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A couple of weeks ago a friend of mine – a quite intellectually intimidating individual pursuing a Ph.D. at Columbia – and I (definitely less intellectually intimidating) discussed what leadership will mean in 20 years from now (this is what happens when you pursue an MBA – you get ideas). I mean, imagine that it is the year 1992. A panel of business leaders is asked to predict what success will mean in the year 2011. Some will look at top trends and see a more ‘wired world’. Others will be convinced that mid-cap companies will vanish and multinational corporations and their global brands take their place. Nobody will predict 9/11, the rise of social media or the bursting of the housing bubble. Hence, any definition of success for 2030 should not depend on trends maintaining their constancy, but on the fact that the fundamentals of success are always the same.

What is success – and we go here beyond personal success – then in 2030? 2030 will be more successful than 2011 if – and only if – more people are able to create more value for improving the lives of more individuals while producing less waste. Waste is not used here in the ecological sense. Rather, it is used to include all forms of resources and capital that must be exchanged for success to appear. In other words, the real question is: What is the price of success and can it be bought more cheaply while at the same time including more people? Can we relieve the millions of factory workers so that they can acquire more dignity in work and life, ultimately contributing to a larger notion of success that includes a broader portion of the world population and our environment? The benchmark of success in 19 years will consequently be how much richer business can make the world without stripping it of its most precious assets: its natural resources and the aspirations of its young people.

To summarize: If we have more, if globalization expands its reach to provide more and more of us with contemporary standards of living, but if this comes at the cost of even more, then we will ultimately have less. Success in 2030 will not be – as it is today – an absolute number: the absolute increase in GDP, the absolute increase in ROI, the absolute number of new products bought and sold. It will be a relative number: will the price of more for more of us go up or down? Will we, in a nutshell, become more efficient in production of wealth – while not miscounting  overlooking the intrinsic value of the sources of that wealth: the earth itself and the minds that are empowered to shape it.

What does this mean for businesses and their leaders? We are facing a paradigm shift in how companies interact with their environment and how they take care of their resources. Considering that this goes hand in hand with an internationalization of business  as workforce and natural resources will cease to exist within borders, this will bring two concepts in its wake:

Business will create to an increasing extent the conditions that surround it. Business conditions are both shaping and shaped by the perception and priorities of the leaders of business. Researchers such as London Business School professor Lynda Gratton predicts that „(…) in a future increasingly defined by innovation, the capacity to combine and connect know-how, competencies and networks will be key.“ She believes that in the future the means by which individual value is created will shift from having generalist ability to having specialist ability and achieving serial mastery as general skills will be easily replacable. This means when thinking in terms of resource efficiency, that CEOs will have yet a greater need to bring together complex systems and human resources – a broad range of specialist forces – to be able to shape their surrounding conditions. The world will become more ambigious instead of less so. In addition, management will have to call more than ever on a moral compass to make the right decisions and keep business alive. Hence information collection and evaluation will be the top priority of management, along with the ability to work through frameworks and values in order to come to the right decisions that let business and the environment any business functions in prosper.

The second priority of management in 2030 need to be centered on restructuring the basic accounting principles of the firm: Look at financial and physical capital as merely one-half of the balance sheet. Prioritize instead equally human and natural capital to seek out methods to accurately quantify and pay for its true value. Currently, we are not doing this. We tax labor but subsidize construction of roads and usage of fossil-fuel based machines and cars. We can amortize the cost of manufacturing equipment, but we consider acquisition of implicit knowledge of workers as a cost of business. This does not produce relative increases in success – but absolute ones. It lets us produce more, but one with one caveat: We are losing valuable resources by not using them efficiently, thereby reducing the overall gains we and our children could make.

In summary, if there is to be a relative measure of success in 2030 then there must be fair and consistent methods of employing and measuring all forms of capital: financial, physical, natural and human, in order to use them efficiently. There must be a fair accounting of the relative efficiency and swapability of those forms, and we must have CEOs capable of driving this development.

