particularly for leaders taking on more responsibility, since it involves self-awareness, being open to feedback and appreciating others’ contributions and strengths.

There are a number of strategies leaders can use to moderate or dial down their ‘ego presence’ and cultivate humility:

1. Reflect on where they are on the ‘humility scale’

The maxim that we can’t change what we don’t measure rings true here. To avoid falling into the habit of engaging in egotistical thinking and exhibiting egotistical behaviours, it can be useful to think of a scale of one to 10, where 10 is very high in egotism, and one equates to being overly submissive and self-effacing. Thinking about where we fit on that scale can greatly increase awareness and aid self-regulation.

While we may not always be able to shift from egotistical behaviour to humility in the middle of a single meeting, we can notice where our average position on the scale has been during particular days or over the course of a week. Time spent reflecting on our egotistical tendencies, as well as other aspects of development, is time well spent, and we advocate that leaders take regular time out for review.  

2. Exercise mindfulness

One of the main objectionable outputs of the egotist is judgmental thinking. In this regard, mindfulness is useful. It is described as paying attention on purpose, but without judgment, and although it has become something of a cliché recently, and is even shunned by some, focusing on the present through mindfulness brings benefits in terms of helping leaders become less judgemental. It also helps them gain clarity of thought, regulate emotions and reduce stress levels. Additionally, being mindful can assist ethical behaviours as it is when we are not mindful that our thoughts become polluted with worries and tactics, and we become pejorative.

Mindfulness takes time and practice. However, it is worth it because standing in judgement of others, seeing them as flawed, less than, inferior, or not as important, is dangerous territory for any leader.

3. Seek feedback

Feedback in its simplest form is data that provides information resulting in a change of course, or output. However, the thought of asking for feedback can often fill even experienced leaders with trepidation. This may be because the feedback process has previously been hijacked and used as a vehicle for attacks on character, rather than as a source of valuable information. Feedback is vitally important, and leaders who resist the feedback process are doing a disservice to everyone, especially themselves.

One way to make feedback more productive is to create an organisational environment that is truth-seeking and encourage feedback processes that focus on tangible behaviours or events. Facts should be separated from feelings and opinions to prevent feedback sessions plunging into an emotionally toxic maelstrom. Additionally, leaders should be receiving feedback. This not only helps them finetune their own activities, but also demonstrates to others that this is the cultural norm.

4. Lose yourself in flow

‘Flow’ is the state of becoming so engrossed in an activity that we lose all sense of time and ourselves. Worries, including those that are ego-driven, dissolve, and we become one with the task at hand, using our skills to explore or be immersed in something. Activities that provide opportunities to be in flow help us let go of any need to control people and realise our egos and our job titles are not important.

A 2019 article on Medium describes the value of being in flow and how it helps us become happier, healthier and less ego obsessed: flow, it describes, helps us ‘unwind, recalibrate, and tap into a higher state of mind above the mud of our ruminative ego chatter.’

5. Make sure you have critical friends

The importance of seeking feedback suggests that it is vitally important for leaders to have critical friends. Critical friends are usually people who have been known to the leader for some time and have a track record of transparency, trustworthiness and honesty. They have no political or competing agenda. Crucially however, they are not ‘yes people’.

Although the leader may not always agree with a critical friend’s point of view, that can be good since their role is to offer an honest perspective. In this way, they help us deflate the ‘ego balloon’. It should be remembered that a critical friend is not someone who is our critic, but someone who is critical to our success. 

6. Cultivate a ‘servant leadership’ philosophy

The leadership philosophy that most resonates with dialling down the ego and letting humility lead the way is ‘servant leadership’. This theory involves moving away from an opportunistic, or self-serving leadership style towards an emphasis on humility and the needs of followers. 

