Exploring the future of globalisation

Business Schools must collaborate within a global partnership to help create a sustainable future for all, argues Steef van de Velde, Dean and Professor of Operations Management and Technology at Rotterdam School of Management, Erasmus University. Interview by David Woods-Hale and Jack Villanueva

At AMBA’s recent conference in Latin America, you presented on the future of globalisation. What did you cover? 

I shared a couple of stories about how to be a part of a global partnership. The world is globalising very fast. We all want to be international. So I shared a couple of case studies about how we started our international journey, what worked, what didn’t and what we needed to do to make it happen. 

You’ve joined the board of AMBA. How would you like to see the business education arena change for the better? 

I’m looking forward to doing my bit. What I’m hoping to bring to the table is the perspective of the continental European School. It’s important to bring in diversity. It’s important to have people of different backgrounds. 

What draws prospective MBAs to Rotterdam School of Management? 

It’s very international and diverse – 98% of the cohort is non-Dutch. Our mission – ‘to be a force for positive change’ – works very well.  It goes beyond sustainability and the UN’s Sustainable Development Goals (SDGs). I believe business is a force for change. More and more people are embracing this principle. We promise our students that by joining our MBA, they will be agents of positive change. 

What differentiates the Rotterdam MBA? 

It’s very hard for any School to have a genuinely unique element. We all claim to be unique. We all teach finance and marketing. But if you want to stand out, you need to do something different in the area of character building. We very much drive the importance of the SDGs. We tell our students business is not about making money for yourself, but creating a sustainable future for all. It’s about creating business models that do well but also do good. those values are very much alive in our part of the world. 

What are some of the innovative teaching methods you’ve come across? 

If you look at curricula all over Europe, the delivery format is changing. More and more of the teaching is being done in an experiential way. It’s not just listening to instructions – it’s learning by doing through living cases, field-work and assimilations. That’s basically what’s going on. Ideally, this would be done in diverse teams with people from all over the world. This gives students the opportunity to learn in a very fast pressure-cooker type way, but also with people from different backgrounds. 

How important is sustainability in terms of Business School course design? 

Sustainability is very important. However, we try to step away from using that word, because often the connotation is too narrow – environment or green issues. We’d rather talk about sustainable development and big societal challenges, which go way beyond this narrow interpretation of sustainability – and which make people nervous. 

The SDGs  talk about poverty, inequality, lack of employment, lack of infrastructure, climate change and much more. In our School we avoid ‘sustainability’ and talk about SDGs.

In light of that, what does a sustainable leader look like to you? 

We use the word ‘responsible’ rather than ‘sustainable’ and this means people have a very broad eye on what’s going on in the world; you manage a style of company that goes beyond making money for you and your family, but contributes to a better world. We try to encourage our students and graduates to contribute to a better world and be a force for positive change. 

In your personal and professional life, you’ve worked all over the world. How do you instil this international mindset in your students? 

We do this by recruiting people with different backgrounds from all over the world, in all our programmes, and by creating an international atmosphere. We create opportunities for people to work with others with different experiences. We also recruit faculty from all over the world and who will go places with their students. Our students travel all over the world and therefore are exposed to the global mindsets. 

How can MBAs turn theory into practice in the working world? 

People have to do something experiential. We stimulate students to set up their own businesses, often in the area of social business. 

You’re looking for students who can deliver on a global scale. Should students look at local economies first and work up – or take a top-down approach? 

To me, it’s very clear: people bring local experience but they have to do something with global impact. 

Collaboration is vital in uncertain climates. How is your School building links with other Schools, employers and alumni? 

We’re international through strategy and sheer luck. We’re members of leading groups and our Triple Crown accreditation gives us access to very strong international networks, in which we can discuss new initiatives and programmes. This collaboration for us is key to stay ahead of the competition. 

I’m using the word ‘competition’ but some of the Schools we’re ‘competing’ with in the same market are also the Schools with which we want to collaborate. 

What are the challenges that Business Schools face? 

There are quite a few challenges facing us. First, funding: we’re mainly a public university, so funding goes down year after year; one way or another you have to absorb that. At the same time, all Schools want to be international and we’re after the same faculty and students, so competition is getting fiercer. Faculty management and retention is a big challenge for most Schools. 

What would your advice be to other Business School leaders operating in this volatile and uncertain world? 

Over the years, I learned something that surprised me: the importance of having a compelling mission. Up until three years ago, I thought no one cared about mission. Then we worked on a new mission. To my surprise, this has released an enormous amount of energy and passion. 

Mission, to my mind, is nothing else but common purpose. Everyone wants a purpose in life. If you have a purpose you can rally everyone behind it and then it’s a lot easier to change things as they all understand what you want to achieve. 

Our new mission has had an impact on our School, students, faculty staff and also external stakeholders. It has served us very well so far. I’d urge Business School leaders to define their mission and purpose; once they do, things will become a lot easier. 

How can a Business School add value to a corporate employer with which it’s working? 

A Business School is all about delivering talent to the job market, so as a Business School you need to stay on top of what exactly the market requires. It’s changing very fast and teaching is moving away from accounting and finance towards business analytics. Business Schools have to follow the trends, there’s no way around it, and you have to stay in contact with companies. 

What’s your level of optimism about business, Business Schools and the economy? 

