Winter 2009

ISSUE 16: INTELLIGENT STRATEGY. CORPORATE REPUTATION: THE COMPANY YOU KEEP. Q&A: PANKAJ GHEMAWAT, AUTHOR OF REDEFINING GLOBAL STRATEGY. BUSINESS AND SOCIETY: MOVING ON FROM THE ‘R’ WORD. LESSONS FROM MILITARY STRATEGY: CORPORATE COMBAT. VIEWPOINT: SUCCESS STORIES.

BUSINESS AT

THE MAGAZINE OF THE SAID BUSINESS SCHOOL

INTELLIGENT STRATEGY CONTENTS

03 the Dean’s preface 10 business as usual 27 Diary: not to be missed

11 mba project: In the dragon’s den 28 PUBLIC SERVICES STRATEGY: CORPORATE REPUTATION: 04 together we can THE COMPANY YOU KEEP 12 Q&A: PANKAJ GHEMAWAT, AUTHOR OF REDEFINING GLOBAL STRATEGY 30 alumni: fast forward

BUSINESS AND SOCIETY: Alumni: sitting room safari 14 MOVING ON FROM THE ‘R’ WORD 33

07 business as usual

TEACHING Strategy: 08 SHOW BUSINESS 17 Working knowledge 34 VIEWPOINT: success stories 18 Alumni: Mongolian meeting

19 hot question: Are there rules to riches? 20 LESSONS FROM MILITARY STRATEGY: CorporatE combat

The Dean’s preface: Colin Mayer

he strategy group at the Saïd (page 34). Professor Andrew Pettigrew OBE, for the first time (page 10).T he Diploma is Business School is going from formerly Dean of the School of Management designed to enhance managers’ ability to strength to strength. Over at the University of Bath, looks at ways to take effective strategic decisions in today’s T the past year, a series of new reframe the relationship between business global business environment and to innovate appointments has consolidated the group’s and society (page 14). for competitive advantage. It considers 23 Alumni: green cuisine innovative approach to teaching and This academic year has seen the strategy processes, decision making, research, which emphasises interdisciplinary launch of a new seminar series in strategy, innovation strategy, emergent markets, 24 Entrepreneurship: 10,000 women and cross-disciplinary approaches to strategy sponsored by McKinsey. Speakers in reputation management, and building and challenges common wisdom about the Michaelmas term included Nitin Nohria, organisational capabilities, among determinants of strategic success. These Professor of Business Administration at other subjects. approaches are particularly pertinent at a Harvard Business School, who talked about Our alumni (pages 18, 23 and 30–33) time when the limitations of mechanistic, the evolution of leadership, past, present continue to be a testament to the ability short-term profit-making approaches are and future (page 10); and Pankaj of sophisticated management education to painfully apparent. Ghemawat, Professor of Global Strategy at prepare individuals to innovate, to achieve This issue of Business at Oxford features IESE Business School, who gave a seminar transformational change, and to contribute contributions from three new professors who on crossing borders in a world where constructively to the societies in which they have joined the strategy group, as well as difference still matters (see page 12). operate. Through our strategy education and from existing members of faculty. Professor Speakers lined up for Hilary term include research, we are able to have a powerful and Mike Barnett, who joined the School from Rakesh Khurana, Marvin Bower Professor positive impact on the business leaders and Production Enquiries or submissions No part of this publication may be reproduced, the University of South Florida, seeks to of Leadership Development at Harvard entrepreneurs of the present and future. Editor: Anthea Milnes should be addressed to: stored in a retrieval system, or transmitted, in any understand the influence of communal and Business School, who will deliver his Liz Buckle form or by any means, without the prior permission 16 Design Marketing and Communications in writing of the publisher, nor may it be issued to reputational mechanisms on the decisions talk: The Failure of Business Education SampsonMay Saïd Business School the public or circulated in any form of binding or that managers make and the outcomes for in the 20th Century: Implications for www.sampsonmay.com Park End Street cover other than that in which it is published. firms, industries, and stakeholders over Leadership, Business and the 21st Century. Oxford OX1 1HP Stock United Kingdom © 2010 Saïd Business School. All rights reserved. E&OE. time (page 4). Professor Jerker Denrell, who The School’s executive education Business at Oxford is printed on joined the School from Stanford Graduate offerings have been updated to reflect and FSC-certified environmentally Tel: +44 (0)1865 288852 friendly paper. Fax: +44 (0)1865 288850 School of Business, suggests in an article draw on the School’s increased strength in [email protected] on “success stories” that there is no direct strategy. In April 2010, the third in a series www.sbs.oxford.edu correlation between good management of open-enrolment qualifications, the Oxford practice and the performance of companies Diploma in Strategy and Innovation, will run

02 Business at Oxford INTELLIGENT STRATEGY Dean’s preface issue 16: Winter 2009 03 “EXAMPLES ABOUND OF COMMUNITIES THAT HAVE SUCCESSFULLY MAINTAINED PUBLIC GOODS. NOBEL LAUREATE ELINOR OSTROM HAS DEVOTED HER CAREER TO EXPLAINING HOW PEOPLE SELF-ORGANISE TO PROTECT A VARIETY OF PUBLIC RESOURCES. IN A RECENT STUDY WE FOUND THAT, LIKEWISE, FIRMS CAN SELF-ORGANISE TO PROTECT THE REPUTATION THEY HOLD IN COMMON.”

s your parents might have broad swathe of firms. A delayed or cancelled cent drop in the market value of a portfolio The warned you, choose your flight can put you off future airline travel and of 50 rival firm stocks. Following theT ylenol friends wisely because their push you into greater reliance on rail, coach, tampering incident in the US in 1982, A behaviours reflect on you. or car travel. Buying a “lemon” once may the owners of Tylenol, Johnson & Johnson, If you hang around with a pack of hooligans, cause a permanent aversion to used car lost US$2.11 billion in market value, but the hooligan or not you’ll be branded as such. purchases. These types of situations, in over-the-counter pharmaceutical industry Companies, too, are judged by the company which one firm’s actions can degrade the lost about US$4.06 billion. Airplane crashes, they keep. Entire industries have been prospects of other firms in the same market, petrochemical spills, car recalls, earnings punished for the sins of one or a few we term reputation commons problems. restatements, near nuclear meltdowns, and members. This creates some interesting In effect, firms across an industry share so forth – often the fault of a single firm – company management challenges. Companies cannot a commons constituted of their collective have damaging consequences for entire you keep directly choose their industry associates – it standing in the eyes of observers – their industries. would be a violation of antitrust laws to block shared reputation. As with the physical We theorise that reputation commons By: Michael L. Barnett a rival firm from conducting business. Yet commons problems, such as over-exploitation problems arise due to inadequate each firm’s fate depends upon the behaviour of public lands and waters, the actions of information provision. Observers lack the MIKE Barnett looks at how companies of other firms in its industry. How do firms a few can damage the good held in common information, or at least desire, to determine strategically manage this interdependence? by the many. if the problem is unique to the offending can work together to protect the Studies have demonstrated the firm or endemic to all firms of the same type. reputation of their sector. The reputation commons problem existence of these sorts of problems across They then respond in ways that affect entire A memorable experience with one firm can a range of industries. A drug recall by one industries. For example, after the near influence how you feel about and relate to a pharmaceutical firm precipitated a one per meltdown of one reactor at one facility of

04 Business at Oxford CORPORATE REPUTATION CORPORATE REPUTATION issue 16: Winter 2009 05 one nuclear power company at Three Mile incentive to harvest as many fish as possible to stock price declines in other chemical individually rather than as a homogenous Island in 1979, all nuclear power plants in from the common lake; draw as much firms. From 1980 to 1984, there were mass. In effect, this information provision the US, regardless of their safety procedures, water as desired from the common well; measurable but minor spill over effects. built “mental fences” in the minds of Business as Usual were subjected to much stricter regulation raise as much livestock as possible on the At the end of 1984, the Bhopal disaster observers that parcelled the industry’s and have been unable to build new facilities local grazing land. Unless public goods occurred. Thereafter, these spill overs reputation into firm-level plots. Moreover, RESEARCHING CORPORATE REPUTATION ever since. are privatised – access rights to the lake became significantly more severe. these mental fences kept the problems Regulators are not the only ones who use or the well sold, parcels of grazing land sold The industry recognised their common of each firm from spilling out across the Professor Mike Barnett joined the Oxford a broad brush to tar entire industries for the and fenced off – then these resources will problem and worked together to create industry. University Centre for Corporate Reputation sins of a few. The labour force shied away be depleted. a voluntary self-regulatory programme Firms still could not hide from their at the Saïd Business School as its Research from the chemical industry in the aftermath Despite this logic, examples abound called Responsible Care. After the own problems – we found that they suffered Director in October 2009. Under his of the disastrous poison gas leak of Union of communities that have successfully programme’s full implementation in a similar level of stock price decline in direction, researchers associated with the Carbide in Bhopal, India, in 1984. Surely maintained public goods. Nobel Laureate 1990, these spill over effects returned to response to their own accidents before centre are currently working on fourteen banking has lost some of its lustre as a career Elinor Ostrom has devoted her career to the relatively minor levels present before and after Responsible Care. But they were projects investigating different aspects of option more recently. Consumers, suppliers, explaining how people self-organise to protect the Bhopal disaster. collectively better off because they were less corporate reputation. and partners may hesitate to do business a variety of public resources. In a recently How did this self-regulatory programme exposed to the missteps of their rivals. They One such project is exploring the lengths with entire industries stigmatised by the bad published study, we found that, likewise, resolve the reputation commons problem? came together to stand apart, enabling them that international companies will go to acts of a few. firms can successfully self-organise to We hypothesise that the key to its to be judged more by their own actions and in order to protect their reputations. The protect the reputation they hold in common. effectiveness was information provision. less by the company they keep. study, entitled “Made in China: Corporate Teaming up to build mental fences The US-based chemical industry, To overcome the “chemophobia” that set Strategies for Protecting Reputation”, Long-held theories of commons problems over the period 1980 to 2000, provides a in after the Bhopal disaster, chemical plants looks at the information strategies that offer little hope of resolution. They surmise natural experiment for reputation commons opened their doors and showed locals, Michael L. Barnett is Professor of Strategy at firms use to influence public perception that the pursuit of self-interest necessarily problems and their resolution. We measured regulators, emergency officials, and the the Saïd Business School, Research Director and at policy responses to concerns over leads to “the tragedy of the commons” the degree to which an industrial accident media how things worked. Thereafter, of the Oxford University Centre for Corporate Chinese products. Dana Brown, Lecturer in for public goods. People have a dominant attributed to any single chemical firm led observers began to treat chemical plants Reputation, and a Fellow of St Anne’s College. International Business, explores how firms lobby on the image of Chinese products and labour conditions, and the variety of information strategies that are employed. Understanding the role of business journalists in creating and influencing corporate reputation is the focus of research undertaken by Jonathan Silberstein-Loeb, a Research Fellow with the Centre. “Business Journalism and Corporate Reputation in Europe” is a comparative study of business journalism throughout Europe and investigates the corporate belief that business journalism affects their reputation. The research will examine the extent to which business journalism and corporate reputation are market mechanisms that serve quasi self-regulatory functions. Using the 2012 Olympic Games as an example of a major programme, a further research project is evaluating key questions on the intersections between the three areas of corporate (stakeholder) reputation, major programme management and programme failure. The research project, “The Impact of Major Programme Failure on Corporate Reputation” investigates the extent to which public bodies and corporations anticipate the likely onset of programme setbacks and failures and the damage limitation methods employed. Dr Janet Smart and Dr Kasim Randerjee of the BT Centre for Major Programme Management at the Saïd Business School will also question how the clients and customers of a corporate body involved in a failing programme take action to protect themselves from reputational damage. The Oxford University Centre for Corporate Reputation, based at the Saïd Business School, was established in January 2008 under the Directorship of Rupert Younger.