Additional characteristics of the servant leader include:

  • Understanding and accepting others as they are
  • Awareness
  • Building community and committing to the growth of others
  • Seeking to influence without the use of positional power

These are characteristics that are almost entirely absent when over-zealous egotistical psychology is at play. Above all, the egotist presumes knowledge and wants to show off, but the humble, servant leader has only questions in mind as they move from situation to situation. What might I learn here? Where can I find people who know more than I do? What do I need to understand before coming to any conclusions?

Mike McLaughlin (left) is the Founder of Braver Leadership.
Elaine Cox (right) is an Honorary Research Fellow and Senior Lecturer at Oxford Brookes University.

Mike McLaughlin and Elaine Cox are the co-authors of Braver Leaders in Action: Personal and Professional Development for Principled Leadership (Emerald Publishing, 2022).

How Business Schools can bridge the political divide: part II

Business Impact: how Business Schools can bridge the political divide

Business Schools can no longer afford to ignore the intimate interrelationship between business and politics – and they must go beyond layering ESG perspectives onto standard business thinking – says Joe Zammit-Lucia

From pressures to address environmental, social and governance (ESG) issues, to how we deal with climate change, to the rise of what some have called ‘political consumerism’, to the changing nature of globalisation due to new geopolitical tensions, political questions are increasingly integral to continued business success.

ESG modules are insufficient

Yet, layering ESG modules onto business-as-usual curricula, as many Schools do, is an insufficient response. ESG is but a part of the political aspects of business, aspects that go much deeper to reach the very way we conceptualise what business is all about.

If students go away believing that it’s ok to keep thinking how we’ve always thought, keep doing what we’ve always done, and that today’s context asks only that businesses are a little bit nicer about it and tick all the boxes around ESG, then these modules could end up doing more harm than good.

In today’s new era, businesses must accept that they are part of our panoply of political institutions and to become increasingly reflexive about their political roles. This requires a deep understanding of the political way of thinking and its incorporation into all aspects of business purpose, strategy and operations. Business School students need to be prepared for this new reality.

Politics drives performance

Let us look at some examples of how political thinking is driving business performance. When former US President, Donald Trump, slapped tariffs on imported steel, Harley-Davidson (Harley), an icon of US manufacturing, decided to shift some of its production out of the US – a business decision. US workers were going to lose their jobs. 

One worker, interviewed by the media during this process, understood that he might lose his job and was asked whether he thought Trump had made the wrong decision in imposing tariffs (the business view). His response surprised the TV interviewer. ‘Yes, I know I might lose my job. But it was still the right decision. We must stop others exploiting America through unfair competition.’ 

His ire, in as much as there was any, was reserved for management rather than Trump. At the time, the Financial Times also interviewed a number of Harley employees and, in June 2018, reported: ‘Many of Harley’s own employees, interviewed this week in the Financial Times, said they supported Mr Trump’s policies.’

Why? Getting back to our previous quote, from the University of Edinburgh’s Christina Boswell, politics is about, ‘tapping deep-rooted values and beliefs, rather than invoking objective self-interest’. Trump tapped those values whereas management might have imagined that the workforce would blame the President for a bad decision while considering their own decisions perfectly ‘rational’. A perfect example of the difference between thinking in narrow financial terms and thinking politically. What seems right from one perspective seems utterly mistaken from another.

In the Harley case, so-called ‘business-focused decisions’ went against the value system of its employees. In other cases, employees’ political views end up driving business decisions. In 2018, Google took itself out of the Maven contract with the US Department of Defense after a staff outcry against the company agreeing to let its AI technology be used for military purposes. Yet more politics. Dropping out of the contract put paid to potential future work that could have earned Google some $10 billion USD over a decade.

Earlier that year, employees at both Microsoft and Salesforce had protested against their companies’ work for US Immigration and Customs Enforcement (ICE) in opposition to President Trump’s policies that separated children from their parents. 

Microsoft CEO, Satya Nadella (an MBA alumnus of the University of Chicago Booth School of Business) issued a memo to employees with an explicitly political title: ‘My views on US immigration policy.’ In it, he denies that Microsoft was working on anything that related to the child separation policy. 