On a scale of one to 100, it’s very close to 100. I’m an optimist by nature, in spite of all the uncertainty in the world – especially around politics. I truly believe in the EU and this has worked well in Europe. 

Steef van de Velde is a Professor of Operations Management and Technology and the Dean of Rotterdam School of Management, Erasmus University (RSM). 

The field of change

Nino Zambadhikze, MBA graduate and Head of the Georgian Farmers Association, talks about her career journey, current goals and the need for greater investment in women in business

Nino Zambadhikze, Head of the Georgian Farmers Association, completed her MBA at Grenoble École Management in 2016 and was selected by the World Economic Forum as one of the most innovative and social-minded leaders under 40. In an interview with David Woods-Hale, she talks about her career journey, her current goals and the need for greater investment in women in business.

Tell us about your career so far

Shortly after I graduated from the Humanitarian-Technical Faculty at Tbilisi Technical University, I went to New York to further my studies and took up a course in marketing.

I decided to launch my first business in the US. I took out a bank loan to buy up GAP jeans and send them to Georgia where my father’s friend was selling them in his shop. However, my father’s friend vanished, and I discovered there was no shop. This was my first failure.

I also recall becoming angry with my country. But I knew that if you jumped on a plane and flew just a few hours, an absolutely different life awaited. This was the biggest motivating factor in becoming an entrepreneur. 

After returning to Georgia, I still had to pay back the $20,000 loan I had in the US. My family had to sell everything in order to pay the money. These hard times lasted for almost a year, but in 1998, I started working as an interpreter for a Greek businessman operating in Georgia. I learned a lot from my employer; however, problems quickly arose as the businessman was forced to leave Georgia.

I found a job at an audit company in Tbilisi, where I met Beso Babunashvili, my eventual business partner. We started to export non-ferrous metals from Georgia and also opened a coffee house. In 2005, we launched the first three take-away coffee booths in Tbilisi.

One day in 2007, Beso went to Akhaltsikhe and bought two cows. This led us to launch a cheese production business. We submitted an application to the Millennium Challenge project and received US$125,000 in funding. Then I moved from Tbilisi to Akhaltsikhe and opened a farm. We created an agricultural company which is mostly in the milk-processing business, as well as animal-husbandry and food processing.

What does a typical day at the Georgian Business Zone look like for you?

I had already started my work with the Georgian Business Zone when I met Petre Tsiskarishvili, the Minister of Agriculture at that time. I told him I wanted to buy highly productive cows and start producing cheese. With the funds from the Millennium Challenge Corporation, we started to build a milk-processing plant. The only problem was that we couldn’t find a technician with modern knowledge in milk processing and cheese production. So I travelled to Turkey to study the profession, and also became a food safety manager. 

When September came, the cows stopped producing milk. I thought the cattle needed fodder, so I took out another loan to build a fodder-producing plant. But it turned out that the problem was due to the genetics of the cows. We eventually built our farm with the help of the Cheap Credit Programme and now produce 400kg of cheese daily. We have 100 cows, 70 hectares of agricultural land, 300 hectares of pasture fields, a five-hectare apple orchard, and a fish farm too.

Mornings start very early in Tsnisi. After breakfast, I start to make the rounds at my businesses. After that, I go to my office where I take care of clerical tasks. In the evenings, I visit my friends and we drink coffee and talk. Days are long travelling from Akhaltsikhe to Tbilisi and back.

Tell us about your involvement with Invest For The Future (IFTF)

I am an Honourable Country Coordinator of IFTF for Georgia, Armenia, Azerbaijan, Turkey and Greece. IFTF was designed to focus on improving the economic situation for women across Southern and Eastern Europe and Eurasia, and was initiated by the US Department of State. The IFTF brought women together to foster development and overcome barriers of gender inequality. I believe that while women are doing a lot of work, they are not being recognised properly.

Women’s talent needs to be discovered. At the Farmer’s Association, we feature stories about new projects on our Facebook page, and magazines also feature stories about our members. I think increasing their visibility will increase their sense of responsibility, which will result in their success. This is important because women’s participation in business helps economic growth, but it’s being overlooked in the region.

Furthermore, employed women are predominantly in low-paying sectors and the gender pay gap is high. I believe this can be changed by promoting women’s entrepreneurship by boosting access to finance for female-led businesses, improving local banks’ ability to serve the female market and help female entrepreneurs’ access business advice.

What were the highlights of your MBA and how has it changed your career trajectory?

I believe there are three key components for success: take risks, have willpower and, to some to extent, consider every failure a success. My MBA taught me how to use theoretical knowledge, how to learn from my mistakes, the importance of time management, and how to achieve my goals.

My goals include increasing agricultural productivity, defending farmers’ rights, developing legislative proposals in the field of agriculture, and strengthening farmers’ social and economic conditions. My MBA can help me to achieve these goals.

As for how my MBA changed my career trajectory, I started watching out for opportunities which come with the constantly changing business environment. This made me more self-confident and a more competitive businesswoman.

What was the most useful thing your MBA taught you?

The most important skills you can acquire in Business School are the abilities to adapt, make the right decisions, become a real leader, and learn how to be a good in business. I reached a new level of confidence in my ability to make a decision with limited information. I learned that the difference between a great idea and great change is in the execution, but the person who comes up with a great idea is just as important.

