There are these ‘Big Idea’ sessions being run at the upcoming Global Leadership Summit. I’m looking forward to these; I think these could potentially be the most interesting sessions of the Summit. They’re covering topics such as future leadership, consumer influence, and the ‘practical priorities for practitioners and policy makers’ (have a look at the Summit programme for the full list of Big Ideas).
It’s this last Big Idea that I would like to discuss today. I don’t know what angle the panel will take on this topic. But I want to focus on the practicalities of legislation and regulations. Prior to London Business School, I worked as a lawyer in Wellington, the home of the Government and State departments in New Zealand (and it’s the coolest little capital in the world). In my time there I saw a lot of bills in progress and passed legislation come across my desk. It never really surprised me if new legislation was over a ream of paper thick, though I admit I didn’t enjoy the subsequent period of trying to decipher the new legislation.
I looked at legislation covering a broad range of topics, from tax through to climate change. Inevitably, they all read like pick-a-path novels, where you would constantly flip back and forth between pages, referring to other sections cited. Often I would end up with multiple fingers in the pages holding open various parts of the Act.
This legislation created in New Zealand is nothing unique. All over the world, and here in Britain, policy makers are creating these Byzantine laws that are becoming more and more difficult to understand. As a result, it takes teams of expensive lawyers, accountants, and consultants to pore through these tomes deciphering what was intended. Even with these teams of experts, it’s often difficult to decide what is allowed and what is not.
But do the policy makers realise what they are creating? The politicians who stand up in parliament and spout media friendly sound bites make their policies sound so simple. And they are relatively straightforward propositions at that stage. Then reality sets in when these policies are handed to legislative writers to create and these sound bites are turned into thousand page epics. Do these politicians ever then pick up these Acts again to understand the monsters they’ve created? I suspect not.
There are often good reasons for these Acts to be so complex. Legislators want to avoid loopholes and cover off every eventuality. As businesses innovate and these new loopholes become apparent, even more additions to the legislation are required. This is how tax laws have become so frustratingly large. Or it may be that while a concept sounds relatively simple – carbon credits for example – the practicalities of setting out how it actually works are overly complex.
So is there a solution? Some law firms have moved towards ‘plain writing’. Perhaps legislators could adopt some of these writing principles. That would be a start but it certainly wouldn’t be the solution; it wouldn’t resolve the pick-a-path nature of these Acts.
Instead, I imagine a world in the future where legislators write executive summaries, draw diagrams, give examples, and include quotes from policy makers in the Act itself. Already this is happening in some jurisdictions where bulletins supplement the Act and are interpreted as law (for example, the Tax Information Bulletins issued by the NZ Inland Revenue Department).
Alternatively, legislators could make the principle of the Act clear – keeping the Act short and readable by the majority of the population (think something like an expanded upon version of the 10 commandments) – and then leave it for the Courts and people’s judgment to decide what is correct. Many lawyers and businessmen would be up in arms at the ambiguity created. And this is exactly the reaction that this approach should create – if you are falling into the grey area of the law, then chances are you shouldn’t be doing it (but the law won’t stop you immediately if you are prepared to take test the boundaries).
These two approaches would be a drastic change from convention – a word that that legislators romanticise over. But in the world we now live, the excuse that it has always been done that way should no longer be acceptable. Business people are used to reading executive summaries, not thousand page documents. And they say a picture is worth a thousand words; I certainly have found diagrams useful in understanding various concepts.
I don’t think either of these approaches are perfect. But they do start to deal with the practicalities of business. Something that seems to have been forgotten about by policy makers in Britain and many other places around the globe.
I look forward to the discussion of this Big Idea at the London Business School Global Leadership Summit.
One of the topics being discussed at the upcoming LBS Global Leadership Summit is the demand for big businesses to think beyond the needs of their shareholders and for them to become responsible world citizens.
Recent world events certainly demonstrate the backlash that can occur when companies appear to put profits ahead of people. Companies, such as Primark, who had their products manufactured at the Rana Plaza factory in Bangladesh came under the spotlight when the building collapsed, killing hundred of workers. BP also felt the heat after its Deepwater Horizon drilling rig exploded and leaked millions of barrels of oil into the Gulf of Mexico. And Foxconn’s practices in China have dragged Apple’s name into discussions of corporate social responsibility (CSR).
