Showing posts with label Word from the Associate Dean. Show all posts
Showing posts with label Word from the Associate Dean. Show all posts

A Word from the Associate Dean: VUCA and the managers of tomorrow

Change is occurring faster than ever before, the world is more and more unpredictable. More players, more issues, and more voices means chaos and complexity and the “realities” of doing business are not so hard and fast as we may have once assumed it to be. Organizations operating under these forces face unique challenges and opportunities in decision-making, problem-solving, and planning. VUCA, an acronym standing for volatility, uncertainty, complexity, and ambiguity is a term derived from military vocabulary that is increasingly relevant for describing how managers should take into account the external environment. Being aware, being prepared, and anticipating the complications arising from VUCA are essential characteristics of a global manager today.

As companies understand (or more likely, fail to understand) this operational chaos, they seek a new kind of leader, a talent that is prepared, aware, and capable of foreseeable strategy and informed action. These are the kinds of leaders the Global MBA seeks to train, to help provide companies with the talent they need to stay ahead of the trends. The companies that fail to perform today are the ones that are still operating under the talent acquisition, talent management, and workforce planning processes of yesterday. But this chaos is here to stay, so businesses and business leaders not only need to get up to speed but to start finding the relevant talent that can perform and remain agile in this environment.

Agility is a term we stress in our program. In the age of innovation, disruption, and globalization, sticking with the tried and true won’t necessarily cut it. Unique challenges require unique solutions, and the demands placed on business leaders in this setting are diverse, varied, and in constant flux. As new markets emerge, new opportunities and obstacles arise.  At a faster pace, the future is upon us before we can anticipate it. And with disruptive innovation the rule rather than the exception, competition is breakneck. Traditional leadership styles don’t work in this sort of dynamism. The leadership must mirror the environment and focus on VUCA preparedness, anticipation and evolution. And that doesn’t mean that there’s a one size fits all model for management; complex problems require complex solutions and equally complex strategies. Tomorrow’s leaders must be able to thrive in multiple, multi-faceted environments, keeping a finger on the pulse of emerging markets, mature markets, entrepreneurship and innovation, and efficiency and optimization.

Embracing chaos, taking risks, being capable of rapid strategy changes in response to changing markets: all of these characteristics must also be balanced by pragmatism and commitment and underscored by a passion to bring employees along on the adventure. The skills gained through interacting with a diverse cohort, traveling and working internationally, exposure to emerging markets, studying in a mature market, learning from the best professors from around the world are all hardwired into the design of the Global MBA to respond to these needs. Studying a variety of cases of multiple situations and from diverse industries helps students examine strategy and learn from failure. Extensive teamwork helps them learn to collaborate, share strengths and compensate weaknesses, and adapt collectively in response to the VUCA microcosm of a rigorous, 12-month MBA.

How should companies respond to these complex external environment? In kind. Agile leadership means harvesting the best of skills, styles, and experience to meet specific, unique needs. In July, the Global MBA students will take off around the world for their International Immersion Projects. Each team consists of students of different nationalities, with different linguistic capabilities, with different professional expertise and different academic strengths. They would be working in for a Lifestyle brand in China, agri-business in Bolivia, energy and bottom-of-the-pyramid issues in India, eco-tourism in Morocco, small and medium size sector development in Djibouti and wine industry in S. Africa. To tackle these diverse projects in challenging external environment requires diversified skill set. The teams will work in environments ranging from -20 degree C to +50 degree C! It also means that the teams are uniquely equipped to respond to the shifts and demands of their different projects in different locations through practiced collaboration and constructive conflict. The successful companies of the future will harness resources like these and use them to become leaders in a VUCA-fueled world.

 

A Word from the Associate Dean: Recession in Europe and Implications for India and South Asia

By Ashok Som, Associate Dean of the Global MBA

Last week in Singapore, Professor Ashok Som participated in a panel discussion on the topic of Recession in Europe: Implications for India and Southeast Asia. Watch the conference video below!

[youtube http://www.youtube.com/watch?v=XOBijb30YNI]

The economic crisis in Europe reaches far beyond just the EU, having a tangible impact on India and Southeast Asian countries. The effect is felt on both a macro and micro level.