The MBA is a pathway to global leadership – how do you address the cultural challenges?

As cross-cultural management compares organisational behaviour across countries and cultures and seeks to understand how to improve interaction around the world, I want to reduce the cross-cultural differences and raise awareness of these, in order to have better communication and cooperation in the workplace. To do this, employees have to know each other’s cultures and languages. This keeps employees integrated within the organisation so they cooperate with each other and attain shared goals.

It’s necessary to recognise different business cultures across the globe too. Every country follows a different management style and so managers have to take into consideration the key elements of each country, such as its religion and history.

How do you ensure your messages get to the right people in a volatile, uncertain, complex and ambiguous environment?

In a fast-moving world, the challenge is to retain a clear vision of what you want to achieve. This vision should be flexible in responding to unfolding situations but hold a consistent message. This means you need to be ready for change. Change is about survival but is especially necessary in organisations that wish to prosper in a VUCA environment.

Therefore, the question is what you are going to do to initiate change? What role are you going to assume? If you play the right role, then you and your organisation will survive for as long as the environment tolerates that role. A successful leader knows which role to play at what time, and knows when to change roles.

As people communicate in different ways, marketplaces are becoming busier and silos develop. How would you address this in business?

Execution of a project is the result of thousands of decisions made every day by top management. However, the right decision is one that can guarantee a long stay in the marketplace by ensuring maximum satisfaction of the consumer’s demands.

Organisations need to concentrate on quality, not on quantity, share technological achievements, and keep up with innovations and development. This way, they will gain the consumer’s confidence and become a competitive company in the world market.

What should responsible [and sustainable] leadership look like?

Sustainable leadership is about leading an organisation towards sustainable development, implementing socially responsible methods and acknowledging a shared responsibility for preventing the use of unjustified financial and human resources, and the violation of the environment. A good leader should involve employees in the company’s decision-making processes. 

Sustainability is moving to the core of business strategy. What are the skills you’d look for in your team of the future?

It’s important to have friendly team where everyone has equal opportunities for development. It’s crucial to have team members who express their thoughts and ideas clearly, directly, honestly, and respectfully. Reliable team members are an important asset for any team, because they get work done. Also, good team players are active participants, fully engaged in the work of the team. They’re open to sharing their information, knowledge, and experience. 

A good manager knows the most valuable asset is the team. Sustainable business is created when each employee considers themselves part of the company. This means employees can work together to solve problems. They respond to requests for assistance and take the initiative to offer help.

What would your advice be to MBA students and graduates?

Make best use of this time, and gain theoretical knowledge and information about practical issues. Be results orientated and make an effort to achieve success in your career. Also, it’s important to ask questions until there are no more answers. After finishing each module during my MBA, I thought ‘that’s enough’, but that was exactly the time to move forward. Knowledge is the biggest investment you can have, and the practice is the most solid foundation. 

Do you think Business Schools and employers have sufficiently strong links?

Business Schools and employers have links, but it’s not enough. We all know how it should be but it doesn’t happen in real life. Business Schools have to keep up with modern trends and adapt their programmes to the latest innovations. I think it’s very important for Business Schools to be focused on giving their students more theoretical knowledge based on interesting and practical real cases. Obvious mismatches between Business Schools and employers occur when the Business School does not take into account the changing business environment. Also, when businesses are less involved with MBA programmes, their expectations for future employees’ skills are inadequate.  

As a successful female leader, what would your advice be to other aspiring women?

Never give up, never be afraid of the risk and don’t be afraid to make a mistake. 

I know the challenges women face every day because they’re ‘the weaker sex’. To achieve equality, we need more education, more support, more female involvement at governmental and non-governmental levels, and more women in leading positions. Especially, in terms of business, I would like women to have more educational programmes, more grants for projects, and more empathy from financial institutions.

Do you feel optimistic about the future of business and the global economy?

Yes, business is not just a way to gain money but a way to impose social responsibility and care about environmental problems. 

Businesses need to do this to stay in the world market, and make a financial profit in the long term. 

Enhancing social innovation in Africa

With Africa’s population projected to grow to 2.4 billion by 2050, there is an urgent need for the emergence of more social innovators, operating at scale, to address pressing problems in sectors from education and healthcare to employment and housing, writes Ndidi Okonkwo Nwuneli

Oiginally labelled the ‘dark continent’ and largely unknown to the rest of the world, Africa is now being described as the ‘last frontier’. 

Following decades of slow and uneven economic growth, the average growth rate across African countries is estimated at 5%, and more than two-thirds of the countries in the region have enjoyed 10 or more years of uninterrupted growth. 

The majority of the countries are recognised as democracies and internal and cross-border strife has diminished significantly. An average African woman’s life expectancy rate has risen from 41 in 1960 to 57 years in 2017, and more than 70% of children are in school, compared to around 40% in 1970. Many of these advances can be linked to the work of a growing number of passionate and committed social innovators: individuals who have identified novel solutions to the continent’s most pressing problems that are affecting the masses. These innovators operate in the public, private and non-profit sectors and are concentrated in the health, education and energy landscapes, with a growing number emerging in financial services, agriculture and sanitation. 