As I am sure that by now any reader of this blog has fallen asleep, I will return to the several bottles of wine we demolished on that night. But in case you have some thoughts on this – looking forward to your input!

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Flying back from Moscow to Munich, I am contemplating the great advantages of attending an international school such as LBS. I just finished a tour of St. Petersburg and Moscow on which I embarked with a classmate, and were hosted in Moscow by two other classmates. This is exactly why I love this school so much: The opportunity to meet individuals from a broad range of backgrounds and nationalities. I am now friends with individuals from approximately 40 different nations – for a German girl from a small hick-town in Bavaria, that’s quite an achievement.

So why is that so important? It is important as our world will grow smaller and smaller in the coming years. Product innovation and branding will be less local and more global – and a lot of that is due to the internet, which aligns global taste. This means that more companies will need to become global in their thinking, their mind-set, their taste and their processes. Values from their home countries should be kept at their core, but they will need to expand beyond this horizon. And this is where such an international crew as we are comes in: Who else to help transcend this step and assist companies with becoming truly global.

Which brings me to my most important learning of Russia. It is not true that all Russians drink vodka. In fact, neither of my classmates does. Which means that I didn’t drink any vodka in Russia. But I am hopeful that my British classmates will help me out next time I see them…

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Duncan Chapple, LBS alumni and owner of extraordinary analyst relation agency Lighthouse, forwarded this week an article stating that at least at the University of Nairobi, women crowd men out of classrooms when it comes to doing an MBA. Admittedly, the article wasn’t featured in the NYT, but it’s amusing that Africa seems to be ahead of Europe and the United States for once:

While the credibility of this article is somewhat shaky, I would like to throw the question out there if we do need more women in MBA classes. Or, on the other hand, what is keeping us women from doing an MBA? It’s especially strange given that year after year more women than men complete successfully their undergraduate degrees. So what’s happening in-between? Are we just falling off the bandwaggon? Are we not able to embrace power as we are so in touch with our feminine side (I am not, it seems)? I believe that the major reason for only 27% of women in the average MBA class at LBS are due to:

Women are afraid of the financial investment. It’s hard to carry this kind of debt around, especially if you are not already a high-flying executive, but somewhere in the middle of the ladder.

Women also have to have children at some point around their 40ieth birthday – exactly the time when you would be doing an MBA. People like my classmate Elizabeth Boudreau who does the MBA while raising two little girls have my admiration. My plants didn’t survive the fact that I was doing an Exec MBA and worked full-time.

I wonder if there is still a social stigma around a highly educated woman. I can’t count the times anymore I heard especially in Germany: But you will be overqualified then. Seriously, „overqualified“ is the worst word I ever heard. Quite a row of my female friends also feel that at some point they are better off supporting their husbands’ careers than pursuing their own careers.

Last, but not least, could it be that companies simply don’t want to deal with women in executive positions? Germany is actually a pretty good example, it’s hard for a woman to get onto a executive board. German companies shy away from outlandish things such as providing childcare. Much better to have a sound state system that pays mothers to stay at home and lament that we have a dearth of professionals.

All considered, I am inclined to think that we don’t need „just“ more women in MBA classes, I think we need more women who are as fed up as I am with clichés and go for what they want to do with their lives. I am convinced that attending LBS has been the single best idea in my life, as this experience has opened so many new venues for me. Two years ago, I would have never quit my job to start my own consultancy. This MBA has given me insight, know-how and self-confidence. But I admit that it’s not for the faint-hearted. So what is your opinion on this question? Are you ready to take on an MBA and go for what you want to do with your life?