CSR initiatives can act as a good publicity campaign and PR for a company. Many companies donate a percentage of profits to charities or offer employees a day to work for a charity. While these initiatives may send warm fuzzy feelings to employees and consumers, are they actually having much of an impact? No doubt the receiving charities very much appreciate the donations and the good publicity probably helps companies bottom line. But these types of CSR initiatives are not going to stop oil spills, factories falling down, and employees jumping from windows.
So what does it mean to be a good world citizen? I think it is taking into consideration all your immediate stakeholders: your shareholders, employees, contractors, suppliers and customers. But the web of stakeholders doesn’t end there; it should include anyone and anything who is and could be impacted by your business. For example, BP should have been considering the families, the wildlife and the environment along the coastline of the Gulf of Mexico who would be at risk from an oil spill.
As you can see, the list of stakeholders can quickly grow. And when you start thinking of possible worst-case scenarios, the list continues to multiply. A multinational company would need to take into consideration a vast number of people and possible outcomes, some who might actually never be affected by the company. Put simply, for a multinational company to be a good world citizen is a Herculean task.
Then, even when a company tries to get it all right, it can still go horribly wrong. Tesco supposedly had rigorous checks on its suppliers but that didn’t stop products being tainted with horse meat.
Perhaps then, CSR initiatives by a company are like an insurance policy – not just for the company, but for all the stakeholders involved. Ideally you would insure against every eventuality, but the premiums are too high and so you must be pragmatic in what you insure against. So too, a good corporate citizen can’t be expected to stop all risks, especially the most remote, from occurring. There will be some things that slip through the cracks. When you’re a multinational company with innumerable activities happening, it’s only a matter of time before something happens that your CSR initiatives haven’t covered.
The most difficult question then is, what level of insurance (or CSR initiatives) should a company take? Not all companies want to be world citizens. And who should decide that level – the company itself, an industry body, the regulators, or consumers?
I’m looking forward to hearing these questions being addressed by the CEOs of Unilever and Deloitte UK at the upcoming LBS Global Leadership Summit.
Perhaps if the banks had undertaken some more CSR activities, or the regulators had insisted upon them, the global financial crisis would have been prevented from happening.
As the LBS Global Leadership Summit approaches, I’m blogging about my thoughts on the various topics being discussed (for more info on the Summit, head here: gls.london.edu). I’m particularly interested in hearing Gina Qiao, SVP at Lenovo, and her take on the BRIC countries and companies in the global economy.
Studying at a university in the West and having worked at companies headquartered in the West, I’ve often heard of the challenges of Western companies entering foreign markets. The BRICs – probably due to their size – are talked about the most frequently. Through LBS, I’ve had the opportunity to travel to both India and China and get a better understanding of these markets. No doubt about it, many Western companies struggle adapting their business models to these countries. There’s a long list of companies that have attempted and failed. I recently listened to Global MD of McKinsey, Dominic Barton, talk about the average time for a Western company to become profitable in China: approximately seven years. That’s a sure sign that the BRICs are no easy markets to enter.
But why is that? On the surface, the human race appears so similar: no matter which country you look to, consumerism has taken hold. But if consumers’ desires for goods are universal, why is it so difficult for foreign companies to get right? Can it really be that hard to learn the unique tastes of consumers in BRIC countries? The evidence and experience certainly suggests so.
Now, flip this perspective on its head. What must life be like for the BRIC companies that have expanded into the West? What conversations are their executives having about consumer research and product positions? There’s no shortage of BRIC companies that are attempting to expand into Western companies: Tata, Lenovo, Natura Cosméticos, Haier, to name a few. Surely they must be having the same challenges that Western companies have: I haven’t yet set a Tata car driving around London.