www.sbs.oxford.edu/reputation

06 Business at Oxford CORPORATE REPUTATION Business as Usual issue 16: Winter 2009 07 usiness schools do a lot of but what we take from our videos is that “strategy work is not merely research on how different strategy work is not merely a matter of clever a matter of clever analysis, but a types of strategy impact analysis, but a skilful playing out of social skilful playing out of social roles, B on economic performance. roles, in which quite ordinary artefacts A group of us at Saïd Business School and and bodily movements can have surprising in which quite ordinary artefacts elsewhere are approaching the question impacts on the decisions that emerge. and bodily movements can have of performance from a different angle: how managers themselves perform strategy. Communicating with the audience surprising impacts on the decisions The idea is that strategy is a kind of work Our third project involves some of the most that emerge.” that people do. This strategy work has obvious forms of theatrical performance many of the characteristics of theatrical – strategy communication. Strategies need performance. People play roles and they to be communicated to both internal and have to be convincing. Performing strategy external audiences. Dr Basak Yakis-Douglas in this sense is not an easy thing to do. at the Oxford University’s Centre for Corporate Reputation is leading a project Taking on a new social identity with me on how large corporations We are pursuing three projects from this communicate their strategies to external perspective on performance. First, I am stakeholders, especially shareholders. working with Professor Saku Mantere at the Increasingly, the live performances of chief Hanken School of Economics in Helsinki executives in communicating strategy are on how managers become strategists. captured for the whole world in vodcasts Participation and credibility in strategic and podcasts. Vocal and bodily confidence conversations are not easily won. Business is now the medium through which these school education can help, but ultimately corporations’ strategies are conveyed. MBAs and similar qualifications only supply The same is true of internal communication the words on the scripts – important, but of strategy. Here Dr Charlotte Cloutier not enough on their own. Transforming of HEC Montreal and I are using video somebody from simple manager into cameras in a large UK corporation to record a strategic actor capable of contributing how strategy messages are represented to the overall strategy of an organisation by managers as they cascade down through involves more than the acquisition of the organisation and its international technical skills; becoming ‘a strategist’ divisions. Again, managers have to act in entails a change in social identity. front of large audiences, with presentations After following a group of more than demanding high improvisational skills 20 managers taking up senior roles in their in order to convey authenticity and organisations, we distinguish three tracks commitment. a manager needs to follow in becoming a If strategy is something that has to be strategist. There is the path of competence, performed, that of course has significant won typically through experience – both implications for business education. successes and adversity. Next there is the Strategy classes have always been strong path of confidence, a personal journey in on economic analysis. But the implication Show which the manager begins to believe both of our work is that strategy teachers need in their own capabilities as strategists and, to bring the social skills of performing at least as important, their responsibilities. strategy front stage too. Finally there is the path of credibility, acceptance by others of the manager’s business legitimacy as a player in the strategic Richard Whittington is Professor of Strategic Transforming someone conversation. The three paths of Management at Saïd Business School competence, confidence and credibility and Millman Fellow at New College, Oxford. from manager to effective are mutually reinforcing, but the last is Amongst his nine books are the prize-winning strategic actor involves often the hardest to achieve – and the What is Strategy – and Does it Matter? most fragile. and the biggest selling strategy textbook bringing social skills in Europe, Exploring Corporate Strategy. front stage, says Cultivating effective stage Richard Whittington. presence A second project is with Dr Curtis LeBaron at Brigham Young University, Utah. Here we are videoing senior managers as they literally perform their strategy work in their boardroom. We watch how they interact on the stage of strategy meetings, how they position their bodies to signal and collaborate, how they enrol apparently mundane props such as whiteboards, flipcharts and PowerPoints. Again, strategy is a social performance, with cues given and taken – often skilfully, but sometimes clumsily. We are at an early stage of the work,

08 Business at Oxford Teaching Strategy Teaching Strategy issue 16: Winter 2009 09 Business as Usual MBA Project

quick-change transformational nostrums at the inaugural Sir Douglas Hague Lecture of the 1980s, and today’s more diverse given at Oxford University’s Saïd Business and distributed models. School on 19 November. He suggested that the current economic In his speech to an audience of Oxford crisis is both a watershed and a great scientists, business academics, researchers opportunity. “It has led to a crisis in our and students, Lord Drayson talked about his understanding of leadership,” he said. experience of building technology companies “Public trust in leaders, especially business and stressed that now is the perfect time to leaders, is at its lowest level since data set up spin-outs and new businesses. on this has been collected. It tells you “Many of the world’s most successful something when one of society’s major businesses started in the teeth of a recession,” MINISTERS AND MARKETS DO MIX, value-creating roles has lost respect.” he said. “The global economy is coming SAYS LORD MANDELSON Professor Nohria said students and out of recession, and I know from personal In the practitioners alike are looking for a new experience that high-growth technology Ministers and markets do mix, was the orientation and new guidelines. One companies are often the first ones to feel message given by business secretary Lord response, he believes, might be a Hippocratic the upturn.” Mandelson to an invited audience at the oath for business. “In light of the diminished In response to a question from the floor, Saïd Business School on 16 October. public trust in business managers, is it time Lord Drayson also said that he believed there In a lecture on “the enterprise-led for management to spell out a common was a future for manufacturing in Britain. dragon’s recovery”, Mandelson outlined his view of understanding of their role in society and For years, he said, there had been a political the role government should play in fostering the conduct expected of them?” he asked. consensus that the British economy should enterprise in the UK. He summarised the He went on to say that the crisis provides focus on services, and in particular financial approach of Conservative leader David business schools with an opportunity to services, but in the wake of the recent Cameron as old-style “rolling back the state” deepen and broaden their understanding recession, the government had “woken up den and suggested that this was in fact “an of leadership. “Despite the fact that most to the fact that we’ve had decades of making abdication of responsibility”. business schools’ mission statements a mistake”. The kinds of manufacturing A TEAM OF FOUR OXFORD MBAS WORKED WITH BBC “Enterprise needs active government,” proclaim their commitment to developing businesses that the UK should foster, “DRAGON” JAMES CAAN OVER THE SUMMER TO HELP Mandelson said. The government’s role, he leaders who can contribute to the betterment he said, were those involving high level PREPARE HIS PRIVATE EQUITY FIRM, HAMILTON BRADSHAW, stressed, includes funding infrastructure, of organisations and society, research design or scientific skills. including research, science and skills. This, and teaching on leadership remains a TO SCALE UP. he said, is not government for its own sake fragmented and often marginal enterprise but as a means to an end. “The right kind in most schools,” he pointed out. New Diploma in Strategy and Innovation of government,” he said, “is part of the To this end, Professor Nohria and his solution, not the problem.” colleagues have assembled a database of In April 2010, the third in a series of The event was organised by the Oxford information from 1,000 business leaders. open-enrolment qualifications, the Oxford Centre for Entrepreneurship and Innovation “We have found there are many paths ames Caan, serial entrepreneur business processes and controls in line male tendencies with the need to listen Diploma in Strategy and Innovation, will run at the Saïd Business School. to success,” he said. Successful leaders and BBC “dragon”, typically with the momentum of its growth. and compromise. From working among for the first time.T he Diploma is designed are above all “contextually intelligent”, values his time at £15,000 “As the firm expands their investment Caan’s hand-picked private equity to enhance managers’ ability to take able to read and understand changing J per hour. So when four Oxford team, they need to formalise how they professionals, they learnt about the deal effective strategic decisions in today’s global circumstances and seize the opportunities. MBA students carried out their strategic conduct business,” said Faisal Butt, a cycle, as well as how to pitch and negotiate, business environment and to innovate for The event was attended by a mix of consulting project with Caan’s boutique Skoll Scholar and social entrepreneur from and the importance of getting buy-in before competitive advantage. MBA and doctoral students, executive private equity firm, Hamilton Bradshaw, Pakistan, who participated in the project. making changes. programme participants and McKinsey in London’s exclusive Mayfair district, “As they grow the number of clients they “Working with James Caan was really partners. It was followed by a dinner and they were pleasantly surprised to find deal with, they need to ensure they maintain like CEO mentorship,” enthused Terry a workshop the next morning exploring the they had daily access to the self-made the same levels of client contact and keep Beech. “The experience gave us tools we Oxford alumni Benazir Bhutto, Prime Minister of Pakistan (1988–1990 & 1993–1996) and Bill Clinton, issues raised in more depth. multi-millionaire. creating value.” can use to run companies and to prepare 42nd President of the United States 1993–2001. The brief for the Oxford team was to Faisal and his teammates Ville Lehtonen us for our future. Both parties have taken help Hamilton Bradshaw realise its goal from Finland, Terry Beech from Canada something out of the relationship – which The evolution of leadership of transforming itself from a family-based and Kent Killough from the US, started is as it should be.” investment firm to a market-leading private by conducting in-depth interviews with Caan was delighted with the team’s “We are in the process of constructing a equity house. Caan founded Hamilton everyone at Hamilton Bradshaw. Then, using contribution. “When a business is growing at new model of leadership, one that asserts Bradshaw in 2004 as a vehicle for his the information they had gathered, they the rate that Hamilton Bradshaw is, simple social as well as economic purposes,” investments, but the firm has grown rapidly created an investment operations manual but effective internal systems are essential said leadership guru Nitin Nohria, at a and now manages a portfolio of businesses focused on creating a consistent and in order to make that business scalable in the packed McKinsey-sponsored seminar held with a turnover of £400 million. Over the repeatable flow from sourcing the deal to future,” he commented. “The Oxford MBA at Saïd Business School on 25 June. coming year, it has ambitious plans to investment to exit. Other recommendations team came in at exactly the right stage of At the seminar Nohria, who is Richard double in size again. the team implemented concerned increasing our growth to be able to implement precisely P. Chapman Professor of Business Recognising that Hamilton Bradshaw transparency, clarifying roles within the those systems in a very effective manner. Administration at Harvard Business School, LORD DRAYSON SAYS NOW IS THE TIME needs a more robust structure to enable it organisation, creating an induction process Their attention to detail and commercial traced the evolution of leadership through TO INNOVATE to scale up, Caan invited the team of Oxford and improving document management. common sense were first class and they have from the makers and shakers of the early MBAs to carry out a two-month consultancy As learning experiences go, the project clearly benefitted our business by defining twentieth century, through the post World Now is the time to innovate, said Lord project with the company and to make was the “real deal”. From working together, and articulating the recipe for future success War II era of “predict and control”, to the Drayson, minister for science and innovation, recommendations for standardising its the team learned to balance their alpha within Hamilton Bradshaw.”