Their work is being propelled by the rapid advances in mobile technology, which facilitates mobile health, mobile education, payment systems and mobile money. In addition, they are gradually being supported by a range of initiatives including innovation accelerators, hubs, prizes, and fellowships. 

The most popular Africa-based social enterprises include the African Leadership Academy and African Leadership University, Ashesi University, Bridge International Academies, One Acre Fund, Riders for Health and Sanergy. These organisations have received numerous local and global awards and prizes for their pioneering efforts, and have strong links to the international community, which has provided funding and support for their work. 

There is also a growing number of organisations operating on the African Continent, which are essentially home-grown initiatives with minimal global recognition. They include:

  • Action Health Incorporated established by Dr Uwem and Nike Esiet in 1999, to address the rising incidence of HIV / AIDS and teenage pregnancies in Lagos, Nigeria. Over a 10-year period, they designed and introduced sexuality and reproductive health curricula into public schools, fighting against the odds in a deeply religious society. Today, this curricula and its delivery has been adopted across the majority of the public schools in the country, and have played a key role in reducing HIV/AIDs and teenage pregnancies.
  • CLEEN Foundation founded by Innocent Chukwuma, was established in 1998 to address rising crime rates in Nigeria’s major cities and create bridges between the police and citizens. Faced with stiff resistance from both sides of the divide from the onset, CLEEN worked with the Nigerian Police Force to revive and strengthen its internal accountability mechanisms such as the Police Public Complaints Bureau (PCB) in six Nigerian states. It also encouraged the police force to make its processes open and transparent, which ultimately exposed the gross misconduct of many police officers, leading to the dismissal of more than 5,000.
  • IkamvaYouth in South Africa was established in 2003 by Joy Olivier and Makhosi Gogwana. The organisation equips students in grades 9, 10 and 11, from disadvantaged communities, with the knowledge, skills, networks and resources to access tertiary education and / or employment opportunities. These ‘learners’ eventually become volunteers and ultimately continue the cycle of giving back to the next generation of ‘learners’. IkamvaYouth operates in the Western Cape, Gauteng, KwaZulu-Natal, North West, and the Eastern Cape, reaching thousands of young people.
  • The Ethiopia Commodity Exchange (ECX), was initiated in 2008 as a marketplace or platform that facilitates the trading of agricultural produce between buyers and sellers. It provides transparent price information for both farmers and buyers, and protects both farmers and traders from price drops and price hikes, respectively. ECX harnesses innovation, technology, and storage infrastructures to mobilise products from smallholder farmers and ensures product quality, delivery, and payment.

Challenges faced by social innovators

Social innovators operating on the African continent face challenges that are not unique to Africa, but are often more severe, with higher stakes. My interviews with more than 80 African social innovators have raised four critical shared challenges:

  • lack of credible data for local communities, countries, and regions, which slows down the processes for planning, piloting, and scaling social innovations and hinders the ability of key stakeholders to measure their impact on society. 
  • heterogeneity within and across countries, which includes significant diversity in colonial histories, language, religion, culture, community assets, and social development, essentially means that there is ‘no single story’. Innovations must be tweaked or significantly altered to enable scaling from one community to another, which is not only more expensive, but also slows the scaling process. 
  • fragmented ecosystems, in almost every sector, especially the agricultural, education and health landscapes, limit the ability of innovators to reach large numbers of people in record time. Consider the agriculture sector, where 85% of arable land in Africa is cultivated by farmers with less than two hectares. This essentially means that any intervention that wants to scale up in this sector can only do so by working with farmer clusters as opposed to individual farmers. The process of creating clusters of farmers, hospitals, schools, small and medium-sized enterprises, and other sectors, and building trust among
  • these groups, takes time and requires financial resources. 
  • significant talent, infrastructure and financing gaps which limit scaling. For example, only one-third of Africans living in rural areas are within two kilometres of an all-season road, compared with two-thirds of the population in other developing regions. This, in turn, makes it extremely difficult and expensive to extend healthcare, education, and agriculture innovations to communities in rural areas. Sadly, with underdeveloped distribution and marketing systems, social innovators essentially work along all aspects of the value chain, filling gaps that ordinarily would not exist in other markets to reach people.

Prerequisites for success

All social innovators need to invest in critical building blocks for success – rooted in sound management principles: clear missions, visions, and values. However, there are at least four prerequisites to establishing successful social innovations in the African context which deserve significant attention.

1 Compelling business models: Social innovators need to develop compelling business models, defined by six critical components: demand driven, measurable impact, simple, engages the community, leverages technology and low-cost. These six components differentiate initiatives which die at the pilot phase or when the donor funding ends, from initiatives that are sustainable and able to achieve scale, spanning communities and even countries. Innovations that are demand driven essentially meet the needs of individuals, who value the product or service and are willing to contribute their time and financial resources, regardless of how minimal, to obtain them. In addition, the innovators have determined the most cost-effective approaches to deliver at scale and developed effective systems and structures to support their scaling effort. They often use simple payment mechanisms using mobile technology and support from microfinance partners, where applicable. These tools are highly dependent on a robust data – tracking system to gauge impact and usage. Two examples from the energy sector that demonstrate the power of demand-driven and sustainable business models are M-KOPA Solar and Off Grid Electric, which both operate in East Africa. They provide solar solutions to more than 550,000 households using a pay-as-you go model, and have demonstrated the tremendous potential at the bottom of pyramid

2 Talent for scaling: Talent on the African Continent remains a huge constraint for all growth sectors given the weak education systems and the global opportunities that are available to the best and brightest. As a result, every social innovator needs to invest in attracting and retaining a dream team composed of mission-driven high achievers. They also need to invest in recruiting a committed and independent board of directors, and engage volunteers, short-term consultants, and fellows. Organisations such as EDUCATE! In Uganda and Sanergy in Kenya, have designed and implemented creative strategies for attracting, retaining, and developing talent. They have also invested in building a culture of innovation and excellence, which attracts individuals from the private sector to their organisations. 