At the macro level, the cycle of confidence which evolves over a very long time horizon plays a decisive role; success breeds confidence which unfortunately turns into over-confidence and even arrogance. Complacency sets in. The collapse of bubble based upon this over-confidence leads now to under confidence, which is followed by efforts to rebuild. Thus the cycle begins again.

India and Southeast Asian countries are affected through trade and financial channels, as Europe and the US account for a third of India’s exports. Even if a full recession is averted in Europe, its slow growth would have implications for India. The EU accounted for nearly $47 billion of Indian’s total exports of $254 billion last fiscal year, making it a larger destination than North America. Between 2004 and 2010, services account for 66% of the increment in India’s GDP, of which 9.4% were from software. The deceleration or decline in software export revenues is bound to have an adverse affect on GDP.  Austerity measures put in place by European countries and falling consumer spending may impact exports from India. Though China is India’s largest trading partner, it mostly imports raw materials for finished products for the rest of the world.

Further impact is seen with capital flight, the outflow of foreign institutional investment from the equity market. This has led to a steep depreciation of the rupee. Public debt is another concern. Though India’s gross public debt to GDP ratio is down to 66.2% from 75.8% in 2007, it is will among the highest in the region.

While a recession in just Europe or just the US might not be enough to cause a global recession, the collapse of both economies likely would. Asia’s developing economies would take a significant blow to exports, and GDP growth would decelerate. The UN has stated that a prolonged recession in Europe could have significant impact on growth across South Asian economies, including Sri Lanka, India, and Pakistan. In 2011, Bangladesh, India, and Sri Lanka recorded GDP growth of 6.5% or higher, while the Islamic Republic of Iran, Nepal, and Pakistan registered growth rates of less than 4%. Further, downgrading of sovereign creditworthiness by credit rating agencies would likely be more negative than previously experienced. Further, the services sector in India, including IT, contributes as much as 52% to the GDP growth and is directly linked to job creation and sustenance. For many Southeast Asian countries the Thailand, the Philippines, Malaysia, Indonesia, the recession is occurring in the middle of a long and incomplete transition from authoritarian to democratic forms of governance. Other countries, such as Vietnam, have retrained authoritarian governance but depend on continued high growth to maintain support for the government. The impact of the global recession on exports, therefore, threatens political stability in a number of countries in the region.

The economic outlook towards Asia-Pacific would likely be more negative than previously experienced, and a larger number of negative ratings actions would follow such as downgrading by credit rating agencies.

Within the macro phenomenon I have identified a paradox. A recent study by the Stockholm International Peace Research Institute (Sipri) pointed out that India has in recent years become the world's largest recipient of arms, accounting for 10 per cent of global arms imports in the period 2007-11. In contrast, China, which was the largest recipient of arms between 2002 and 2006, fell to fourth place in 2007-11 due to indigenization over the past couple of decades resulting in a $119 billion defense budget for 2012-2013: China purchases more and more from within its country due to its policy of technology transfer. Most of the donor countries are from Europe be it France, UK, Russia.

On a micro level, multinationals face both challenges and opportunities. Reforming the tax structure in India is an obstacle, but access to a market that is growing while Europe and the US stagnate is an opportunity. A rich talent base exists in India and South Asia, and with growth comes new business opportunities in retail, insurance, private banking, etc. More and more, members of the educated workforce are leaving Europe to seek a better life in emerging economies around the world. Brazil, Canada, and Australia are some of the countries seizing this opportunity to attract top talent. On the higher education front there are implications. Recession in Europe means less jobs and countries tightening their immigration rules and policies for jobs for foreigners which in-turn will lead to less number of students opting to study from India and S.E. Asia in European Universities and thus in the talent pool of the region.

By the way of conclusion the most important moot point is to regain the cycle of confidence and trust within the European Union and that of India and S.E. Asia.

A Word from the Associate Dean: Luxury in India: Impediments to Growth

Adapted from a presentation given at the Mint Luxury Conference in India


For a nation to succeed in an industry, four elements are at play: the demand within the market, related and supporting industries, firms that rival and compete within this structure to create innovations, and the environmental (political, legal, economical, social, technological) conditions necessary for the industry. These include infrastructure, high duties, varying tax structures, bureaucratic delays, etc. With these four conditions to consider, the role of the State is also key to making it successful.