10 Business at Oxford BUSINESS AS USUAL MBA project issue 16: Winter 2009 11 Which companies are I have a very simple forecasting model combining local sensitivity with about protectionism; the key variable is Q&A global scale successfully? unemployment. There is a point past which, BY: ANTHEA MILNES Q if unemployment stays above that level for I think Procter and Gamble is a certain length of time, all bets are off in a very interesting balancing terms of policy measures that might be taken act. They’re trying to tap more – including protectionism. A scale economies than Unilever but without entirely ceding the high ground Do you have an ethical stance to Unilever in terms of local sensitivity. on globalisation? I would use them to demonstrate that there are different mixes of emphasis possible, Q even within the same industry. If we focus on the real This trade-off between local economy, as opposed to the responsiveness and global scale economies financial economy, what is probably the most widely established A will pull us out of this strategic dichotomy in international business. depression that we’re in, is more rather We’ve had it for more than 40 years now, than less integration. What would certainly and it’s a somewhat limiting way of thinking compound the agony would be moves about international strategy. towards protectionism. So I’m a believer Local responsiveness is the idea of in globalisation; I’m also a believer in adjusting to differences, while global scale protecting people, but the point is, you economies is the idea of aggregating by protect people and not jobs. overcoming differences. But differences PANKAJ GHEMAWAT aren’t just constraints to be adjusted to or Are business schools teaching PROFESSOR OF GLOBAL STRATEGY AT IESE overcome, they can sometimes be enormous strategy the right way? sources of value creation. Q ANTHEA MILNES DISCUSSES How has the recession Business schools talk a great DISTANCE AND DIFFERENCE WITH affected regionalisation deal about globalisation, PROFESSOR PANKAJ GHEMAWAT, and globalisation? but when you look at what Q A schools are doing, there’s AUTHOR OF “REDEFINING GLOBAL The crisis has really affected a very heavy emphasis on diversity – on STRATEGY”. the conversation in the attracting people from around the world, and sense that there are far fewer a very heavy emphasis on mobility – taking Why do you take issue with successful internationally, his response was completely integrated, we would have one A people who argue, as Friedman them to different locations, but without the thesis Thomas Friedman effectively, “If we can move from Arkansas to giant country, and presumably all our single did in “The World Is Flat”, that government any corresponding specificity on what the expresses in his book “The Alabama, how different can Argentina be?” market frameworks would continue to apply. is withering away. So, there’s less need content of actual courses should be. Q World is Flat”? And if you juxtapose that against Wal-Mart’s It’s precisely because we inhabit the messy to convince people that the world isn’t flat, I take issue with “The World profitability in 2004 in its foreign markets, middle ground between these two polar and there’s much more interest in trying is Flat” for two basic reasons: you see almost a perfect negative correlation extremes, that some thinking is required. to figure out what to do about differences. Pankaj Ghemawat gave a McKinsey seminar one is, it isn’t so; and second, between distance from Bentonville, where Companies have figured out that, at the Saïd Business School on 26 November A if it were, most of the problems Wal-Mart is based, and profitability. Can you explain your concept given the changing macroeconomic picture, 2009 on the subject of crossing borders that managers face in crossing borders Another example is Microsoft. On Bill of the four different types of emerging markets are going to account in a world where difference still matters. wouldn’t exist. So “the world is flat” can’t Gates’s first visit to China, he went to the distance that strategy-makers for an even greater share of global growth possibly be a helpful prescription for how Great Hall of the People and gave a lecture Q should consider? than they were projected to before the to do international strategy. arguing that it was wrong and irresponsible Borders clearly matter, but crisis. So, if you look at the foreign direct When you look at trade that could occur for governments to select standards, and not all borders matter as investment projections for this year, either within countries or across country that the market should decide. This didn’t much as each other. Hundreds for developing countries they are down, borders, and look at the cross-border go down well, and Gates later admitted it A of statistical studies have but not nearly as much as for developed component as a percentage of the total, took them ten years and cost them a couple been done identifying the impact of factors countries. So, proportionately markets you typically end up with figures in the of billion dollars in losses to figure out they like language, religion, or the legal system, like China and India look much more 10 to 20 per cent range, rather than the need to work differently with the Chinese on cross-border interactions. What interesting than they did a year or two ago. 90 to 100 per cent range you might expect government than with the US government. I’ve been trying to do, rather than come if borders didn’t matter at all. It sounds trite to say countries are up with a list of 30 variables, is to group Has there been a move towards different, but these notions of the flattening them into categories that are helpful to protectionism? What kinds of mistakes have of the world, the death of distance, the end my students. companies made by assuming of the nation state, and so on, are deeply So I talk about the CAGE framework for Q the world is flat? embedded in our psyches. thinking about distance – that is an acronym There’s a group called Q for “cultural distance”, “administrative Global Trade Alert based What’s interesting to me is What do you mean by (political) distance”, “geographic distance”, out of London that compiles the extent to which excessive semi-globalisation? and “economic distance”. All these factors A statistics on this. Their data belief in the flatness or have been shown to have significant negative show that we’ve seen some protectionism, A openness of the world economy Q impacts on overall cross-border activity. In but what I’m really worried about is can lead to problems, even in companies If the world were completely terms of applying these notions of distance that what we’ve seen is not nearly as bad that are very sophisticated along other composed of isolated to strategy, the first thing to do is to start with as things could get. The real economy, dimensions. countries, obviously you your industry and figure out which of these as opposed to the financial economy, Take Wal-Mart. A couple of years ago A wouldn’t need global generic categories matter the most. continues to look very problematic, when Lee Scott, the CEO, was asked what strategies, individual country strategies particularly in terms of the unemployment made him think Wal-Mart could be could work just fine; and if the world were statistics.

12 Business at Oxford Q&A Q&A issue 16: Winter 2009 13 he near collapse of financial central engines of human existence and yet Contemporary theorising about power in the range of contemporary examples of highly However, there is still a place for the firm’s markets and institutions over the empirical study of power relationships globalised world points to the significance visible corporations from Royal Bank of responsibilities in the strategic management the past eighteen months and among and within organisations is one of of interrelatedness and interdependence of Scotland to Nike who have received well of business and society relations. T the consequent world-wide the most neglected areas of management people across the globe, growing inequalities publicised challenges to their legitimacy. Many research studies focusing on recession has reinforced the view that inquiry. In common parlance, we think in a global space and the emergence of Although firms may admit to having responsibility issues have attempted to business and society relations are a strategic of firms having market power, financial supranational organisations of various types public relations and reputational strategies, answer the question, “Do firms do well by concern of firms. But to make progress power and even in some more limited and new forms of global risk associated do they also make strategic choices and doing good?” The results so far from this in understanding and managing these spheres, socio-political power. Some large with warfare, crime and terrorism. Current changes in the wider and deeper domain of work are very inconsistent. This is partly relations, we first need to reframe them. corporations have equivalent or even greater strategic management theory is poorly legitimation? Many may not admit it, feeling because of definitional and methodological We need to move out from the fraught economic assets than some nation states. equipped to sense and analyse such that their mere presence, market power, and weaknesses but also because such studies concept of “corporate social responsibility” For example, when BP acquired Amoco developments with or without the explicit legal protection, guarantees legitimacy. But have often focused on exceptional firms and away from the ‘r’ word – “responsibility” in 2000, they moved from fifth to being use of power as a mobilising intellectual we do not know. The detailed comparative in exceptional industries. Given that the – to consider some other key words, themes the second largest oil and gas company, concept. analysis of the legitimation strategies of strategic management of firms is now played and questions which will open up the and their move also precipitated similar globalising firms awaits the analysis of the out on an international stage we need to limited domain of CSR and provide a better acquisition behaviour by their competitors. 2. The legitimacy of the modern field of strategic management. carry out “mapping studies” to examine analytical platform for understanding how When the CEO of BP goes to China he is corporation “responsible” behaviour in large sample businesses impact on society and vice versa. likely to meet very senior political figures Legitimacy is the second core social science 3. The responsibility of the modern studies in widely different firms in different In navigating the landscape of business up to and including the President of concept which may be profitably brought corporation sectors and economies. and society we can advance the field by China. When BP enters Angola, which is into the analysis of business and society Language can be an analytical prison and focusing on five key fields of inquiry: a notoriously weak performing country, it relationships. It is rare to find studies of a liberating force. The thesis of this article 4. The governance of the modern may be obliged to take on some of the social the legitimisation and de-legitimisation is that by complementing responsibility corporation 1. The power of the modern responsibilities of the state. In all these processes of corporations in the literatures with power, legitimacy, governance and Issues to do with the purpose, values, corporation ways, BP may have the potential to exercise on CSR and business and society regulation, we will open up new lines of control and strategic leadership of firms are Acquiring and using power is one of the power even if it chooses not to do so. relationships. This is surprising given the inquiry in the field of business and society. also intimately connectable to the wider

