Archive for April, 2010

Is it OK to make a profit for investors while serving the poor?  Is business better or worse equipped than nonprofits to lead innovation and change?  Will the increased accountability required by donors hinder innovation?

The American Express Foundation brought this week to Thunderbird an impressive group of leaders from nonprofit organizations from around the world for an intensive leadership development program directed by my colleagues Mary Teagarden and Mike Finney.  About twenty-five leaders from organizations like Acumen Fund, Ashoka, Aravind Eye Care System, Care, Doctors Without Borders, the Global Fund to Fight AIDS, Tuberculosis, and Malaria, Heifer International, Pro Mujer, International Federation of Red Cross and Red Crescent Societies, and World Wildlife Fund.

Some of these organizations have contributed to bringing down the wall between business and nonprofits and unleash a new era of innovation.  They are applying concepts of entrepreneurship to drive social change, the tools of venture capital to crack complex development challenges or microfinance to unlock the poverty trap.

Nonprofits are increasingly benefiting from management tools and frameworks coming from business.  These tools are opening up entirely new solution spaces and encouraging a new wave of entrepreneurship and innovation.  I am not sure the reverse flow of influence is occurring with the same intensity, and it should.  Nonprofits have a lot to teach business in how to build high-commitment, purpose-driven organizations, how to deal with uncertainty, balance multiple stakeholder interests and build talent.

Great piece on Thunderbird’s Executive MBA program in Geneva (Equipping yourself for the war on talent – Swiss Style Magazine).

Any business school can graduate world-class students, entrepreneurs or managers, but how many can actually give the world socially conscious business people who are also globally aware?

One institution that has established itself on the reigns of international management is Thunderbird School of Global Management. Its flagship campus is in Phoenix, Arizona, but to further spread its wings of knowledge, it has recently set up a base in Geneva in collaboration with The Graduate Institute of International and Development Studies. Thunderbird faculty travel monthly to Europe to deliver the programme in the form of one-week modules over a period of 11 months and the Institute complements Thunderbird’s expertise with guest professors.

How does Thunderbird know that it truly prepares its students for the international world? Extensive research at the institution led to the development of a Global Mindset Inventory assessment, whose three components include psychological, intellectual and social capital. These are integrated into the programme to give leaders the ability to influence individuals, groups, organizations and systems that are unlike their own.

The Senate Bill 1070 that was signed yesterday into law by the Governor of Arizona requires police to make “a reasonable attempt to determine the immigration status of a person during any legitimate contact made by an official if reasonable suspicion exists that the person is an alien who is unlawfully present in the U.S.” Governor Brewer also announced an executive order to train the police to avoid any form of racial profiling in the application of the law.

I would love to go through the training myself and find out what kind of technique allows someone to make a reasonable judgment as to whether a person may be an “alien who is unlawfully present in the U.S.” without engaging in some form of racial profiling.

Will our police be able to tell without consideration of skin color, English proficiency, accent, dress choices or apparent wealth?

Will our students and faculty, whose skin colors, accents, fashion preferences and car bodies cover the widest possible range, be deemed suspicious under the new law if in contact with a police officer?

Should my Spanish-speaking, blue-eyed, American son carry a birth certificate with him when he rides his bicycle around the neighborhood with his friends?  Or perhaps only when their darker skinned Mexican friend is with them?

Shall I carry a passport in the car in case I’m stopped for a traffic infraction during my commute to work and caught with a broken headlight and listening to Shakira in, oh no!, Spanish?

As Dr. King said, “Injustice anywhere is a threat to justice everywhere”.  Yesterday was a sad day for Arizona and for justice, everywhere.

Every once in a while, a great mind comes along that helps us look at the world differently.  C. K. Prahalad, who passed away on Friday, was one such man.  Among his many contributions to the understanding of the management profession, he helped us see business as an effective solution to poverty and economic development and he inspired leaders of many business enterprises to look at the bottom of the income pyramid not as poor who need charity, but as clients who need to be served.

His work signaled a tipping point in our understanding of development, corporate citizenship and social innovation.

We lost a true guru.  But his thinking will live on.

PS.  I tried to put Prahalad’s contributions in perspective in this presentation I gave last December in Madrid (in Spanish) organized by the Bankinter Foundation for Innovation.

Spanish universities have not been able to crack the science and technology elite.  No Spanish university appears among the top 100 in the Academic Ranking of World Universities elaborated in Shanghai, and only one in the top 200.  This is problematic not just for the national ego, but for the future competitiveness of an advanced economy which will ultimately be measured by its capacity to innovate.

In soccer, where much less is at stake, Spain leads the world. Real Madrid and Barcelona are considered among the top ten teams of all times, Spanish teams have won the European Champion’s League more times than the teams of any other country, and the FIFA ranks the Spanish national team today as the best in the world.

These are the results of very different systems of governance and accountability, concentration of talent and financial resources, and competitive dynamics.  Spanish universities must join the world elite, and soccer may provide some good insights as to where to start.