The memo opens with politics: ‘Like many of you, I am appalled at the abhorrent policy of separating immigrant children from their families at the southern border of the US.’ He went on to describe the government policy as ‘cruel and abusive’.

These are examples of a reactive approach to political issues. Managers are forced to address political questions related to their businesses because of employee pressures. Others react to investor pressure. Others still are finding that, in what has been described as a ‘politicised brandscape’, their customers are choosing brands based on the political meaning – is it ‘green’, does the supply chain use forced labour, is the company contributing to social wellbeing?

Some companies and brands have had political thinking embedded within them for some time, maybe it has even been the basis on which they were founded. Patagonia, for example, was founded on the basis of a love of the outdoors and the consequent environmental activism of its founder, Yvon Chouinard. Environmental politics is built into the company’s DNA.

Patagonia runs regular events in its stores, focused on environmental issues, and supports the production of activist films. It focuses obsessively on reducing its environmental footprint from how it manages its supply chains to a focus on the durability of its clothing to reduce over-purchasing and consequent waste and resource use – a stance that is, or at least was, nigh-on heretical in the fashion business. 

It has launched a programme called Worn Wear, encouraging its customers to buy used clothing rather than new and offering to fix worn clothing for nothing to discourage people from buying new. It ran an initiative that connected its customers to environmental groups. Patagonia has even refused to sell its clothing to corporations that do not prioritise the planet.

In 2017, when former President Trump decide to shrink the size of his predecessor President Barack Obama’s national monuments, Patagonia’s website was changed to feature an explicitly political statement upfront which declared ‘The President Stole Your Land’. During the 2020 US election campaign, Patagonia doubled down on its political assault on climate deniers by adding labels to a line of shorts stating, ‘Vote the Assholes Out’. The tagline was not new, but it had particular relevance during the 2020 election. Pictures of the hidden label went viral on social media and the politically labelled shorts sold out in no time.

These are only a few examples. From the geopolitics of operating in China, to the politics of climate change, to diversity, human rights, and many other issues, politics is becoming all pervasive.

How some Business Schools are adapting

In the era of the new political capitalism, Business Schools can no longer afford to ignore the intimate interrelationship between business and politics. Their duty is to prepare students for the reality of the world they will be operating in once they leave the sheltered world of academia. And some are stepping up.

Stockholm Business School and Copenhagen Business School offer courses on business and politics. HEC Paris has recently announced a collaboration with Sciences Po to bring expertise on geopolitics to its business teaching. Others are also moving in this direction.

To address the relationship between politics and business, Business Schools need to go beyond layering ESG perspectives onto standard business thinking. What is required is a wholesale re-think of how the very concepts of ‘business’ and ‘markets’ are looked at.

Markets, local or global, are political constructs, not economic or commercial constructs. This is because markets as we know them cannot operate without a set of rules that are politically determined and that chime with prevalent social mores. The fiction of the ‘free market’ must be banished from business teaching.

Similarly, the fundamentals of what a business is and what business is for also need to change. The shareholder value model is past its sell-by date. The role of business is, like all other institutions, to participate in the process of creating a better society. What that looks like is politically determined.

Politics, therefore, is not an optional add-on to standard business teaching much like, for some companies, going green is just a thin veneer layered onto business-as-usual. Politics needs to permeate every aspect of Business School curricula and give students a true picture of what the 21st century business environment looks like. Hint – it’s deeply political.

This is the second of a two-part series. For a fuller understanding of the roles of ‘politics’ and ‘business’ in our societies, please click here to read the first part of the series.

Joe Zammit-Lucia is the author of The New Political Capitalism (Bloomsbury, February 2022). Following an executive career in multinational business, he founded a management advisory firm with offices in Cambridge (UK), New York and Tokyo. On divestment, he co-founded the RADIX network of public policy think tanks.

This article is adapted from one which originally appeared in Business Impact’s print magazine (edition: February 2022-April 2022).

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