They offer tailored training programmes, travel fellowships and significant job responsibilities for their team members and have also developed modular approaches for scaling talent. 

3 Funding for Innovation: There is a broad range of financing options available to social innovators in Africa, depending on whether they operate for-profit, nonprofit or hybrid organisations. These financing options range from fee-for-service and cross subsidisation to externally generated funds such as grants, awards, fellowships, challenge funds, crowdfunding, impact investments and loans. In addition, the funding landscape, especially for impact investments, has expanded dramatically over the past 10 years, with cities such as Nairobi hosting more than 60 impact investment funds and other investment vehicles, where only a few existed 15 years ago. In-spite of the plethora of funds, most local social innovators struggle to obtain financing for their ventures, while funders complain that they cannot find initiatives that are investment ready. Indeed, external funders are only interested in engaging with organisations that have strong credibility, governance structures, financial management systems and controls and can demonstrate the ability to use the funds to achieve results.

Social innovators operating in Africa have obtained financing work diligently to establish and communicate a strong business case and theory of change, backed by sound data that establishes a clear need and sustainable demand. They also amplify their impact work through creative communication strategies to raise broad-based awareness and effectively differentiate themselves. In addition, they demonstrate strong transparent systems and structures, a culture of ethics and accountability, attractive return on investment ratios and exit options for impact investors, where applicable.

4 Partnerships with key stakeholders in the public, private and nonprofit sectors: Social innovators cannot achieve impact and scale without cross-sector collaborations, rooted in shared values and a desire to achieve collective impact. This is especially relevant in highly regulated sectors such as health and education.

Sadly, there are few examples of partnerships in the African context, largely linked to significant distrust among actors, the intense competition for the perceived ‘small pie’ of resources and support structures and the fear of giving up control. Partnerships are also challenging in an environment where there is a high level of bureaucracy and red tape within government institutions which ordinarily should serve as catalysts for collaborations and innovations. In reality, social innovators who successfully collaborate in this context, actively map the ‘ecosystem’, determining which stakeholders can serve as champions, opponents or even beneficiaries. They then develop strategies for interfacing with all key actors, proactively shaping their ecosystems and forming strategic cross-sector collaborations that foster impact and scaling.

Preparing for The future

With Africa’s population projected to grow to 2.4 billion by 2050 – more than 70% under the age of 30 years old, with 60% in cities and towns – there is an increasing need for the emergence of more social innovators, operating at scale. These individuals will essentially need to develop creative and innovative solutions in education, healthcare, employment, sanitation, security, electricity, transportation, and housing to meet the needs of the people.

The social innovators will need also need critical leadership and management skills, as well as the talent, financing and partnerships required to surmount the obstacles they will face to pilot and scale interventions.

Indeed, Business Schools in Africa and around the globe will have to play a critical role in preparing this next generation of social entrepreneurs and innovators. 

The Bertha Centre for Social Entrepreneurship at the University of Cape Town is just one example of the numerous institutions in Africa and across the globe that are working to inspire, empower, and equip the social innovators.

I am convinced that the ability of more social innovators to pilot, establish and scale their initiatives to solve Africa’s most pressing problems will transform the continent and continue to ensure that Africa progresses from the last frontier to the brightest continent over the next decade.

Ndidi Okonkwo Nwuneli, Harvard MBA 1999; Wharton Undergrad 1995 is a serial social entrepreneur based in Lagos Nigeria. She is the founder of LEAP Africa – www.leapafrica.org, co-founder of AACE Foods Processing & Distribution Ltd. – www.aacefoods.com and co-founder of Sahel Consulting & Advisory Ltd – www.sahelcp.com. She is the author of – Social Innovation in Africa: A Practical Guide for Scaling Impact, published by Routledge in 2016.

Broadening students’ cultural experience

Josep Franch, Dean of ESADE Business School, Barcelona, discusses current differences between Spanish Business Schools and those in Latin America and the opportunities for Latin American Schools to attract more international students. Interview by Andrew Main Wilson

Considering the landscape of the top Spanish Business Schools compared to Latin America, what are your main observations of the differences and the similarities?

I would say that European Business Schools in general, and Spanish Schools in particular, have made significant improvements over the past 10 to 15 years. 

If you take, for example, the Financial Times Global MBA Ranking, in 2000 it was made up of 80% US Schools and 20% European Schools. If you consider the same ranking today, you’ll find 40% US schools, one third European Schools and 20% Asian Schools. 

This improvement didn’t come overnight. It started in the late 1980s and early 1990s, when European Schools began to internationalise. They started to change their reputation to attract international students and faculty. This happened 25-30 years ago and, as a result, the majority of European Schools today are probably at the forefront of internationalisation. 

