Archive for July, 2010

By Will McDonald, Director EMBA Europe

Bonjour de Geneve!  I wanted to share a “truly Thunderbird” moment  during Dr. Nelson’s Contemporary Business in Latin America course to our Executive MBA-Europe students.  As you know, Roy Nelson’s case study on Intel’s Site Selection in Latin America (Costa Rica) and his recently published book feature President José María Figueres prominently.  Roy was scheduled to teach his Intel case in his final course session tomorrow.

Thanks to the invitation by one of the EMBA students in Geneva, Farid Saffar, and Pres. Figueres relationship with Thunderbird as a Board Fellow, President Figueres joined us at the Graduate Institute today to address the EMBA cohort, sharing his insights, wisdom and personal anecdotes about the Intel story.  Roy Nelson prepared the group with a case discussion and  debrief in the preceding class session, and President Figueres gave an informal yet riveting talk, town-hall style, spending over an hour with the group (on a range of topics), just hours before he had a scheduled flight to Singapore.

President Figueres could not have been more gracious–nor more effusive in supporting and validating Thunderbird’s mission–coincidentally on a day when we also had a few prospective EMBA students in attendance.

We thanked President Figueres with a copy of Dr. Nelson’s book and a hand-made Thunderbird soccer ball (from Afghan Project Artemis).  We did not have time to arrange for a professional photographer, but a few pictures (thanks again to Farid!), are attached.

Bon weekend a tous & regards from the EU team!

Positive reaction of financial markets to European stress tests highlight the value of transparency.  Markets respond more negatively to uncertainty than to bad news that are certain.  Spain went out of its way to include all of its banks in the stress test (other countries didn’t), disclose all positions in sovereign debt, and apply some of the strictest assumptions of GDP and real estate market declines.  Even though five of seven failing grades went to Spain, markets have celebrated this increased level of transparency.  My quote and others (in Spanish) from EL PAÍS:

La mayoría de analistas ven con buenos ojos la reacción de los mercados a las pruebas hechas públicas en la tarde del viernes. “Estos ejercicios van a tener resultados positivos, sobre todo para España, que se beneficiará de la mayor transparencia. Se podrá recortar la prima de riesgo que paga por su sector financiero, pero no la parte que se explica por sus mayores dificultades económicas. Se acercará a los 100 puntos básicos, pero sin llegar a tocarlos”, señala el catedrático y consultor de la Reserva Federal Santiago Carbó. “Es verdad que el efecto es positivo. Aunque continúa el debate sobre si las pruebas son lo suficientemente duras, o si los supuestos sobre la evolución del mercado inmobiliario son razonables. El mercado ha celebrado sobre todo el aumento de la transparencia. España ha sido hasta ahora de las más castigadas por los inversores. Y, por tanto, para convencer tenía que ir más allá en transparencia y dureza de las pruebas. La respuesta de los mercados corrobora que fue una decisión correcta”, añade Ángel Cabrera, director de la escuela de negocios estadounidense Thunderbird.

via Premio a la transparencia española · ELPAÍS.com.

Needed: SuperHUMANS not superheroes

Q: Tony Hayward, once credited for BP’s “green” turnaround, is forced to resign in disgrace. Michael Dell, the revolutionary high-tech entrepreneur, is sanctioned for misleading investors. Wall Street titans, once lionized, are now reviled. Where have all the CEO heroes gone?

Taking BP out of the whole it dug itself into will require a leader who’s part experienced oil & gas executive, part government relations specialist, part statesman, part crisis manager, part credible spokesperson, part cheerleader, part trusted coach. On top of that, whomever replaces Hayward will have to perform these tasks while being subjected to an unprecedented level of public scrutiny. This will be, without a doubt, one of the toughest management jobs of our era.

via On Leadership Panelists: Needed: SuperHUMANS not superheroes – Angel Cabrera.