Moving on from

We should move away from a focus on The word corporate social responsibility and examine the relationship between business and society more broadly, contends Andrew ‘R’ Pettigrew. 14 Business at Oxford BUSINESS AND SOCIETY BUSINESS AND SOCIETY issue 16: Winter 2009 15 concern with business and society relations. Regulation is normally seen as a legislative So far I have portrayed our more inclusive As such firm governance matters are a concern of the state. This responsibility agenda of business and society around the legitimate part of the strategic management can be approached proactively by apparently separable elements of power, Working knowledge of business and society relations. governments wishing to shape corporate legitimacy, responsibility, governance and We know that strategic choices about the behaviour on matters of governance, regulation. The reality of life, however, is purpose and values of the firm can be fateful business practices and environmental care, that these five elements are not played out Fund Centre at HEC to further his study for a firm’s business success and societal but often states are reactive in regulatory in isolation. Excesses of corporate power may of “Asset Fire Sales and Purchases, and legitimacy. There is ample evidence to show matters responding only after manifest impair hard won legitimacy and reputation the International Transmission of Funding that shareholder value maximisation as corporate excesses. and attract the de-legitimisation strategies Shocks”. The grant is worth 10,000 Euros. a corporate value had a profound impact Firms throughout the world employ of indignant stakeholders. Fuelled by an He and co-authors, Chris Lundblad on business cultures in North America and political lobbyists and internal regulatory informed and sceptical media, citizenry may and Pab Jotikasthira, both from University parts of Europe in the 1990s. This value specialists to limit, thwart and shape incite passive politicians to legislate and of North Carolina at Chapel Hill, will choice was buttressed in turn by executive the legislative actions of states. They also regulate firms who claimed their own ethical investigate how financial shocks are compensation and share option packages employ executive and staff officers to standards were sufficient curbs on their transmitted from developed to emerging which distorted firm performance directly engage with regulators once they otherwise benign behaviour. Firms may use stock markets, with special attention paid requirements and directly or indirectly led are empowered by legislation. But the whole impression management to contain attempts to the role of mutual funds and hedge to some of the corporate excesses now all domain of business, political and legal to regulate and these actions suggest E-BUSINESS funds in such transmission. too visible in parts of North American and action by corporations is a crucial area of that the politics of strategic management Earlier in 2009, Tarun won the following European business life. strategic management that warrants greater represent a core area of academic concern Jonathan Reynolds, Lecturer in Retail prizes: the Viz Risk Management Prize for Beyond concern with the purpose understanding. and executive action in business and society Marketing at the Saïd Business School, his paper ‘Limits to Arbitrage and Hedging: and values of corporations, an interest in Under what circumstances and in what relations. has published a new textbook entitled Evidence from Commodity Markets’; and the governance also takes us to the board as dimensions of business society relations If this entirely new domain of scholarly “E-Business: A Management Perspective” prize for the “Best External Speaker” at the an instrument of both control and strategic do states act proactively and reactively? inquiry in strategy appears, it will (ISBN: 978-0-19-921648-2, OUP, State Street Bank European Quantitative leadership. Here there is a long-standing What role do other stakeholders such as complement the existing concerns with the December 2009). Forum. fascination with the agency problems of advocacy movements play in such processes competitive advantage and resource-based Reynolds draws together different boards most often wrapped up in choices and what are some of the conditions which theories of the firm. conceptual models, empirical research and about the structure and composition of are receptive to advocacy strategies? Competitive IPOs case studies to examine the contribution those boards. This established agenda How are these power mobilisation strategies e-business technologies make to the now needs complementing with a wider played out in different nation states and Andrew Pettigrew is Professor of Strategy Following the disclosure of spectacular effectiveness and efficiency of firms, as well discussion about the purpose, conduct regions? And what are the performance and Organisation at Oxford University’s abuses by investment banks in IPOs during as third and public sector organisations. and effectiveness of boards. and reputational consequences for firms Saïd Business School and Senior Golding the dot-com boom, US and UK regulators Using brands students can relate to such of different regulatory regimes in different Fellow at Brasenose College. A longer proposed changes to IPO practice which as Craigslist, Twitter, Skype, Second Life 5. The regulation of the modern domains of business and society matters? version of this article can be found in largely came to nothing. However, Tim and Pirate Bay as well as less conventional corporation These are fundamental questions of Mainstreaming Corporate Responsibility, Jenkinson and Howard Jones, have published examples such as Kiva, Ocado, Phorm, The fifth and final domain concept to frame academic and executive concern which (Eds) N. Craig Smith and Gilbert Lenssen, a paper exploring alternative ways in which Tejari and Alibaba, he demonstrates how the conceptual and executive space referred should be at the heart of the strategic John Wiley, 2009. A.M. Pettigrew, Corporate companies can guard against banking e-business is moving into mainstream to as business and society gives attention management of business in contemporary Responsibility in Strategy, Chapter 3, chicanery when they go public in an IPO. operations in today’s marketplace. GEOENGINEERING to the regulation of the modern corporation. society. pages 12–20. The paper, called “Competitive IPOs” “It is hard for many of us to think of our documents the market-led response to these individual lives, our communities, or indeed Professor Steve Rayner, director of the Institute abuses, which regulation did not address. a world without e-business technologies,” for Science, Innovation and Society at the The authors examine the pioneering IPO Reynolds says. “These technologies range Saïd Business School, took part in a panel by the French company Pages Jaunes in from hardware to software, from web debate on the science, technology and 2004. In this €1.4 billion flotation by Pages browsers to email and social networks, governance of geoengineering on 19 January Jaunes’ parent company France Télécom, from mobile web to location-based services at the Royal Society. the various roles typically taken by a single and from e-procurement hubs to enterprise The technology is seen as one of the bank were assigned to separate firms. resource planning systems.” possible routes to counter climate change Moreover, the banks were appointed at the The text is supported by over 65 case with proposals ranging from placing giant end of the IPO process, rather than months studies and vignettes, over 150 review mirrors in space to reflect sunlight to or years in advance, and an independent and discussion questions, and 60 activities fertilising the oceans with nutrients in order advisor handled much of the preparation designed to allow the reader to explore their to produce more phytoplankton to soak up up to that point. own understanding of the issues. atmospheric carbon dioxide. The paper, published in the journal The event introduced the science, European Financial Management, technology and governance of geoengineering, demonstrates that these changes had two discussed the possible benefits, drawbacks effects: to make the banks work harder and and uncertainties of the various options to improve the issuer’s bargaining position that have been proposed and provided an at key decision-points, such as the fixing opportunity to discuss the prospects and of the price and the allotment of shares to problems that may arise with further research investors. These changes have been adopted into this area. in a number of European IPOs since.

Researching financial shocks

Tarun Ramadorai, Reader in Finance at Oxford University’s Saïd Business School, has received a grant from the BNP Paribas Hedge

16 Business at Oxford BUSINESS AND SOCIETY Working knowledge issue 16: Winter 2009 17 “We talked for days about the Hot question impact our experience at Said Business School and Oxford set up businesses on the basis of identifying had on us; how it had affected new market opportunities for products and services that existing market players our philanthropic and social fail to provide. “Breaking the rules” is the entrepreneurial views.” ? underpinning of innovation and the potential road to riches. The key drivers of the internet Are there rules to riches? revolution destroyed the old rules (strategies) in industries as far apart as retail, travel and entertainment. The traditional providers did not embrace the new technologies but kept to the old strategies of their business models.

James Caan CEO of Hamilton Bradshaw and star of Dragons’ Den

hile there are no fixed rules to riches, a successful Gerry Johnson entrepreneur must constantly Emeritus Professor of w be able to identify business Strategic Management opportunities in the environment in University of Lancaster which he operates. He must then be Management School, Partner Two Oxford alumni formed able to rapidly organise and deploy his in Strategy Explorers a business partnership team and resources to capitalise on among the sand dunes of those opportunities. Strategy is the art of an successful business the Gobi Desert. recognising opportunities in the market, management be taught? positioning one’s firm to those opportunities, I think I would answer this mongolianBy: Anthea Milnes and swiftly deploying the right resources C in three parts. Certainly to harness the profit-making opportunities. business management can be taught; meeting In small and medium-sized enterprises or at least the techniques and some of the much of this is left to the raw instinct of concepts associated with it. I also think that of the same friends and were both good go to their accountant or lawyer for advice STS – which stands for “Success to the entrepreneur, but capturing that raw successful business management of those friends with Chris McKenna. Small world.” on how to sell their business. Typically, Significance” – is also distinctive is in its instinct and fine tuning it for the longer techniques can be taught. I think the “We talked for days about the impact a basic prospectus is created and distributed readiness to support clients in their goal term is a critical first step in formulating underlying question is whether successful our experience at Saïd Business School and to a handful of largely unqualified to do create what the partners call personal the high-growth company’s strategy. business management that makes a Oxford had on us; how it had affected our prospective financial investors – which “significance”. “For many, it’s not just about difference can be taught. That I am less sure philanthropic and social entrepreneurial virtually assures the failure to sell or, at maximising the selling price, it’s about doing about. I suspect that is as much to do with views. That discussion evolved to how we best, fails to achieve the true selling price something significant for their family, for how the particular skills and personalities of could support the School, its students and the of the company.” a cause, or to make the world a better place individuals match with particular contexts greater philanthropic causes for the better.” The STS approach differs dramatically. – so we provide a free service to assist them and circumstances. I guess I am saying Five weeks later Mark (EMBA 1), along with The partners invest hundreds of man-hours in establishing foundations, family trusts, we can prepare managers through teaching hina’s Gobi Desert is one of the Rob Follows (MSc in Management Research) researching and developing an international charities and more,” says Follows. and management development; but that world’s most barren and remote and Saliya Jay (DPhil), established STS database of, on average, 250–300 global Presently, STS has 63 active deals, is not the same. landscapes. Few outsiders have Capital Partners (UK) – the sixteenth STS strategic investors – organisations that are ranging from distressed real estate assets C ever traversed it. So it seems office worldwide. likely to realise synergies between the to private banks, mines to hotels, and an unlikely location for two Oxford alumni to STS Capital Partners is an international client’s company and their own. They then e-commerce sites to windmill farms. The meet, let alone form a business partnership. boutique investment banking firm founded invest similar amounts of time in creating a majority of the firm’s deals originate through But this is exactly what happened to Mark by Rob Follows in 2003. The firm specialises prospectus that portrays the client’s company referrals for which STS pays fees. “If someone Richard Scase Carmichael and Rob Follows. in mergers, acquisitions and corporate in the best light. They personally engage with refers a deal to us that we secure and Professor of sociology AND The two men were participating in a finance for small and mid-market companies each prospective investor and invite qualified successfully conclude the sale of, the referral ORGANISATIONAL BEHAVIOUR, University 250-kilometre, six-day endurance event worldwide. With 22 partners and more than parties to bid in a “soft” auction designed to fee is often pretty substantial” says Saliya. of Kent, author of Global Remix organised by Racing the Planet. “We were 320 associates worldwide, it focuses on realise maximum value for the owner and to “Many use their referral fee as a donation to and Living in the Corporate Zoo at a checkpoint, surrounded by hundreds transactions ranging from US$50 million identify the most appropriate buyer. their favourite charity, so from our perspective, of miles of sand, refilling our water bottles to US$1 billion. “In this way, owners who wish to sell, it’s a win-win for everybody” he says. suppose an off-the-cuff answer when we met,” Mark recalls. “Within five “It’s strategic M&A meets philanthropy,” retain greater control over the sale of their would be “no”. Breaking the minutes, we realised that we had both Rob explains. “For example, private business, even when they are in distress” rules is what entrepreneurship studied at Saïd Business School, had several business owners seeking an exit generally says Saliya. I is all about. Schumpeter argued the case for “creative destruction,” which is what entrepreneurs do when they