When I consider Latin America, I still see it as regionally based, attracting regional talent, whereas at the majority of European Business Schools – and in the case of top Spanish Schools – we’re attracting students from all over the world in our MBA. 

We have 30% of students coming from Latin America, 30% from Asia, 25% from Europe and 15% from North America, so it’s a broad profile.

What do you think Latin American Business Schools need to do to attract more students from Spain and Portugal? 

Spain has, traditionally, been seen as the gateway to Europe for many Latin American Schools and countries. But at the same time [as a Latin American School] you need a focus on quality. 

International accreditations are the first step, but you also need to establish your brand. This can be done through publications of your key faculty who can produce and publish research in top journals. 

You need also to be relevant in the corporate world. Here, I believe Latin America has a great opportunity, with corporates coming from the regions expanding abroad. A number of [global multinationals] are seeing opportunities in Latin America. 

At ESADE, some students from Europe or Asia take our MBA because they see it as a gateway to Latin America. 

In a global world, there are lots of opportunities, but [success] doesn’t come overnight. It’s based on years of investment, publications, visiting companies, attracting people and placing graduates in
those companies. 

At the end of the day, your graduates and alumni are your best ambassadors. 

Do you think blended and online learning this will be the next step for Schools in Latin America, and will it be a struggle, in terms of investment? 

We’re all facing the same huge challenge. But, at the same time, it’s a huge opportunity. You can develop e-learning programmes anytime and anywhere, so the online revolution allows physical boundaries to disappear. I don’t see a difference between Latin American Business Schools and Schools in other parts of the world, in the sense that blended programmes are not a choice. A blended solution is something you need. It’s a percentage of your curriculum, but all programmes have to be blended. Fully-online degrees are a different issue. Schools across the world are discussing the next steps. How fast they’ll be able to go depends on how many resources they have and how fast a School moves. 

It also depends on how many risks they’re willing to take, because those that move first will bear the greatest risk. Other Schools will be playing the safe route of jumping on the bandwagon, but they’ll not be the first mover. In saying that, top Latin American Schools are coping well with, and addressing this challenge. 

You have partnerships with Schools in Chile, Colombia and Peru. What advice would you give Latin American Schools in building partnerships in Europe? 

We have a joint multinational MBA with Adolfo Ibáñez University in Santiago, Chile, and a double degree with Fundacao Getulio Vargas EAESP in Sao Paulo, Brazil. We are working with Universidad de los Andes in Colombia and Universidad del Pacifico in Peru. In Rio de Janeiro, we’re working with Fundacao Getulio Vargas on some executive education programmes. We’re working with some other universities in the region as well. 

I believe these partnerships are going to grow because they allow Business Schools to combine resources, areas of expertise and the footprint of the different partners in the same programmes. 

Partnerships also allow Schools to launch programmes that maybe they wouldn’t have launched on their own because of [limitations in terms of] size, capability, or lack of influence that they have in a
certain market. 

These partnerships are a good thing, but Business Schools have to be able to find a suitable partner. To me, one of the most important things is that you share the same approach and philosophy. A partnership is like a marriage. When you’re dating, you need to know the person and share
some things. Partnerships based on economic or financial factors are probably not the best partnerships, if you don’t share a vision, values, or if you don’t have the same ideas in terms of the programme and the education proposal for the Business community. 

What would you advise our Schools to do to encourage more Spanish and Portuguese-speaking European students to come and experience a Latin American School? 

Students have different ideas and motivations to go on exchange programmes. I’ve found very often that we might have Spanish students who prioritise going to the US or Asia because they see them as ‘cool’ destinations, rather than opting to go to Latin America. 

Sometimes, students assume – mistakenly in my opinion – that in the majority of Latin American countries, because the same language is spoken there, they cannot improve in a second language, but they can if they go to the US or another destination. 

It’s not just about the language, but also the cultural experience. If we share the same language or similar language, students can still learn different ways of doing business compared to Spain in terms of how international markets are evolving. There are fast-growing markets in Latin America with lots of opportunities. 

Some students want to go to Latin America because they want to pursue an international career and want to spend some years in that region because they will have lots of opportunities to develop themselves. We [as Business School leaders] need to keep insisting that there are plenty of opportunities [in Latin America] that students are failing to identify because they’re looking for the big names of American universities, that are attracting them to a place – rather than what they can learn.  

Josep Franch, Dean of ESADE Business School

Josep Franch has extensive teaching experience in various countries. He is an expert in international marketing and global marketing, and his main area of specialisation is brand management in multinational and global companies. He has also worked on subjects related to digital marketing and relationship marketing. 

From an educational point of view, he is one of the main European experts in the case study method. He has published more than 50 case studies in the fields of marketing and international business, some of which are available through the The Case Centre (formerly the European Case Clearing House). 

He has won the EFMD Case Writing Competition on three occasions (1999, 2001 and 2013) and also has three case writing awards at the North American Case Research Association (NACRA) Annual Conference (2004, 2010 and 2015). He regularly serves as a track chair in several case conferences and as a reviewer for different case journals and case collections, he sits on the Editorial Board of the Case Research Journal and Wine Business Case Research Journal and is one of the Co-Editors of the
Global Jesuit Case Series. He regularly delivers sessions on how to write and teach with case studies, both at
ESADE as well as for other programmes including the International Teachers Programme (ITP).