Much has already been written on how BRIC countries can successfully compete in the West. For example, BRIC countries have cheap labour and manufacturing located close to home and can expand into countries similar to their own (that Western countries could not as easily do). But these are just first steps; a dip of their toes in the waters of expansionism. To truly go global, BRIC companies must overcome greater distances and larger cultural differences. Arguably, they have an even tougher job overcoming the prejudice in Western countries about brands from BRIC countries.
Think of your first imaginations of these foreign countries and then imagine what theirs are of ours. Britain is perhaps viewed as a country of period costume wearers, newspaper readers, football hooligans, church going Christians, who eat bangers and mash and complain about the weather. A marketer sitting in Beijing or Sao Paolo could be thinking this – and there is some truth in there. But to take that as the complete truth would be to completely misunderstand Britain. And this is where the challenge is – in understanding a country from a local’s perspective.
Companies in both the West and in the BRIC countries (and everywhere else too) must bridge these cultural divides. They are making efforts to learn. Some are setting up innovation centers in these foreign countries to learn through research and development, others are partnering with, or acquiring, local companies to learn from people already knowledgeable in the local market.
I wonder why it’s taken this long to achieve only this much. Surely in a more globalised world, it should be becoming quicker and easier to understand cultural differences. I believe there must be a better way of overcoming these cultural barriers. Already in a short time, BRIC companies have shown their ability to grow and expand overseas. Perhaps at this speed they will also discover the secret to understanding and delivering on the desires of consumers from all cultures. It may be just a short time until the BRIC companies are setting the standard for how companies (both Western and Eastern) become successful multinational corporations.
Three and a half months sounds like a short time. Think back over your last three and a half months. It went by pretty fast, didn’t it?
Tomorrow, I wake up in Shanghai at the start of three and a half months there on exchange. I expect at the end of my time there I will wonder how it’s gone so fast. But now, as I think of the 110 days I will spend in the Middle Kingdom, it seems anything but short. I imagine my first day; explaining to the taxi driver where to go, struggling to open a bank account, get a pre-paid sim card, order food from a non-picture menu. Don’t get me wrong, I am incredibly looking forward to the experience. In fact, it’s because of all these little interactions that I’m more excited.
Previously, I had been thinking of this as one great big experience. And that is true, but it’s also an enormous series of small, individual events too. Events that need to be swilled around in the mouth, reflected upon and savoured, like a fine wine. Because otherwise it can all go past so quickly and you are then faced with looking back at what you know was a great time, but what is also a hazy jumble of fused events.
As the 2014s start their MBA’s, I offer them my advice: savour everything you do. Take the time to reflect on that lecture, the party, that conference, the job interview. Recall the emotions, the vibe. Remember who was there, what was said… what the weather was like, the smell in the air, the song that was stuck in your head. Let those memories form; if you do, they will solidify with time. Then, when you look back and wonder where the time went, you will be able to answer yourself.
I think that is definitely worth doing. And I hope to do the same on exchange.
In decades to come, people will look back on this time in history and they will ask where you were in the heyday of the internet. You might say something like Silicon Roundabout or Silicon Alley, but those names, that use of Silicon in the title is misleading at best – traitorous at worst; Silicon Valley is the heart where the action lies. Like the days of the goldrush, there is only one true place to be, to be amongst the revolution, in the middle of the action, and that place is San Francisco (or just down the road in the Valley).
And that is where the intrepid travellers of the LBS Tech Trek headed for Spring Break. We set off with our pickaxes and pans, or rather, our iPads and styluses to visit the companies setting the trends for the interweb. Who did we visit you ask? A rock star list of: Google, Twitter, Linkedin, Zynga, Dropbox, Kleiner Perkins, Tesla, 500 Startups, and more.
It was an interesting and eye-opening experience visiting these companies. It is not until you enter the Valley that you start to understand the vibe that reverberates up and down State Highway 101 and around the offices, shops, cafes and homes in the Valley. Conversations in every coffee shop, every restaurant, every street corner mention something about coding, user experience, venture funding or some variant thereof. As it was explained to us more than once, the Valley is a hotbed of innovation that does not so much move through cycles, as it does leap and bound through them. Companies can bounce ideas around, fail, and pivot to new ideas and business models faster than anywhere else possible.