The first condition is demand. Is there a demand for luxury goods in India? Data from studies done by  Bain & Co., McKinsey, AT Kearney, Credit Suisse, KPMG, ASSOCHAM-YES Bank indicate yes, and that this demand will grow exponentially between now and 2015 and 2030. Users of luxury goods will consume in India and/or abroad. Very few people buy luxury goods every day. Luxury buying is not a rational behavior. A woman will buy a dress the same day, not wait and take a plane to buy it later to save some money. A man in love wants to buy a solitaire ring; he will not wait for months to buy it during his next travels, to save some money. Demand exists.

The second condition is the growth of related, supported, and upstream industries which help, provide, and feed the luxury industry. It is not a secret that India supplies a considerable proportion of materials and ideas that go into the creation of luxury goods. The watches and jewelry sector is the leader here, followed by leather and accessories, perfumes and cosmetics, and consumer wines and spirits. For example, in March of 2013 French firm Pernod Ricard[1], which sells brands such as Chivas Regal, Absolut Vodka, Malibu Rum, Ballentine, etc., became the No. 1 most profitable firm in India. According to Alexander Ricard, Chairman and CEO, this is a result of meticulously following a “trading-up” or premiumization and innovation strategy aimed at the emerging middle class. If a French company can understand how to take advantage of the supporting and related industries such as tourism, hotels, and the needs of the growing middle class, it might not be so difficult after all.

The third condition must incorporate oligopolistic firms that compete within this structure to create innovations. This condition is gathering momentum in India, for example with Genesis Colors and its tie-up with Jimmy Choo, Burberry, Canali-Armani, Etro, Paul Smith, Sephora, Reliance Brands with Paul & Shark, Zegna, Thomas Pink, DLF Brands with Salvatore Ferragamo, and a host of other players. Most of the French and Italian brands are present in India in some way. As both the brands and their partners compete for retails space, for loyal customers, for a product-pricing niche, and for access, innovations are bound to happen which will in turn create an ecosystem to bolster the luxury industry in India. A key question to keep in mind is the challenge of finding the “needles in a hay stack” customers early on, the loyal customers such as those found by LV in the wedding market Delhi-Haryana.

The fourth, environmental factor is still evolving and not so bleak. The single brand and multi-brand retail bill is on its way, and while there are impediments, it is a first step. What can happen in China cannot happen in India. It is the stark reality of the world’s largest democracy. India must hold on and understand that it will take time, also recognizing that here the State has a role to play. On the other hand, India has always outshone and gone ahead with its entrepreneurs (IT industry, family groups…). What in China has always been accomplished with the State, India has shown through history that it can innovate despite the State. Of course, a proactive role from the government always helps as a catalyst.

By the way of conclusion my key takeaways are as follows:

  • The crystal ball shows that within the four main (demand conditions, upstream industries, oligopolistic behvaior and environmental factor) which India needs to tackle – three of them are positive.

  • The fourth factor condition of environment will always take time and we need to be patient.

  • A proactive role from the Government always helps as a catalyst.









[1] The maker of Absolut Vodka and Chivas Regal Scotch whisky crossed the $1-billion sales mark in the country in 2011-12 when its sales rose 34% to Rs 5,941 crore, making India the fourth-largest market for Pernod Ricard. Its net profit soared 77% to Rs 593 crore during the period, according to the Registrar of Companies, where it filed the financial results in January, making India the fifth-largest contributor to the French firm's worldwide profits.


A Word from the Associate Dean: To find a multinational post-MBA job at a foreign location, learn the language there

By Ashok Som, Associate Dean of the Global MBA

Originally published on Pagalguy.com 

When considering an MBA, one needs to first ask themselves what their post-degree career goals are. Do they want to change their location? Their function? Their sector? Or some combination of the three?

For students from emerging markets such as India, there is intrinsic value to pursuing an MBA in Europe as it exposes them to a Western way of thinking and the best practices from another country and culture. In a volatile, uncertain, complex and ambiguous world, business requires managers to be more agile and culturally fluent than ever before. And for students who wish to stay on and work in Europe following their MBA, having a degree from a reputed and renowned European institution can certainly help.

Also at play in determining a graduate’s success in finding a job in a country such as France, is their willingness and ability to become proficient in the local language. Even if the de facto language of international business is English, many French people still only speak French. This means that your customers, your clients, your associates, and your higher-ups risk being separated from you by a very real language barrier.