He has previous experience as marketing manager at Fuji Film and has worked as a consultant for different companies, including FC Barcelona, Interroll, Novartis, Soler & Palau, Sony and Xerox. 

He has also worked in many in-company training programmes with different companies including APM Terminals, Bunge, Desigual, Esteve, Novartis, Roca, Roland DG, Saint-Gobain, Sony, Telefónica and Tenaris.

Exploring the digital marketing revolution

To create and communicate superior customer value, marketers must now combine traditional advertising with social and digital tools, argues American marketing guru Philip Kotler, in an interview with David Woods-Hale

You’ve written Marketing 4.0? What has changed since Marketing 3.0 was published in 2010?

Marketing is undergoing a digital revolution. We published Marketing 3.0 seven years ago to help companies broaden their view of how computers and the internet impact marketing theory and practice. We stressed the importance of meeting the needs of women, young people, and ‘netizens’ in carrying out company marketing activities. 

Today there is a need to pay attention to the growing role of social and digital media. Social media – such as Facebook, Instagram, Pinterest and Snapchat – create an increasingly connected world and they stimulate greater communications and sales to a wider world. Digital media is enabling artificial intelligence (AI) and the ‘internet of things’ (I0T) and increasing the rate at which robotisation and automation is penetrating business. Our aim in Marketing 4.0 is to illustrate the growing role and impact of digital marketing. I’ve also described this ‘new marketing’ in my 15th edition of Marketing Management

How can Marketing 4.0 help in bringing marketers up to date with the current skills required – from traditional to digital?

In the past, consumers made purchase decisions largely in retail outlets, whether in an auto dealership or in a large department store. Some consumers also used the telephone or mail order catalogues. Today, a growing number of consumers are making more of their purchases online via online retailers. In-store retailing is facing a major decline: witness, in the US, the news of Macy’s closing many stores, clothing store The Limited going out of business and shopping centres in deep trouble. 

Consumers still go into stores to sample and touch the product and then use their smartphone to see if they can a better deal elsewhere. Many retail shops are evolving into ‘showrooms’, partly charged by the company to its advertising budget. Business-to-business transactions are being increasingly conducted with digital media. Most companies list their product catalogues on the internet. Purchasing agents are happy to compare prices on the internet and are less interested in accepting sales calls. All this points to the need for companies to acquire social and digital skills before they are outclassed by more sophisticated digital competitors.

You describe ‘shifting power dynamics’ in the market. Can you explain this in more detail? 

Power has been shifting from the advertising giants who used 30-second commercials to inform and persuade consumers, to savvy consumers – who rely on their friends and acquaintances, plus online product ratings, to make their brand choices. Power has moved from companies to consumers. Companies must now develop fresh pictures of how consumers journey toward making their final purchases. It’s no longer a journey from a 30-second commercial to a purchase but from a stimulus on the internet, or from a friend, to a search for further information, to a purchase. Marketing 4.0 discusses the key steps in consumer journeys and the various touch points that will have an impact on the final purchase decision.

You explain how the rules of marketing regularly change, but this time the very customers have changed – and this is revolutionary – can you talk a bit more about this?

The basic maxim of marketing hasn’t changed. Decide on the consumer need your company wants to meet and the individuals who strongly have this need. Create a solution that meets this consumer need better than any competitor can meet it. See your job as one of creating superior customer value and communicating this value in a superior way.

What is revolutionary is the need for the company to incorporate social and digital tools to carry out this work. Companies need to collect ‘big data’ about individual consumers who have specific needs and apply sophisticated marketing analytics to arrive at consumer insights that can be converted into compelling consumer value propositions.

How do cyclical trends in the economy affect marketers? More specifically, if demand-led growth is on the decline, what single marketing effort is the most important to avoiding a loyal consumer defecting to a competitor?

Buyer behaviour obviously changes in times of market growth versus market decline. When a recession, or a fear of recession, occurs, consumers will intelligently reduce their expenditure and move towards lower-cost products. Every competitor will have a choice: increase the value of the offer, or cut the price of the offer. Normally it makes sense for the company to retain the price and better document and confirm the offer’s superior customer value. If superior value doesn’t exist, the company either has to add more value (for example, free shipment) or cut its price.

Do you think the original elements of the traditional marketing mix will still be relevant in 10 years’ time? 

The marketer’s main toolkit remains the 4Ps (product, price, place, and promotion) and STP (segmentation, targeting, positioning). Each of these elements undergoes modernisation all the time. Product includes packaging, as well as service products. Place is being redefined into omni-channel marketing but it is still place. Promotion is including digital and social communication alongside print and broadcast media. I would welcome a new marketing framework if it promised to address marketing decision problems in a more decisive way. Until then, most companies will use the traditional framework in preparing their marketing plans.

How will creative and media agencies need to evolve over the next five years to keep up with the pace of technology? 

The agency of the future will develop skills in both traditional and digital advertising. This would be better than hiring separate traditional and digital agencies because companies must connect traditional and digital advertising. A 30-second commercial may need to include a digital address showing where viewers can go for more information. The job of the ‘full-service agency’ is to find synergies between the two types of communication, so that 2 + 2 = 5, not 4.