18 Business at Oxford Alumni hot question issue 16: Winter 2009 19 ith all the tough talk you hear has tracked the close parallels between military philosophy and business by applying Building a deeper level of intelligence at a particular level, and who should be Sun Tzu’s work and apply it directly to their from some executives – about management and military. the strategies of Sun Tzu’s The Art of War about the opposition’s capabilities, about doing what,” General Ritchie explains. organisations,” says McNeilly. “I don’t think destroying the competition, “There are a lot of similarities that people written 2,500 years ago. The origins of the their products, financial capabilities, “In organisations outside the military, it is that works very well. It requires a lot more w conquering markets, rallying see between business and warfare. Both are book are uncertain, although some attribute understanding how they think and how they easy for a board, for example, to become too thought, a lot more strategic creativity, about the troops – you could be forgiven for highly competitive situations, with specific it to Sun Wu, a military general alive in China have behaved in the past, can be invaluable. involved in the details rather than focusing how you are going to accomplish your goals.” thinking that war and business were almost goals and objectives to be achieved, they around 500 BC. Gordon Gekko, that paragon McNeilly cites Sun Tzu on the subject. on strategy. Also, the imperative of turning a There are some strategic tools and identical activities. are contests of strategy and logistics as well of corporate capitalism, was a fan. “I don’t “It is said that if you know your enemies and profit from day to day makes it quite difficult techniques that business could definitely But then business and warfare have as individual wills and egos, they require throw darts at a board. I bet on sure things,” know yourself, you will not be imperilled in to sit back and look at where the organisation profit from adopting, though. War games, the always been closely linked. Indeed, in the leadership to motivate followers, people play he says in the movie Wall Street.“Read a hundred battles. If you do not know your might be going.” hypothetical simulation of various scenarios, past some companies have taken the war an important part so morale is involved as well, Sun Tzu, The Art of War. Every battle is won enemies but do know yourself, you will win The ability to be flexible and cope with were invented by von Moltke the Elder and metaphor a little too literally. The Hanseatic and they are increasingly global in scope.” before it is ever fought.” one and lose one; if you do not know your unpredictability is another lesson business can be adapted for corporate use. “It is League, a fifteenth-century alliance of Military leaders of the past also Sun Tzu’s popularity among corporate enemies nor yourself, you will be imperilled can take from the military. Helmuth von something that businesses can do, and cities in northern Germany, was originally appreciated the connection. Carl von strategists is not without reason, says in every single battle.” Moltke the Elder, Prussian army chief of has lot of advantages in that it is a risk set up as a trading organisation but ended Clausewitz fought for the Prussian army at McNeilly. “One thing that Sun Tzu talks Of course this is just a hint of what staff in the mid to late 1800s, famously free process, an intellectual exercise which up engaging in naval wars with various the Battle of Waterloo, and became director about, for example, is the need for a direct a military approach to strategy has to offer said that “no plan of operations extends with gets you ahead of the competitors, and nations. Equally, the East India Company, of the Prussian war college in 1818. He is and indirect approach. Executives often take business. Major General Andrew Ritchie any certainty beyond the first contact with encourages experiential learning which is formed to take advantage of British trading perhaps best known for his book On War, on their competitors head-on, in price wars, CBE, former commandant of the Royal the main hostile force”. At Sandhurst, says much more powerful than just reading about concessions in India, combined both published posthumously, in which he wrote: for example. But, as Sun Tzu points out, Military Academy Sandhurst and currently General Ritchie, future military leaders are things,” says McNeilly. commerce and conflict as it traded with “Rather than comparing it [war] to art it is often the indirect approach that is more director of Goodenough College, the taught, almost from the beginning, that In the meantime, you could always settle and conquered large parts of India in the we could more accurately compare it to successful. If you attack a city with a direct postgraduate residential centre in London, life is chaotic and that those that make for some more strategic insights courtesy eighteenth century. commerce, which is also a conflict of approach you can lose a lot of men in the suggests a military approach may also be the least mistakes are likely to prevail. The of Sun Tzu: “Deploy forces to defend the Over the years, management academics, interests and activities; and it is still closer process. If you take a competitor head on, helpful in the hierarchical demarcation of unpredictable nature of battle is reflected strategic points; exercise vigilance in consultants, and executives, have drawn on to politics, which in turn may be considered like Kmart did with Wal-Mart back in the strategic planning activity, across strategy, in their training. preparation, do not be indolent. Deeply the writings of military strategists to inform as a kind of commerce on a larger scale.” 1990s, trying to undercut on prices, it can operations and tactics. For all its wisdom, though, military investigate the true situation, secretly corporate strategy. Mark McNeilly, author Perhaps the most popular military also prove costly.” “The military has sought a structure and strategy is no panacea for corporate strategic await their laxity. Wait until they leave their of Sun Tzu and the Art of Business and strategist among the business fraternity is Sun Tzu also highlights the need for common language through its doctrine that planners. Nor should it be applied in strongholds, then seize what they love.” George Washington and the Art of Business, Sun Tzu. Modern executives like to mix their gathering intelligence about the “enemy.” helps people know when they are operating cookie cutter fashion. “People try to take Ruthless stuff.

Steve Coomber FINDS OUT FROM MAJOR GENERAL ANDREW RITCHIE, FORMER CorporatE combat COMMANDANT OF SANDHURST, AND MARK MCNEILLY, AUTHOR OF SUN TZU AND THE ART OF BUSINESS, WHAT MILITARY STRATEGY HAS TO OFFER THE WORLD OF COMMERCE.

20 Business at Oxford Military strategy Military strategy issue 16: Winter 2009 21 Not bad for a self-funded venture. Mixt Greens The long-term goal is to have hundreds Alumni is the collaborative effort of David Silverglide, of restaurants across the United States his wife Leslie Swallow (who did an MSc in and make the brand as well known as BY: SARAH BARRELL Biodiversity, Conservation and Management at US franchises like Chipotle (quick service, Oxford) and her brother, Andrew, a fine dining gourmet Mexican). “One of the things that ixt Greens is a multi-unit, chef with more than 13 years’ experience. the acquirer was most attracted to was how quick service eco-gourmet® All three share a passion for food and easily this format can be scaled up without restaurant concept that environmental sustainability and saw a losing its core value,” says David. “My wife is M operates out of San Francisco, gap in the market for a high quality, quick Sustainability Officer, so she will make sure California. David Silverglide co-founded the service restaurant serving environmentally we stay true to our environmentally friendly operation after graduating from his MBA responsible food. The food is organic, mission and we hope to lead by example. in 2004 and opened the first restaurant sustainable, seasonal and sourced from local Mixt Greens shows people that you can be in April 2006. Two more followed in farms and it is served in containers made truly green, not just talk about it, and it still rapid succession and the company was from one hundred per cent compostable works for the bottom line.” David will serve named “the Greenest Restaurant in the corn. The buildings the company occupies as Senior Vice President of Development and San Francisco Bay Area” by a regional are built with renewable, recycled, and Marketing on the board of the new company. environmental non-profit that certifies environmentally friendly materials and kept David credits his MBA with helping him eco-friendly restaurants. Jump forward three clean with non-toxic biodegradable products. found Mixt Greens and take it to the next years and Mixt Greens has gone on to collect Inventages Whealth Management has level. “The courses in valuation and finance a number of accolades and has proved so acquired Mixt Greens and will put it into gave me the background to navigate the successful that the investment vehicle of a holding company with another restaurant acquisition,” he says. “It allowed me to do a large multinational corporation recently group that will be converted into Mixt Greens the calculations myself and since day one, acquired the franchise with a view to rolling outlets, enabling the brand to expand into with the running of the business there have it out across the USA. Washington DC, Seattle and Los Angeles. been aspects of the MBA course that I use “This has allowed us to grow our brand all the time. To reduce costs we needed nationwide, almost overnight,” says David. statistical predictions and models to work “The deal came out of the blue but I think it out what we produced daily, plus HR and has a lot to do with the way we’d positioned marketing skills. The MBA equipped me ourselves. We were the market leader in this with essential tools that I use every day.” area: we were doing one thing very well that no one else was doing.”