And there lies the second common message shared with us: the acceptability of failure. It is acceptable, nay, it is almost a rite of passage to have failed; risks must be taken to discover what is achievable. Can Silicon Valley be replicated in other parts of the world? We received mix perspectives on this, but it was universally agreed that a prerequisite is that the culture of failure was a necessary building block that would have to be copied. Will it happen? It takes quite a heroic effort to change one’s mindset from risk-averseness to investing in inherently risky ideas. We shall see.
It is a remarkable place and an incredible experience.
A quick nod to the company offices themselves, afterall, the perks received at these companies are legendary. And sure enough, they did not disappoint: Google has a beach volleyball court taking center stage at their offices. But that was only the initial taster we saw; across the companies we visited there were company bikes to ride between office buildings, scooters to glide between office rooms, meeting rooms stacked high with lego, band rooms filled with guitars and drums, m&m dispensers, a coke machines that poured over 100 flavours, and of course the obligatory ping pong table.
There’s no doubt about it that LBS is a culturally diverse place. I know the statistics get thrown around a lot, something like 90% of students are from outside of Britain and represent around half the world’s countries. Whatever exactly those statistics are, there is nothing quite like being distanced from your home country to heighten your desire to identify with that place.
I look at my fellow kiwis in Britain, and the patriotism – or at the least the desire to identify with New Zealand stereotypes – is unlike anything ever seen back home. There is suddenly a huge desire to watch every All Blacks game no matter the hour of the day, to celebrate Waitangi Day (the closet we come to having a national day), and to dress in all manner of clothing with New Zealand iconography, whether that be an All Blacks jersey or a sheep costume.
To harness all this excitement about our own cultures, and our desire to show it off to others, LBS organises ‘Tattoo’. An evening celebrating the different cultures on campus through food stalls, song and dance, and a fashion show.
And what an evening it was! I arrived nice and early as I wanted to gorge myself on food by eating my way around the world. And I preceded to do exactly that – first up the North American stall with a big fat pig roast! Japan for sushi. China for Peking duck. Thailand, Malaysia, Singapore. Then Brazil, and the rest of South America. Iran. Israel. Back to Brazil. Hungary, Turkey. And then finally back to the Australia/New Zealand stall to finish it all off with some pavlova; the debate as to which country invented it first being put to the side for the evening.
Between all this eating and long after my belly was stuffed full, we watched the main event unfold; the Tattoo talent show. And the talent really was incredible. Every country up on stage getting their groove on in some form or another: the Chinese dragons dancing to LMFAO (my personal favourite), the Americans hip-hopping to MC Hammer, the Brazilians getting their salsa on, the Italians singing opera, and many more. Not to mention a loud and fearsome haka performed by the New Zealanders!
I am staying focused. Like a monk trained in on his breathe exhaling, or perhaps, more apt, the athlete envisioning his actions before the big game. I iron my shirt; cotton press, a squirt of water to rid that stubborn crease. I select my tie; yellow with a confident red stripe, tied in a half Windsor. I place my cufflinks through their holes, the right first, then the left; a pair of silver foxes. I slip my arms through the jacket sleeves. Check. Looking good. It’s winter; I choose a grey striped scarf and wrap it around my neck. Good. I grab my coat and throw my satchel over my shoulder. I hear the door shut as I leave the house. I briefly look down at my shoes; freshly polished. I then turn my head up and walk towards my interview… and my destiny.
I can almost see this playing out as a video montage set to Eye of the Tiger. That, or a stand in for the American Psycho intro. But the former sounds much better.
The preparation is now complete. Many hours were toiled away in the first term refining the CV to stand out and succinctly convey our best qualities. We were assisted with the experience of the second year students both formally through the Peer Leadership Programme and informally over cup of coffees. Career Services reviewed them too and then followed up with drop in sessions to complete the tailoring to near perfection.
The cover letters came next. Picking our skills and attributes that would define us as being unique. Carefully tailoring each to specify why we so desired to work for that particular company. The irony was lost somewhere around Christmas that every company we applied to was the company we most wished to work for. Again, the second years and Career Services assisted. This time too, we had the company presentations to rely on. Each telling us why they were different from all their competitors – each stating the same or similar reasons to their competitors.