(My op-ed piece “Spain needs a Madrid-Barça of universities” appears in EL PAÍS on Monday, April 19th: España necesita un Madrid-Barça universitario · ELPAÍS.com.)

Are you worried about productivity and morale in your  organization?  Here’s a deceptively  simple and extremely low cost idea: Be nice to the people you work with, do not hire people with a track record of abrasive behavior, and deal with those who misbehave.  Giving more credit to others, saying “sorry”, “please”, and “thank you”,  not escalating offenses… can go a long way in building positive work environments.

My colleague Christine Pearson presented her latest book to the Thunderbird staff today in a session dealing with the hidden costs of being, may I say, a jerk, at work.

Her definition of incivility: “Seemingly inconsequential inconsiderate words and deeds that violate conventional workplace conduct“.

The price tag: incivility erodes values, confidence, competitiveness, cooperation, it stifles creativity and costs organizations dearly.

How common?  In 1998, 20% said to have been offended at least once per week.  In 2007, it shot up to 48%.

The effects on the recipient: anger, fear and sadness…. and then retaliation, inhibition and disengagement… decline in dedication, and desire to leave (1 in 8 victims actually do leave eventually).

via The Cost of Bad Behavior: How Incivility Is Damaging The Workplace And What To Do About It:

Whether it’s a standoffish coworker, arrogant boss, or an abrasive person in another department, incivility has become an everyday problem for many of us. Of course, it’s never fun or easy to encounter bad behavior. But what most managers don’t know is that incivility is not only a nuisance, it’s also a threat to their company’s bottom line.

US News & World Report named Thunderbird, once again, the best graduate school for international business.  This is the 15th time Thunderbird receives this distinction.  These rankings are based on the opinions of deans, senior faculty and program directors across the industry, so I take this as a meaningful recognition of our work by our peers.

I congratulate all Thunderbird faculty and staff,  students and alumni, corporate recruiters and partners, donors and friends for helping Thunderbird deliver on its mission year after year.

Read more at: International – Best Business Schools – Graduate Schools – Education – US News and World Report.

The biosphere can provide a powerful metaphor and a source of inspiration for building sustainability into core business processes, according to Thunderbird Professor and Director of the Lincoln Center for Ethics in Global Management, Gregory Unruh’s.  Unruh’s  biosphere rules, his notion of a value cycle, and his prescription of embeddedness will change the way we think of sustainability of business. Building a sustainable global economy is one of the most crucial challenges of our time and the answers, it turns out, were staring us in the face.

via Earth, Inc. – Gregory Unruh.

The Thunderbird Private Equity Center (TPEC) is holding its annual Global Private Equity Conference on campus this week.  If business is the engine of progress and innovation, and credit and public capital markets provide the fuel to the engine, private equity can be seen as the battery that helps jump start the process or that, as in hybrids, injects additional power in intelligent ways to optimize performance.

This year’s annual meeting of the Clinton Global Initiative (which for the sake of disclosure we are advising)  will focus on four key areas: empowering women and girls, providing access to technology, strengthening market-based solutions and harnessing human potential (our topic).  These are by no means THE only important topics, but they are relevant enough in addressing the world’s most pressing challenges, that they have emerged to the top of this influential conference.

As I listen to the panelists in the TPEC conference I can’t help to think of how the tools of venture capital and private equity, when used to create real value (not to extract value or to create a mirage of financial value), can have a transformative effect on each of the four topics:

• Private equity can help empower women by providing venture financing to women entrepreneurs.  Because women are more likely to employ other women and to re-invest in their communities than men, the investments can have significant ripple effects.
• Private equity can facilitate access to technologies, which can in turn help tackle economic development and sustainability traps, by financing ventures that create, distribute and leverage new technologies.
• Private equity not only can strengthen market-based solutions.  Doing so is actually what private equity is all about.  No one else is probably better equipped to finding market-based solutions to complex problems.
• Private equity can help harness human potential by driving the process of private job creation, which is the best engine of employment we have so far discovered.

Great interview of Chip Pitts, who recently spoke at The Economist conference on Corporate Citizenship (by William Fisher):

The scary economic developments of the past two years are contributing to a renaissance of discussion about “Corporate Social Responsibility,” and how it might have helped head off Wall Street’s precipitous failure. To explore that question, Truthout contributor William Fisher talked with Chip Pitts, one of the world’s leading authorities on the subject. In this interview, Professor Pitts answers key questions. He believes that CSR, if “properly implemented, would have prevented the crisis.” Former chief legal officer of Nokia Inc. and former chair of Amnesty International USA, Professor Pitts currently serves as president of the Bill of Rights Defense Committee and lectures on CSR and business/human rights at Stanford Law School and Oxford University. He is adviser to the UN Global Compact and the Business and Human Rights Resource Center and has also advised the successful Business Leaders Initiative for Human Rights, among other global CSR initiatives. He is co-author and editor of the first systematic legal treatise on the subject, “Corporate Social Responsibility: A Legal Analysis” (the royalties for which all go to sustainability and human rights charities).

t r u t h o u t | Corporate Social Responsibility: Wisdom or Window Dressing?.