Overcoming this barrier, and demonstrating a willingness to learn the language of the country you are in, is a major facilitator in becoming employed today. For example, theCAC40 global leaders have French roots and use dual language in their daily business. They are in constant search for talent who can bridge the gap between France and the emerging markets they are operating in.

At a programme such as the Global MBA of ESSEC Business School, courses are taught one hundred percent in English, but that doesn’t mean there aren’t plenty of opportunities for students to learn French at such schools. Apart from beginner and intermediary French classes, conferences and presentations in the French language are a great opportunity to listen and learn to become comfortable with the language. Students often stay in the homes of French families or meet up with French students for language exchanges, and make every effort to practice their French in daily life.

Being proficient in the language of the country in which you work is key for successful communication, competent collaboration with other colleagues and companies in B2B settings, and also an important indicator of your respect for the people that you work with and for. Even if your French isn’t perfect, simply being able to exchange basic pleasantries such as “hello,” “how are you,” “thank you,” and “have a nice day” go a long way toward making a favourable impression, essential when face-to-face in networking, recruitment, or work situations.

Many students from emerging markets look at the difficult economic situation in Europe and become discouraged from studying here, thinking that jobs and work-permits in limited supply would mean a sure trip back home post-MBA. At the same time, graduates who do find employment within a multinational organisation early on are likely to experience higher career mobility than those from previous generations.

As multinationals search for growth and profitability, they are attracted to emerging countries. They require an efficient and competent workforce, adept and fluent in common business practices but also conscious of and conversant in local practices, language, and culture. This means that employers are often eager to hire locally, but from among a pool of local candidates who possess the skills obtained through a world-class MBA program. MBA holders with diverse backgrounds offer more competitiveness on the global playing field for companies that have a multinational presence. These businesses are growing in complexity and scope and have to adapt to local environments, meaning they need skilled and competent leaders more than ever before.

Last year, for example, one of our graduates was employed by an international consulting firm. While he returned to India for six months at the beginning of his contract, he is now being relocated to Belgium in a more permanent move. Another student made a move from managing a family run construction business in Greece to becoming a wealth consultant in Russia. Companies today want managers that are comfortable in their home economies but can also bring their local expertise to the global stage. Learning the right foreign language is akin to building the bridge that will take you there.


An MBA in France: a powerful choice for students from emerging markets

By Ashok Som, Associate Dean of the Global MBA

At ESSEC’s Global MBA, our group of students this year represents 14 different nationalities. That means that in any given class, perspectives and practices are being shared between Asian, American, European, Latin, and Middle-Eastern students. The cultural competency gained through these interactions is an invaluable addition to the already rich curriculum of an MBA program. The Global MBA rises to this challenge of offering a program geared towards high-potentials who are eager to bridge the gap between developed nations and emerging markets. One of last year’s graduates, an Indian student with an engineering background was able to use his MBA as a platform for changing both sector and location. Taking advantage of a year in France to gain some proficiency in French and maximizing his chances for networking, he landed a consulting job in Belgium. This functional and geographical change was facilitated by his choice to pursue his MBA in Europe.

The world is changing, and becoming increasingly interconnected and interdependent. Having the cultural agility to move between different places, implement best practices from the world over, and evaluate the unique risks and opportunities presented by a volatile and diverse environment are essential skills for today’s managers. Among the changes brought on by globalization is the huge opportunity for business students to attend schools that will widen their horizons, open a world of career options, and give them the foundations they need to operate successfully in any corner of the globe. A post-experience MBA in particular provides a stepping stone for bridging the distance between the Western world and emerging markets.

The choice to pursue an MBA abroad is an important decision, one based on a variety of factors including long-term career goals, location and financial constraints, but for participants coming from emerging markets, this decision can have a lasting positive career impact. During an MBA program, students are exposed to international business and cultural practices that will equip and enable them to contribute to the growth of their home economies through the multi-nationals operating in their home economies and to bridge and narrow the gap between the developed nations and the emerging markets