MBA alumnus David Silverglide is the BUSINESS brain behind the newest and greenest of America’s quick Green service concepts. cuisine

22 Business at Oxford Advert alumni issue 16: Winter 2009 23 “I was honoured to be a member of 10,000 Women, through which I learned many new ideas and advanced insights from courses and instructors, and rekindled my dream.” 10,000 The first hundred Chinese women women entrepreneurs graduate from the Oxford-Zhejiang 10,000 Women Entrepreneurship Certificate Program.

he first 100 women in the “and they had learned hugely from each A key feature of the programme was Profiles Oxford-Zhejiang 10,000 other as well.” one-on-one support from mentors, including Women Entrepreneurship The programme was highly selective, Goldman Sachs employees and Oxford and Lijun (Cecilia) Jiang, mentor I am very glad to be one of the mentors customer base with good growth potential. T Certificate Program graduated with the first 100 participants chosen from Zhejiang alumni, with whom the participants on the Oxford-Zhejiang 10,000 Women I reported to our head office about on 25 October 2009 at a ceremony in more than 1,000 applicants. Aged between will remain in touch beyond graduation. “I was part of the Oxford Entrepreneurship Certificate Program. my plan to assist the 10,000 Women Hangzhou, China. The programme is part 20 and 45, the women completed the Around fifteen Oxford University alumni MBA class of 2005–06 My role as a mentor included giving a Entrepreneurship Certificate Program of the Goldman Sachs 10,000 Women programme while continuing to run their own volunteered to mentor the Scholars. and have worked in presentation to the class about my own and was delighted that they agreed both initiative and has been developed jointly businesses or starting new ventures. They They advised on their business plans, commercial banking in experience of the core elements that to sponsor the business competition prizes by the Saïd Business School at Oxford were involved in a broad range of industries helped develop their entrepreneurial skills China for more than 20 women entrepreneurs need during their and the graduation ceremony as well as University and the Global Entrepreneurship and sectors from retail and leisure to and leadership skills, and provided an years. My present role is Vice President of career development. to offer further financial training to the Research Centre at Zhejiang University. technology and agriculture, healthcare and international prospective. Ping An Bank, Hangzhou Branch, in charge My mentee Qu Xiaoping was a yoga women entrepreneurs after graduation to Helen Alexander, President of the education. Some of their organisations had The Goldman Sachs 10,000 Women of Small and Medium Enterprises business teacher in Zhoushan and was thinking of help them know how best to approach a CBI and Chair of the Saïd Business been in operation for as long as four years initiative is a five-year campaign to foster in Zhejiang Province. Ping An Bank opening a yoga House for middle and high bank for credit and to raise further funding School’s Advisory Forum attended the while others were still at the planning stage. greater shared economic growth by providing belongs to the Ping An Insurance Group level customers. I gave her my suggestions in the capital market. ceremony on behalf of the School, sharing Zhejiang and Oxford professors worked 10,000 under-served women around the and is the first integrated financial services for developing such a business in her city, We are continuing to work with the a platform with Deshui Jin, the Vice Governor closely together to develop and deliver a world with a business and management conglomerate in China, listed in both Hong what she needed to do in terms of market programme and will arrange ongoing activities of Zhejiang Province. After speaking to five-module programme designed to build education. The initiative is coordinated in Kong and Shanghai. research, how to differentiate her new including seminars on financial services and some of the women individually, she said up crucial business and entrepreneurship local markets by a network of more than As I am very familiar with the products business from her competitors, and how an investors’ meeting party. We also started there was “no question” that the programme skills and competencies. The modules were 70 academic and NGO partners. It is funded and services that Chinese banks provide to to take care of management, financing and some credit investigation work on the top had made a huge difference to them. supported by case studies, science park by Goldman Sachs and The Goldman Sachs their customers, and with new enterprises’ daily operations. I also helped review her 20 existing business plans and will work with “They were very clear what they wanted site visits, and a programme of lectures by Foundation. demands for their business development, business plan. our sister companies and other partners to to do and how to go about it,” she said, financiers, lawyers and entrepreneurs. I thought my experience would be valuable As a new bank in Hangzhou, at Ping An provide more consulting and fund raising to potential entrepreneurs. Bank we are eager to raise our own SME services to the women entrepreneurs.”

24 Business at Oxford Entrepreneurship Entrepreneurship issue 16: Winter 2009 25 Xianglian Jiang, entrepreneur Hongfang Xia, entrepreneur HONGMEI ZHANG, ENTREPRENEUR Not to be missed Xianglian Jiang was born Hongfang Xia was born Hongmei Zhang grew up in 1976 in Wenzhou in a remote village in from Anji, Huzhou, in Zhejiang, a small town Zhejiang Province. Her southeastern China, which 11 MARCH ’10 25 MARCH ’10 11–13 MAY ’10 near the sea. In 2007, parents were farmers, is famous for producing she joined the Ruian City and she had three white tea. EVENT: Oxford – McKinsey EVENT: OXFORD INDIA EVENT: CLARENDON LECTURES Rural Village Agriculture Association, and brothers and sisters. During summer In 2006 she leased around 450 acres International Seminar BUSINESS FORUM IN MANAGEMENT STUDIES was subsequently elected vice president. vacations, while her better off friends among the hills of Changxing, her home Series The Association comprises 60 women played, she spent her time helping on the town, and established the Heping Shixi tea LOCATION: TAJ MAHAL PALACE LOCATION: SAID BUSINESS SCHOOL working in rural agriculture, many of whom farm and selling water melons and green plantation, growing traditional white tea. LOCATION: SAID Business School, HOTEL, DELHI TIME: T.B.C. have little education and low earnings. soy beans. After leaving school, her jobs White tea is a core industry in the Rhodes Trust Lecture Theatre TIME: 9:00 Speaker: Professor Kathleen Xianglian attended the Oxford-Zhejiang included cutting hair, waiting on tables area and there are thousands of farmers Time: 17:30–19:00 Theme: Education for the M. Eisenhardt 10,000 Women Entrepreneurship and selling bus tickets, until eventually who work their own small plantation. Speaker: Professor Rakesh 21st century Theme: Innovation and the Certificate Program in order to be better able she saved enough to train as a kindergarten Hongmei, however, has more ambition Khurana entrepreneurial firm The Oxford India Business Forum provides to support the members of the association teacher. for her business than most. She plans to Theme: The Failure of Business a platform for global business leaders, Professor Kathleen M. Eisenhardt, Professor to grow their agricultural ventures. When the kindergarten she worked for combine growing tea with setting up a Education in the 20th Century: academics, policy makers and sector of Strategy and Organization at Stanford “I think I absorbed more within this went bankrupt, leaving the children with tea-house chain in order to promote tea Implications for Leadership, specialists to debate some of the most University and the Research Director of the short period of three months than in my 30 nowhere to go, Hongfang set up her own culture in China. Business and the 21st Century pertinent issues affecting business, economic Stanford Technology Ventures Program will years experience,” she says. “Some people pre-school. She found a location, bought “My farm has already taken shape,” The speaker, distinguished Sociologist, and social growth in this part of the world. give the Clarendon Lectures in Management said it is more difficult to be a successful teaching and kitchen equipment, and she says, “but now I am ready to take Rakesh Khurana, is Marvin Bower Professor At this year’s event, leaders will debate Studies at the Saïd Business School on woman because women need to devote their hired teachers in ten days. Although over a large scale, cultural-type tea-house of Leadership Development at Harvard education for the twenty-first century. 11, 12 and 13 May 2010 on the subject of abilities for both the business and their her first venture was not successful, she in Huzhou. Through this platform I can Business School. He has made his name Proposed speakers (to be confirmed) include: “Innovation and the Entrepreneurial Firm”. families. After studying, I don’t think gender persisted with her dream to own her own promote our long history of tea culture, and from two outstanding books: ‘Searching Dr Manmohan Singh, Prime Minister of Professor Eisenhardt is well known for her is so important. First of all, you must have kindergarten and now has six purpose-built stimulate more and more local tea growers for a Corporate Savior: The Irrational India; Rahul Gandhi, General Secretary of work on strategy, strategic decision making, an honest heart, be sincere, industrious, classrooms with more than 160 students, to take the road to be rich.” Quest for Charismatic CEO’s (2002) the Indian National Congress; Dr Suranjan and innovation in rapidly changing and happy, ambitious to seize your chance, some of whom attend for free because and ‘From Higher Aims to Hired Hands: Das, Vice Chancellor of the University highly competitive markets. She is the take responsibility and do your duty.” their families are poor. “Though it’s hard The Social Transformation of American of Calcutta; and Andrew Hamilton, Vice co-author of the book Competing on the to earn lots of money from the business, Business Schools (2007). His latest Chancellor of the University of Oxford. Edge: Strategy as Structured Chaos. I feel happy to contribute my efforts and “I think I absorbed book ‘The Handbook of Leadership and For further information, please email For further information, please email dream to children’s smiling,” she says. Theory Practice’, will shortly be published [email protected] [email protected] more within this “I was honoured to be a member of by Harvard Business School Press. short period 10,000 Women, through which I learned For further information, please email many new ideas and advanced insights of three months [email protected] from courses and instructors, and rekindled 14–16 APRIL ’10 03–05 JUNE ’10 than in my 30 years my dream. It’s the closest point to victory experience.” when it’s the most difficult.I will go on.” EVENT: SKOLL WORLD FORUM EVENT: CLARENDON LECTURES 12 MARCH ’10 FOR SOCIAL ENTREPRENEURSHIP IN FINANCE

EVENT: ANNUAL LUBBOCK LOCATION: SAID BUSINESS SCHOOL LOCATION: SAID BUSINESS SCHOOL, LECTURE IN MANAGEMENT Theme: Catalysing Collaboration LECTURE THEATRE 5 for Large-Scale Change Time: 17:30 EACH DAY LOCATION: SAID BUSINESS SCHOOL Speaker: Professor marco pagano Social entrepreneurs with innovative Time: 17:00 Theme: Labour and finance solutions to critical issues – climate change, Speaker: HECTOR SANTS, CEO, water scarcity, poverty, education and public Marco Pagano, Professor of Economics FINANCIAL SERVICES AUTHORITY “The students in this health – cannot achieve impact at scale at the University of Naples Federico II, Theme: Regulation after the crisis program are nothing without forging cross-sector partnerships will give the Clarendon Lectures in Finance short of remarkable, Hector Sants is the Chief Executive and alliances. 2010 on 03, 04 and 05 June on the subject and the partnership with Officer of the Financial Services Authority. This year’s Forum will engage the of “Labour and Finance”. Professor Pagano both Oxford and Zhejiang Prior to his appointment as CEO in July world’s most influential social entrepreneurs, is a consultant to the Italian Treasury has created a practical, 2007, he was a Managing Director of social investors and thought leaders on the reform of security markets, and a the FSA responsible for Wholesale and from all sectors in critical discussions, member of the Treasury’s commission for world class offering,” Institutional Markets. In this role he had debates and work-sessions designed to privatisations. Most of his work is in the said Dina Habib Powell, responsibility for all regulated markets, create partnerships, networks, knowledge area of financial economics, especially managing director and the related infrastructure such as clearing and collaborative pathways between in the field of stock market microstructure. Global Head of Corporate and settlement, the operation of the the social, policy, academic and private The Lectures are organised by Oxford Engagement. “We look UK Listing rules, the regulation of firms sectors. For more information go to University Press and Saïd Business School. or groups which conduct primarily www.skollworldforum.com For further information, please email forward to following the wholesale or institutional market business [email protected] progress of graduates and the associated policy framework. as they grow their For further information, please email businesses and create [email protected] jobs in their community.” Left to right: Professor Zhongming Wang, Director, Global Entrepreneurship Research Centre, Zhejiang University; Deshui Jin, Vice Governor, Zhejiang Province; Helen Alexander, president of the CBI; Elizabeth Paris, Programme Director for the University of Oxford, Oxford-Zhejiang 10,000 Women Entrepreneurship Certificate Program.