Do you think that the chief marketing officer (CMO) role will be replaced by a combination of chief tech officer and chief analyst, or is this still a viable career path?

I’d like the CMO position to continue to manage the integration of all the elements that will impact on customer demand. The CMO should spend at least 50% of their time working with the other ‘chiefs’ in the company. The real value of the CMO will be realised when he or she is included in all the strategy planning. It would be unwise to confine marketing to designing tactical moves. The CMO is in the best position to foresee where the particular market is going economically and technologically. The CMO’s staff must include an excellent digital person and technology person. 

Do you think marketing and HR may evolve into one business function, as people leadership and organisational branding become increasingly connected, with shared goals and purposes?

I would prefer the heads of marketing and HR to work very closely together but remain separate functions. The CMO is highly interested in seeing that HR hires very service-minded people. In the hotel business, Marriott says that the first job is to hire the right employees and then the customers will come. The CMO should support the HR person to gain a sufficient budget to hire excellent employees, not just average employees. The evidence is strong that excellent employees have a productivity impact that is several times that of average employees.  

Do you think that zero-based budgeting for marketing, based on the Unilever example, will be widely adopted, to make marketing entirely accountable? How can value be measured throughout all channels since tracking is harder offline? 

Zero-based budgeting for marketing means starting each year with no budget allocated to marketing, until marketers propose specific marketing spend – along with the evidence that results will exceed costs. This is in contrast to normal budget setting where the budgets of the past year are the starting point, raised or lowered slightly. We acknowledge that some past marketing expenditures were not productive, and that from time to time, it is worth reviewing each major budget item to decide whether it should be eliminated, decreased or increased. 

The problem with zero-based budgeting for marketing is two-fold. Many campaigns need continuity and they shouldn’t be cut off before they have achieved their full impact. 

Also, it is increasingly difficult to assess the financial impact of a particular digital tool or a particular marketing channel in an increasingly complex and interactive world. 

Zero-based budgeting is a highly impractical tool for yearly budgeting. However, I grant that it could raise marketing efficiency by being introduced every few years.

Do you believe leaders across all disciplines and functions need to change their mindsets to succeed in a volatile world? 

Today’s world is increasingly characterised by volatility, uncertainty, complexity, and ambiguity (VUCA). Donald Trump’s election as US President has greatly contributed to VUCA. If Hillary Clinton had been elected (she won the popular vote by 3 million votes), we would arguably not be in a VUCA world. Events would have taken their normal course and businesses would carry normal expectations. 

But Trump sends out tweets in the middle of the night, many of which attack companies, journalists, judges, pollsters, or the voters themselves. These attacks are a sign of paranoia. Many business leaders have to think twice about any move for fear that the president will call them. Consumers are worried about their health benefits and they are no longer certain about social security and Medicare. They, and businesses, are spending their money more carefully, which slows down economic growth.

My answer to that? Business leaders must change their mindsets, in light of Trump’s erratic behaviour; he issues executive orders almost daily. His behaviour has been copied by populist leaders abroad with the effect of introducing even more instability into the world economy. 

Are there marketing skills that all MBA students and graduates need to thrive in a VUCA business world?

Most Business programmes are training their students in social and digital skills. They are also making students more aware of the effects of climate change. Professors are increasingly criticising shareholder value as the measure of business success and replacing it with stakeholder value as a more comprehensive measure of business performance. Marketing students graduate with a broader view of the factors that affect corporate image and reputation than previous Business School graduates. 

And finally, do you feel optimistic about business adaptability as the
world becomes more uncertain but also more connected? 

Business literature increasingly emphasises company agility and responsiveness to rapidly changing conditions. Companies need to monitor technological trends, political debates, and economic issues. Companies such as Unilever, Starbucks and Amazon show incredible business adaptability. But many companies are still coasting and need a few more shocks to wake up. My hope is that an increasing number of companies recognise that growing income inequality will hurt, not help them, and that they need to take a more expansive customer benefit and welfare view of what makes an economy strong.

Philip Kotler is the SC Johnson & Son Professor of International Marketing at the Kellogg School of Management, Northwestern University, Evanston, Illinois

Professor Kotler received his Master’s Degree at the University of Chicago and his PhD Degree at MIT, both in economics, conducting post-doctoral work in mathematics at Harvard University and in behavioural science at the University of Chicago.

He is the author of 57 books and has published more than 150 articles in leading journals. He was the first recipient of the American Marketing Association’s ‘Distinguished Marketing Educator Award’ (1985) and has received a host of other accolades, being inducted into the Management Hall of Fame in 2013. 

Kotler has consulted for such companies as IBM, General Electric, AT&T, Honeywell, Bank of America, and Merck in marketing strategy and planning, marketing organisation and international marketing. He has travelled throughout Europe, Asia and South America advising companies on applying economic and marketing science principles to increase competitiveness, and governments on developing the skill sets and resources of their companies for global competition.

He has been Chairman of the College of Marketing of the Institute of Management Sciences, Director of the American Marketing Association, is a member of the Board of Governors of the School of the Art Institute of Chicago and of the Advisory Board of the Drucker Foundation. 

He has received a number of honorary doctoral degrees from several international organisations.