Today, business practices are in a constant state of evolution and flux. Globalization means redefining what we do, how we do it, and on what playing field it takes place. Emerging markets especially the Big Emerging Markets (BEM) such as Brazil, China, Egypt, India, Mexico, Philippines, Poland, Russia, South Africa, Turkey and Kenya have witnessed growth at a rapid pace. This state of growth and change provides a whole new range of opportunities for entrepreneurs, investors, and business practitioners, assuming they have the knowledge and the skill-set to take advantage of these opportunities. The broad general knowledge of an MBA, combined with the global focus of a program such as ours here at ESSEC, makes participants more proficient to maneuver these changes as the opportunities for success that they are, instead of confronting them as indecipherable challenges. The more one knows about international business practices and diverse cultures, the easier it will be to grow one’s own business and career in an interconnected and globalized marketplace. Global MBA students study in France and Singapore, and visit emerging markets during their 12 month program: last year Russia, this year South Africa, plus the international immersion project which takes them into the field on consulting projects around the globe.

In addition to the obvious benefits of the knowledge and network gained during an MBA, there is also often a financial incentive involved for participants from emerging countries looking to go to well-known Western schools. Schools place a considerable premium on diversity, seeking to build connections among students from different parts of the world. This often incites them to offer scholarships to students from the BEM countries, for example, who will add a unique and valuable perspective to the whole class. It also means that the participants will understand and be sensitized to working in multi-cultural teams.

In terms of post-MBA career placement, the rise in economic growth in emerging countries, such as BEMs, means a rise in job opportunities, as well, particularly for professionals holding an MBA. Growth is occurring across sectors such as service, retail, manufacturing, and luxury businesses. And as multinationals search for growth and profitability they are attracted to these emerging countries. These companies require an efficient and competent workforce, adept and fluent in common business practices but also conscious of and conversant in local practices, language, and culture. This means that employers are often eager to hire locally, but from among a pool of local candidates who possess the skills obtained through a world-class MBA program. MBA holders with diverse backgrounds mean more competitiveness on the global playing field for companies with a multinational presence. These businesses are growing in complexity and scope, meaning they need skilled and competent leaders more than ever before.

In short, in addition to equipping a student with best practices from traditional western education and their hands-on experiential learning in emerging markets, a student who pursues their MBA outside of the emerging market that they call home adds a powerful dimension to their personal network. This circle of contacts abroad, be it cohort members, alumni, individuals met through career activities or during a job search, is an invaluable tool for launching an international career.

A Word from the Associate Dean: Women in Leadership, Women in the MBA

The discussion of women in leadership, by bringing diversity to the top-management team, today is an important one, and it is a conversation that occurs in different ways and to different effect within different locations and cultures. But regardless of the socio-cultural differences, it is impossible to deny that even in developed countries like France, gender equality is an uphill battle. In an increasingly globalized world, this is a consideration that affects all of us, as the world, especially in emerging markets, is grappling with the issue of women in leadership positions.  As Facebook CFO Sheryl Sandberg discussed in her now famous TED talk on the subject, we do not have enough women in leadership. She focused on the importance of encouraging women to “sit at the table,” to be present and to make their presence known, a challenge because studies show that women systematically underestimate their own abilities. She pushed for a real understanding of the work life balance, a supportive partnership in your at-home relationship that will allow you and your partner to be equally dedicated and engaged in the house and in the workforce.  And as for concerns about starting a family or focusing on a family, Sandberg just said, “don’t leave before you leave”. These suggestions and ideas are symptomatic of a system that makes it difficult, from early on, for women to step up and be leaders. Their voices are less likely to be heard. They are less likely to be liked if they are successful. A woman can be successful, but to do so she is going to have to confront a lot of obstacles that her male counterparts don’t need to worry about. So the way is harder. But we should all be concerned, and particularly as leaders and business schools, we should be taking steps to pave the way for the female leaders of tomorrow. If we all recognize the import and begin to make changes, perhaps the road to leadership will not be quite so hazardous for women of the next generation.