26 Business at Oxford Entrepreneurship diary issue 16: Winter 2009 27 by the rampant expectations of society in an information world that tells citizens that there is a choice of better service elsewhere. Here lies the kernel of the next wave of change – citizens and societies are starting to take the initiatives themselves to reinvent public services by connecting it with their own lives. Change is co-created at the front line between citizen and state. In the UK healthy living centres, local eco-towns and social enterprises are examples. We are moving to a “we can” public compact. Such community-owned approaches can also create real opportunities for better ‘joined up’ service at lower cost – witness the government’s recent Total Place ideas and indeed some ‘progressive’ local authorities (of varying colours) stripping down services to lean ‘only as needed’ work. Both government and opposition parties are grasping at this as part of the solution to both Governments need to take a different approach to citizen demand as well as severe funding issues hitting the public purse. Recent creating better public services, says Keith Ruddle. Labour public service reform agendas get close to this – including the latest ‘Smarter Government’ plan issued in December 2009, espousing again the role of citizen and front line, changing the role of the centre to be more enabling, and streamlining Together central government. Will it work this time? If progress isn’t made then “slash and burn” budget cuts and disillusionment with government could see central civil services reduced by 2020 to the role of regulators and funders, and a market free-for-all delivering patchy services We can all round. A more optimistic scenario could t Oxford many international curious professional art of running large and management” route – devolving the Start for under 5s, tax credits, and even the be a reinvented central government that has politicians and public global bureaucracies (yes, the empire) with machines of state into accountable, much maligned Welfare to Work programmes embraced new leadership capabilities of managers pass through on discipline and a mind for order and status performance-managed units. Private and in 1999. enabling a more complex world of public A our Executive Education quo. For the humble citizen the mindset third sector involvement has tortuously In 2004 I contributed two chapters services that changes from the bottom up. programmes – sharing their wisdom but was “I belong” to the state. Post World War II continued through outsourcing, financial to Liam Byrne and Phil Collin’s audit of Places such as Sweden, New Zealand, seeking “magic management bullets”. saw a significant shift.T he citizen moved partnerships, and contestability. Even in progress called Reinventing Government Canada and others provide examples. Most recently in our programme with the into “I need” and the government, with the the historic public monoliths of health and Again (Social Market Foundation). We found Key will be a new leadership capability that World Bank and the Isle of Man, we spent electorate’s blessing, moved to providing education, reforms in the last decade have patches of innovation and real progress but can carefully set and navigate different two weeks with senior government leaders not only the welfare state (witness the NHS attempted to stimulate performance (and still a reluctance to rely on the “devolved boundaries for state involvement; enable and from 24 smaller nations – all grappling with set up in 1948) but a vast array of public innovation) down to locally governed trusts, market” for politically visible services. work with multiple, flexible delivery methods reform and change in a turbulent world. services through nationalisation. The state as emerging private sector involvement and This has not been helped by the stumbling – including public, private and social In the UK this for me also included training bureaucratic (probably inefficient) provider, partnerships. By 2008 in the UK there were of private providers such as rail companies, enterprise; provide adaptive and strategic Tony Blair’s “government in waiting” at but with a “we know best” attitude, was in still, however, around six million people London Underground, British Energy and leadership for a complex and fast changing Oxford before their historic 1997 election. full swing. employed in public service but by now in indeed some notable banks – where the system, using central control wisely; and Since then I have joined various attempts The 70s and 80s brought a citizen who many different kinds of organisations. State has had to step back in control. find ways of empowering citizens and at modernising the UK government machine, said “I want” with a suspicion that hands- All this should have seen a change in The public still holds central government communities with new styles of democratic most recently chairing a UK Cabinet Office on state was the wrong answer. Thatcher central government’s role. In the US in the to account for hospital deaths, lost IT data, involvement in public services and active conference on public service reform and and colleagues deployed a first wave of 1990s Osborne and Gaebler’s Reinventing and late student grants fiascos. By 2008 the citizenship. working with leadership teams in different managerialism: efficiency, financial and Government set out a mantra for how public central Civil Service was admittedly down The Brown regime – or Cameron if the Whitehall Departments. The Brown general managers, and an ideology that the sector could be community-led with the from one million in 1960 but still comprises runes read right – will have to face up to government continues to battle with its own market – often private enterprise – would state concentrating on purpose and outcome 500,000 across Whitehall departments these challenges. agenda for transforming public services, but provide. Energy, water, transport, telephones and then “steering not rowing” the process. including a lot of front line “delivery” such is faced with doing it alongside major public were floated off. Central government started Surely the state cannot direct a large and as passports, tax and benefits offices. spending cuts. So what are we learning reducing its size in favour of arms length complex system such as the National Health What strategies are next for public Keith Ruddle is Fellow in Leadership, about new roles for government? agencies and providers. The state retained Service, which comprises 1.4 million people services and a new 2010 UK Government of Organisation and Change at the Saïd In the UK many return to an 1854 report critical control over defence, and law and and 20,000 plus organisations? New any colour? Impatient politicians and public Business School, University of Oxford. by Northcote and Trevelyan on the British order, and politically-sensitive education Labour, however, has perhaps achieved most demand a faster pace in finding solutions Civil Service which set the tone for public and health. success with centrally targeting key spending to problems such as health reform, poverty, service, then mainly a service to the Blair’s 1997 Labour Government and capacity on core areas of improvement: welfare to work, transport infrastructure and governing elite. Out of that emerged the tried continuing down this “new public hospital waiting times, school literacy, Sure now climate change. All this is amplified

28 Business at Oxford Public services strategy Public services strategy issue 16: Winter 2009 29 Fast Forward BY: SARAH BARRELL David founded his first After graduation, David was The company added the Gwyn is a firm believer in the Terry chose Oxford for his MBA Internet music enterprise, taken on as CEO of JamBase millionth live music show listing power of free marketing and because of its international inkblotmagazine.com in 1997, in 2006. One of his inaugural to its database this year and the success of these companies student body and convenient quickly moving on to create jobs was to raise a round of released a free iPhone app, was driven by low cost, high one-year programme. “The musicfans.com, which funding, something he swiftly a service providing users with value technology products, MBA at Saïd attracts a talented comprised 120 of the largest accomplished, largely thanks live show listings in their local and extensive viral promotion group of students and over half unofficial fan sites. One of the to winning the first Saïd area using GPS. “The iPhone using free software and free of my Oxford experience was sites, dedicated to the band, Business School Venture Fund app is one of a number of big business cards. interacting with these brilliant Phish, was owned by JamBase competition, which pitted the things we’ve done this year,” Gwyn’s most recent project is minds,” says Terry, who was founder, Andy Gadiel. company against 80 Oxford- says David. “It’s a good example iSyndica, started in early 2009. part of the Oxford team that Musicfans.com briefly owned related businesses. “It was of what we can do with our data. The company recently raised won the European final in David Rosenheim JamBase, but sold it back to great,” says David. “JamBase We now power AOL Music and US$500k of Series A funding Terry Beech, MBA this year’s Venture Capital CEO, JamBase.com Gadiel before the Internet had been bootstrapped and Billboard and have just closed and was chosen as “one of the co-founder, Investment Competition (VCIC). bubble burst in 2001. I was in the process of finding a deal with a large retailer. most promising web 2.0-related designtourney.com The company is currently avid Rosenheim David then went on to funding when we won the In coming months, through start-ups” by Silicon Valley seeking angel finance and will began his career consult for JamBase before competition. There were a lot partnerships, millions more based VentureBeat, and VC BA alumnus, put in an application to next during college beginning his MBA at Saïd of investors sitting on the fence consumers will find JamBase firm Canaan Partners. iSyndica Terry Beech year’s Saïd Business School D as a touring and Business School, drawn to the and it really raised confidence. in different platforms.” is an online service for stock has launched Venture Fund Competition. recording musician leading acts one-year programme because We ended up oversubscribing photographers, video producers M designtourney. like Hugh and The Weather of its entrepreneurial focus. the run – more than doubling it.” and illustrators to manage and com, which connects designers Band. Two decades, countless “I had gone from a career as JamBase is a search engine distribute their microstock to businesses seeking graphic musical allegiances and several a recording/touring musician to that includes tour dates from portfolio. The service eliminates design. It draws on a pool of professional incarnations later, running a VC backed company,” over 60,000 artists performing in the need to upload files to designers from 98 countries, he is now CEO of JamBase.com, explains David. “I learned a ton over 75,000 venues worldwide. several microstock agencies connecting them to clients one of the world’s leading on the job but felt there were Established in 1998, JamBase and social media sites by storing in all continents apart from sources of live music and many holes in my skill set. I had has grown into a half-million and distributing customer’s (as yet) Antarctica. Terry concert information. the entrepreneurial bug and strong community of live music files and providing them with launched the site this autumn I wanted to round out my skills fans. The company also provides statistics, all in one place. with co-founders, Doug Beech before launching my next top brands with music marketing It supports a growing list of (Terry’s brother) and coder, venture.” and data syndication solutions stock agencies and operates Arash Afrooze. and works closely with leading Gwyn Jones on Amazon Web Services (AWS), Terry started the company Rajeeb Dey concert promoters and record CEO iSyndica helping sellers to market more while completing his MBA. CEO and Founder, labels like Live Nation, AEG- electronic content and physical “Start-up businesses and Enternships.com Live, Warner Brothers Records wyn Jones (MSc products across multiple non-profit organisations don’t and Universal Records. Management e-commerce sites. need a logo that costs $1000- ajeeb Dey Research) is a “Oxford is a global brand, plus,” says Terry. “Traditional completed his G serial technology which gives you credibility design is slow, expensive MBA at the Saïd entrepreneur. A high-school wherever you work,” says Gwyn and ambiguous.” By contrast R Business School in dropout, Gwyn joined a who has worked in the UK, designtourney offers a detailed 2008, graduating as the longest Cambridge-area start-up that France, USA (Boston and brief, filled in by the client, serving President of Oxford went on to be one of the first UK San Francisco) and, currently, posted live to thousands of University society, Oxford tech IPOs. He has subsequently Singapore. “Singapore is an international designers. The Entrepreneurs. It’s only a year been involved in creating Serif innovation hotspot, thanks to designers submit their concept since his graduation but the – a UK-based graphics and massive government support and the client ranks the entries accolades look set to continue. publishing software developer during the economic downturn,” and provides feedback. Designs Along with being a recipient with around six million users – says Gwyn. “It’s said that are revised until the client of the Goldman Sachs Global and VistaPrint – a French online Singapore is investing the same selects their ideal. “The whole Leaders Award and the Waldzell printing company with 20 million GDP percentage in new start-ups process takes about a week and Institute’s Architect of the customers, now a US$2.5 and innovation support as the the fee (entry cost US$200) Future Award, in Autumn 2009, billion NASDAQ-listed company. USA is using to bail out bad goes to the winning designer.” Rajeeb was named Young banks. I’d encourage any Entrepreneur of the Year in the Oxford entrepreneur to consider O2 X Awards for his business Singapore as a potential location Enternships.com. for their start-up.”