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David Mitchell, a noted expert and speaker on brands, forwarded me yesterday his latest blog post entitled „MBA: Mediocre but Arrogant?“. This one was new to me, having heard before only „Married but Available“ (all MBA consorts, don’t listen – all MBAs: please forward me other interpretations). David picked up on his interpretation at a high-calibre dinner where a C-suite speaker was making fun of MBAs. In David’s kind view, though, MBAs are anything but mediocre (he remained impressed by the calibre of people he met when recently lecturing at LBS). He says, however, that MBAs might come across as arrogant, as they are for the most part people with a clear sense of the direction in which they are going. However, if you remove all empathy and understanding of other people, this might easily come across as arrogant. You can check his blog out here:

I commented then that I would agree with the latter part – we might come across as arrogant – but that to some part the „mediocre“ is also true. No, don’t get all cross with me. I include myself in that category, too (although David kindly disagreed). What I want to say is that it’s not always the brightest kid in the room who gets the CEO position. What I see time and again is that being good at your job might get you stuck. Again, I am not proposing that we deliver sub-standard work. But I advocate that while spending 95% on your job (and doing it well!), that the remaining 5% should be spent networking. You might do the greatest job in the world, but if only your boss knows about it and has no interest in promoting you, you will get stuck. This means: Get out of your office and in front of people. Especially your bosses’ boss. I know that this is not always easy, given that these people only want to spend time with more important people. But think of ways, and if it’s only through finding out the guy’s or lady’s favourite coffee and chocolate through their secretary and showing up in their office one morning. Trust me, it works!

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Aiming higher

Posted by: Gudrun

I am currently sitting in an airplane which brings me from Munich to London for an elective. While I should be a good girl and do the readings for the upcoming course, I instead took to my PC to issue some random musings on business. To be more concise, some musings on the responsibility of business. I am currently working with a company on improving the relationships of their salesforce with retailers. Having watched over the past days – I hate to say it – shark-like sales guys honing in on mom-and-pop stores and pushing sales, I was moved to muse about the responsibility of business (and trust me, I am not often inclined towards such inner musings).

It is incredible how often companies underestimate the need to invest in people and relationships. Now is a time to invest, truly and authentically, in employees, in partners, in our corporate responsibility and in our communities. Coming out of a recession and being faced with a disastrous situation in Japan – of which we don’t know yet the impact on the global economy – the argument and opportunity for companies to invest has never been more compelling. In addition, if you check out the research of our Marketing professor Nirmalya Kumar, you will see that trust relationship are also worthwhile in financial terms. I am hoping that each single LBS student when faced with a similar situation would find it in himself and herself to stand up and take a stance. Guys, it’s not about being part of a group, it’s about being a pace-setter. You do have a responsibility as managers, and you should be aware of it.

Which brings me back to my client: I had a row of meetings with their executives this past Friday, discussing how and at what time starting to introduce a mindset change. They recognized that the one-way relationships they have hurt their sales and hurt their dealer network. This will cost them a lot, though. We will need to go in there and reform the values, incentives, bonuses, and overall thinking of their salesforce. I do firmly believe that the effort will be worth their while at the end of the tunnel. But, LBS community, I would implore you to always aim higher, defy group thinking if necessary, and do what’s right (but make sure that it will make money – we are not stupid, after all).

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Another four months to go…

Posted by: Gudrun
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As an Executive MBA, life tends to get tough. After a while, the allure of finalizing assignments at 3.00 a.m. and then getting up for work at 6.00 a.m. sizzles out. But does it? My class is by now attending its last rounds of electives, and there is one common feeling between us: Sadness. This MBA has taken us on a rollercoaster ride, and we simply want more of it. Unfortunately, our requests to the program office to prolong the program for another year have been declined.

Why is this program so addictive? We are all experienced hires with several years of experience under our belts. After having put in that many years of work, it’s been so refreshing to be able to stretch our minds and learn about having fun while doing business. The side-effects of this are considerable: A lot of people have left their jobs in order to start their own business or accepted positions in sectors they are not familiar with. I, for instance, am working on getting funding with a classmate in order to start our own marketing consultancy for technology companies. Without the MBA, all of us would have continued as usual. And this is why London Business School is so great: It really opens your mind to new avenues and gives you the tools that enable you to explore these avenues.

Oh, and partying in Dubai, Munich, London, Kitzbühel and Turin helps, too. We call this networking, by the way.

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