Thunderbird alum and board fellow Bob Dudley has been floated as likely successor of Tony Hayward at the helm of BP (Dudley Pick Underscores Importance of U.S – WSJ.com).  Bob has demonstrated a unique capacity to deal with very complex business situations, including a difficult joint venture in Russia, TNK-BP, and leading BP’s response to the oil spill in the Gulf.  Having had the opportunity to know him and work with him, and considering how much is at stake, I can only hope BP’s board will confirm Bob’s appointment.

While the press has highlighted his citizenship (he is American) and personal connections with the Gulf (he grew up in Mississippi), those are probably the least important of the assets he will need.  The oil-spill crisis has highlighted the evolving and growing expectations society deposits on CEOs.  Running an efficient operation and delivering financial results are but a small part of the job description.  Understanding and responding to the often conflicting demands and needs of different stakeholders, shaping cultures, creating meaning (in addition to money), embodying and enforcing values or responsibility as much as competitiveness, managing crises, cultivating an emotional rapport with individuals inside and outside the organization, managing relationships with multiple levels of government in multiple geographies, make for a much longer to-do list.

Whomever is ultimately chosen, he or she will not only have to perform these tasks but do so while being subjected to an unprecedented level of scrutiny.  This will be, without a doubt, one of the toughest management jobs of our era.

(Photo: Bob Dudley with Dr. Cabrera at Thunderbird Homecoming, March 2009.)

Richard Barker argues in HBR that management is not a profession.

I will argue that management is not a profession at all and can never be one. Therefore, business schools are not professional schools. Moreover, laudable and beguiling though professional standards and ethics may be, and however appealing professional status is, hanging the mantle “professional” on business education fosters inappropriate analysis and misguided prescriptions. (The Big Idea: No, Management Is Not a Profession – Harvard Business Review.)

While the arguments provide for a healthy debate, they are, as Rakesh Khurana aptly puts it, wrong:

We have to recognize that many business school graduates attain positions of social power and influence. Wherever the issue of power arises, we need to ask questions around responsibility and accountability. Business education has the potential to be a powerful influence in making business managers more accountable to the society they shape. Whether they went to business school or not, most managers in large organizations are impacted by individuals trained by business schools, the ideas that are diffused through business school publications, the cases taught in executive education programs, and the general tone set business schools set about the purpose of management and the relationship between corporations and society. For all these reasons, business schools themselves have the responsibility to make management a profession. (Why Management must be a profession – Harvard Business Review)

Business schools are finally asking themselves the key questions about their purpose and obligations towards society.  The notion of professionalism provides a very useful framework to address the question.  Professions exist to serve the greater good by applying specialized knowledge to solving complex problems.  They are built on a combination of training and institutionalized responsible conduct.  I’m yet to hear a better alternative to describe the purpose of management and drive decisions about management education. (Barker proposal does not do it in my view).

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Great conversation between The Economist Matthew Bishop (author of Philanthrocapitalism) and Nancy Lublin (CEO of Do Something and author of Zilch: The Power of Zero in Business).

It is true that leaders in the non profit sector have a lot to learn from the for-profit sector when it comes to management practice.  But as Nancy so eloquently argues, non-profits can provide extraordinary lessons when it comes to managing and motivating people Businesses would be well served by encouraging key staff to actively engage in non-profits.

Online video and audio: programmes and multimedia | The Economist.

A diverse, broad coalition of business groups from across Arizona issued this statement, urging the federal government to reform immigration and regretting divisiveness created by new law:

“The failure of the federal government to fix our broken immigration system has led to recent actions on immigration by Arizona’s policy makers. What we have now is a divisive, emotionally charged environment that is tearing at the fabric of Arizona’s sense of community and threatening the essence of our historically diverse culture. Regardless of how individuals feel about Arizona’s immigration laws, the negative, unintended consequences such as damaging our relationship with our largest trading partner, creating tension in our communities and generating calls for inappropriate boycotts, are significant.

The people of Arizona, like the people in all states, have every reason to be frustrated that our elected officials in Washington haven’t fixed our broken immigration system. It is a federal responsibility. Arizona cannot truly solve the set of complex issues that make up the immigration debate. The federal government must deal with border security, immigrants who are in the United States illegally and the economic realities that drive immigration.
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