With these company presentations came the opportunity to network. To meet real flesh and blood employees. Perhaps with the hope of making that impression that could land you an interview job, or at the very least, some additional information to further make that cover letter stand out.
And finally, the interview preparation. Many hours hidden away in the recesses of the library or study rooms, making sure we knew our finest achievements, the best examples of leadership and teamwork, and crushing cases that may be thrown at us. Second years grilled us with difficult questions, career services advised us and ran various workshops, our classmates rallied questions back and forth as practice.
But now, all that preparation is over. I walk into the office. I greet the receptionist. I wait, and then greet the HR representative. I enter the den. There is nothing left separating me from the battle with the beast. The interviewer enters. The door closes. It all begins here.
I’m now four from eight.
That first email that comes through offering you an interview is an incredible confidence boost. You finally realize that firms don’t all start their emails with “Thank you for your application. However…” Your foot is in the door, quite literally in some cases when firms host interviews at their offices. But again, a reality check quickly follows. Afterall, this is only a foot in the door; we’ve been reminded numerous times that this is only the first step along a tough and merciless road (nevertheless, a significant step, that could, I feel, be measured in comparable size to those taken by Neil Armstrong). We’ve been culled down to a select few for the first interview. Following that an even more ruthless cut will ensue, succeeded by a minority who are left standing at the end. It sounds like something even Gordon Gekko would be challenged at.
A series of interviews now face me. But what does a consulting interview comprise of? The core is the case problem. These usually start with the premise that the CEO has asked for your advice to solve their problem, whether that be falling profits, market entry, a potential merger, or some other scenario. Your role, no, your duty, is to identify the crux of the issue and resolve it in the short space of 30 minutes or so.
So how does an MBA student prepare when one has succeeded at making it to this first round? Thankfully, it is not too hard, it just requires persistence. You must first turn your head and open your eyes to see all the hopeful study partners all around. I am immensely appreciative for the collaborative and constructive help of my fellow classmates. They, like you, are wanting to succeed. And perhaps in the most illustrative example of a ‘win-win’ scenario, you buddy up and test each other on sample cases. And you do this until you are verging on being repulsed by their company and constructive feedback. You wonder if you even want to be a consultant after you have long forgotten and given up counting the number of cases you have burned through. In these weeks of recruitment you will see the best and worst of your classmates – the built up pressure and stress in their frayed nerves and short tempers, the highs from crushing a case, the lows from screwing up the maths worse than their thirteen year-old cousin. Don’t forget, they see the same in you.
And through all this, you strengthen those connections with your classmates; an incredibly perverse bonding experience.
Now bring it on.
It was around a year ago that I received my first ding from business schools. It didn’t cross my mind that I would be going through a similar process a year later; I received my first ding of summer recruitment today.
The last two weeks has been an intense experience with recruiters coming to campus everyday to convince us that we should want to work for them. Some have an easier job than others – the lecture theatre for facebook’s presentation was packed to the gills. And for us, we’ve been performing our finest foxtrots and getting our goosesteps on playing the dreaded ‘n’ game – networking. Everyone has been flailing around (some with the poise of Harry Judd, others looking more like they were born with two left feet) to see if we can stick in the minds of recruiters long enough that perhaps they’ll recall our name as they scan through a pile of CVs that looks more epic than Tolstoy’s War and Peace.
We were warned early on that around this time everyone would go a little crazy as people received interview and job offers, while the rest of us were passed on and continued our search. Perhaps I was naive, but I thought I could pass through this period unperturbed by the offers that classmates were receiving. After all, pretty much everyone does end up with a summer internship of some description. What I didn’t count on is the feeling of seeing classmates getting acceptances and walking to interviews for jobs that I had applied for. It’s a blow to your confidence as you wonder what talents or magical CVs other people possessed.
Good on them for succeeding. But I am a tiny bit jealous. Just a tad.
Stay tuned for more highs and lows of summer recruitment.
P.S. It turns out that dings two and three cut even deeper.