A recent study by Folkman (2011)[1] looks at the ways leadership styles differ between men and women, and the effectiveness of these leaders. They surveyed some 7,200 leaders from some of the world’s most successful and progressive organizations, interviewing peers, bosses, direct reports, and other associates.  They found, not surprisingly, that most leaders are men. And that the higher the level, the higher the percentage of men.  The more interesting data related to the strengths of female leaders, some of which corresponded to what one might stereotypically expect, and some of which veered into more stereotypically “masculine” territory. Women did excel in areas such as developing others, building relationships, engaging in self-development, and exhibiting integrity, what were labeled “nurturing” competencies. In other words, the interpersonal aspect was where the women shone. But that wasn’t all. In fact, at every level, women were rated as better overall leaders than their male counterparts. And that only became more dramatic at higher levels.  The study looked at 16 different leadership competencies, and the women took the cake in 12, including areas like “taking initiative” and “driving results” that may be considered more typically masculine traits.  So why, if the women are better leaders, more holistically competent, more respected by their peers and for all intents and purposes equally if not more capable, are the percentages not reversed? Based on the data, it seems like it might make for better led organizations. Yes, discrimination exists. Women still make only 74 cents on the dollar for what men make. Women are, as Sandberg addressed, more likely to attribute their success to external factors (I had a lot of support, I worked really hard) than men (I’m awesome) and so are less likely to jump to get credit, ask for a raise, fight for a promotion. Women still feel like they either need to choose between work and family, or are expected to at some point; “why promote a woman if she might take maternity leave in two years?” is a discriminatory and purely hypothetical question, but employers may pose it all the same.

At the recent ESSEC-hosted Council on Business and Society in Paris, ESSEC professor of Public and Private Policy Viviane de Beaufort presented a study entitled Women and their Relationship to Power: Still a Taboo or a New Corporate Governance model? She interviewed female board members, company directors, civil politicians and experts in France and abroad, asking them how they felt about their role and the particular qualities they brought to it.[i]  In conducting this study, Professor de Beaufort was struck by the omission of the word ‘power’ in women’s discourse, even women in positions of authority. Her study suggests that ambition has different meaning to women versus men, and that the battle “for power” is perceived as masculine. Fitting into and operating within a masculine model of power is a real challenge, one that can lead many women to attempt to conform rather than promoting their “unique values and their unique managerial practices.” De Beaufort summarizes, “Women should have a right to exercise power differently.” Similarly to the HBS study, Professor de Beaufort found that many more feminine qualities translate to a better managerial style: ability to listen, a capacity to more completely analyze subjects, a middle of the road perspective, keeping their ego out of the way. “It’s hard to generalize,” says Professor de Beaufort, “but we found overall that women are more frank, they have real concern about making things move forward, and they feel strongly about ethics. They place a great deal of importance on perceived legitimacy.”

As educators, as employers, as workers and individuals, we cannot be complacent. Extraordinary leadership skills are not a gender specific attribute, and we need both to encourage and to facilitate our female students’ and our female employees’ pursuit of leadership roles. A woman might be less likely to brag about her accomplishments, but that doesn’t mean she doesn’t have them. We must be attentive. We must be non-traditional. We must find innovative ways of interviewing, hiring, tasking, challenging, and evaluating results. We must be observers, not assumers. Everyone will benefit from the balance of perspectives and sense of equality that result.

And we must encourage women to take the opportunities available to them that they might not take otherwise. MBA’s, historically, have had a percentage of male participants that dramatically outweighs the percentage of female participants. As we discussed in a post on women and the MBA last year, almost half of the people who take the GMAT are women. However, they account for only about 30% of enrollment in MBA programs. This statistic holds true both in the US and abroad; in 2010-2011 in the US women earned 34% of the degrees from the top ten schools, and in the top ten non-US schools, they earned 30.7 %. While this statistic represents an improvement over the last several decades, a gender imbalance clearly still remains. Why? If women see business school as a male dominated environment, this needs to change. We must engage with female practitioners, bring in female mentors, hire and publish female professors. We must encourage female candidates for MBA’s to, as Sandberg implored, “Own your success!” There are women in business and business education. Their role needs to be more prominent, their expertise needs to be tapped, and their presence must be felt.

This isn’t to say that men and women need to be the same. There has to be a level playing field depending on the priorities of individuals. Opportunities need to be equal and the systemic bias that has excluded women from work and leadership roles, not only in developed nations but more so in emerging markets needs to be absolved.  In the workplace and in schools, we are charged with educating the leaders and managers of tomorrow, both male and female. The Global MBA of ESSEC Business School and ESSEC shares this vision, and has Chairs such as Diversity and Leadership that work on these issues. The Global MBA doubled its percentage of female participants in its second year, giving a boost to its diversity profile and gender balance in the class room. In the years to come, we hope to continue this trend, doing our part to contribute to a shift in gender equality in the workplace of tomorrow.