30 Business at Oxford Alumni Alumni issue 16: Winter 2009 31 Alumni BY: SARAH BARRELL Launched in May 2009, charity, but it’s now much Managing the consequences Enternships.com is transforming more of an international and of fast growth is a key strategic the field of graduate recruitment. interdependent federation challenge faced by emerging- The company connects students of volunteering-based market multinationals today. and graduates to start-ups organisations.” Many have internationalised very and small-to-medium-sized David’s doctoral studies fast, early in their existence. enterprises worldwide who at Saïd Business School have “Finding efficiency and synergy provide entrepreneurial work influenced his work at VSO. across borders but remaining placements. Over 500 companies His thesis explored “meta good locally is a big challenge for have already signed up to offer strategising” – the political recently expanded companies,” internship opportunities in and social activity involved says Stephane. locations from London to Mumbai. David Dinkin in the genesis and design of How do these multinational The award was announced Consultant formalised strategy-making. companies deal with this at a national final held in “Great strategists – CEOs and challenge? For example, London this October, attended uring his 22-year strategic leaders – ask the right in the telecoms industry the by celebrity entrepreneurs consulting career, questions right up front about convergence of hardware and including Shaf Rasul, Will King David Dinkin how strategy comes to be in software technologies is creating and Nicky Kinnaird. Rajeeb D served clients organisations,” he says. new demands for integrated received the top prize of £5,000 across the international financial and wireless telecommunication plus business mentoring from services industry, focusing services. This brings about leading entrepreneur Michelle on issues of strategy and challenges in accessing resources Torsten Hoffmann, Dewberry, winner of BBC’s organisational change. In the and knowledge. For this, Sitting room an alumnus of the Said The Apprentice and founder mid to late 1990s he led both multinationals have to think Business School’s Executive of successful small online Accenture’s UK Insurance about their partnership strategy. business, Chiconomise. consulting practice and its “Multinationals have to MBA programme, brings Raj is heavily involved in European Insurance Strategy reconcile their global partnership the wilderness a bit encouraging entrepreneurship consulting practice. strategy with their local content closer with the launch in the UK with a strong At this time, he also became strategy and this creates background in social enterprise involved in helping various organisational trade-offs to of WildEarth.TV. and education. “Rajeeb is an not-for-profit organisations, most manage,” says Stephane. safari inspirational young entrepreneur notably VSO (Voluntary Services Stephane Girod “And convergence also creates and fully deserves to be named Overseas), with the formulation Accenture difficult organisational decisions as the O2 X Young Entrepreneur of their strategies. In VSO’s case around the management of of the Year,” said Simon this led to “Focus for Change”, tephane Girod innovation. How do they scale Devonshire, Head of O2 SME a new strategy which specified joined Accenture innovation globally to thrive on Marketing. “He has applied his where the organisation two years ago, after convergence and simultaneously own experiences to find a gap in would and would not work S graduating from leverage innovation coming from an already tough business field, geographically and what areas Saïd Business School with a local opportunities?” and has demonstrated business it would target with the objective DPhil in Strategic Management. In the oil and gas industry the acumen and insight far beyond of adding value from the centre As a Research Fellow with big challenge for multinational his years.” via a centralised operational Accenture’s Institute for High executives is to access resources planning process designed to Performance, he undertakes and get blocks for exploration he wilderness just got a bit in the Galapagos to polar bear tracking in (WildEarth.TV) to investors, so my course leverage resources, capabilities projects in areas that contribute and production in resource- closer, with the launch of Alaska. “Wildlife is my passion,” says should directly help me to secure funding.” and knowledge more effectively to the company’s thought rich countries. “They must WildEarth.TV, an interactive Torsten Hoffmann, Director of Distribution. Torsten was born and educated in across its network. leadership in the evolution of appear very committed partners T online channel broadcasting “TV audiences are increasingly moving to Germany and spent a year studying in In 2002 David left Accenture emerging-market multinationals, to local host governments and live safaris into your living room, office, or interactive, real-time entertainment and so Malaysia as part of an international business to pursue a range of new and in organisational strategy their national oil companies,” phone from South Africa. The channel is the far we are the only live wildlife channel. Our programme. On graduation he travelled personal and professional for multinational enterprise from says Stephane. “But they brainchild of Torsten Hoffmann, an alumnus format is more rugged than something like the world for a year before taking up a interests, including working in developing/emerging markets. also have to figure out how to of the Saïd Business School’s Executive National Geographic and has more impact – middle management position with Kabel executive education at Oxford “My thesis at Saïd was create global delivery methods MBA programme. and our production costs are much lower.” Deutschland (the largest German cable and starting his doctoral about reorganisation and that they will be able to roll out WildEarth makes use of social media Torsten began his Executive MBA when company). He decided to do an Executive programme. During this time he change management within across countries and that will such as Facebook and Twitter. Viewers can he started his company, Global Media MBA to follow long-held plans to start his was asked to join the main Board the organisational strategy field. strengthen their relationships ask the park rangers questions as they move Consult, an international consultancy in the own business and chose Oxford because he of VSO as trustee, with particular I do the same at Accenture but with local governments. Our around the game reserve, make requests and TV industry. The company represents 30 TV knew its EMBA programme would help build oversight of its ongoing strategic much more qualitatively,” says research project provides new follow up on animals stories as they develop. channels worldwide (including WildEarth) his entrepreneurial skills. and organisational development, Stephane. “It’s very applied answers to these questions.” This format goes beyond the realm of a and helps them access different markets. It “The network I built at Saïd has opened including now, oversight of the research with a bit of consulting traditional wildlife documentary allowing the works with channels as varied as Bloomberg many doors in the media industry and given development of further strategy work, giving companies a critical viewer to be, in effect, their own producer, Television, music, science, documentary me a better understanding of the venture reformulation. eye from the outside and programmer and co-presenter. and sports. It also develops new media capital scene,” says Torsten. “I now aim to “VSO has changed providing generalised global WildEarth.TV broadcasts daily at a select companies, which includes start-up take my involvement with WildEarth to the enormously and grown hugely,” research based on comparisons time from the Djuma Game Reserve in fundraising. “All my EMBA papers are next level by becoming a shareholder and says David. “When we first across companies.” South Africa. Eventually the channel aims to focused on developing the business,” says growing the company internationally.” formulated the Focus for Change cover wildlife in destinations worldwide with Torsten. “For my Entrepreneurship Project strategy, VSO was basically a UK the format suitable for everything from diving I will present this new concept channel

32 Business at Oxford Alumni Alumni issue 16: Winter 2009 33 hould we try to imitate the reducing the probability of exceptional to assess the situation could have been and settings in which chance, rather than can change a firm and may lead it to adopt most successful firms? performance. For example, working in the able to formulate such an accurate vision. the quality of management practices, less valuable practices. For example, high Firms that are exceptionally consulting industry, while attractive in many In a paper with Christina Fang at New York matters most. performing firms can afford to adopt the S successful and dominate ways, is unlikely to lead to exceptionally University we have argued, and illustrated Exceptional performance is more likely in latest management fashions. In this case, their sector, such as Microsoft, are often high income, at least when compared to experimentally, that an accurate vision industries where there are strong first-mover the latest management fashions will be held up as shining examples in the press what successful hedge fund managers earn. about the next big thing may in fact be an advantages or when “winners-take-it-all”. associated with high performance, even if and in strategy textbooks, while executives Of course, this does not mean that a career indication of defective judgment and poor In such settings, small differences between adopting the latest management fashions in other firms try to figure out the secrets in consulting is unadvisable. On the contrary, forecasting ability. firms are magnified and the winner achieves actually has a small negative effect on of their success. This focus on successful such a career probably has a higher expected Very few products become very high profits for an extended period while performance. More generally, firms with firms generally assumes that success is a lifetime financial value than a career in successful. Thus, it is very unlikely that losers have low profits.I n these settings, high performance may be under less sign that an organisation has been managed hedge funds, especially when we consider all the product in front of you will become a firm can achieve high and sustained profits pressure than firms with low performance effectively. That is, successful firms are the people who have tried but failed to make the next big thing. Rational managers, even if its products are only marginally to carefully examine the value of the more likely than less successful firms to be money in hedge funds. who are aware of this, avoid making superior to others. practices they adopt. efficiently managed and thus more worthy Many valuable management practices extreme predictions, unless the product Exceptional performance is less likely These cautionary remarks do not imply of praise and imitation. I want to challenge have a similar profile: they increase expected they observe is truly exceptional. In contrast, to occur in competitive industries with few that firms should imitate losers rather than this idea. earnings but may reduce the probability of less rational managers, who rave about any barriers to entry, unless of course some firms winners. But they suggest that managers I do not wish to contest the sensible exceptional success. In contrast, exceptional new technology, are more likely to think truly are much more efficient than the others should reflect more carefully on what is claim that efficient management is valuable success may require excessive and perhaps they have identified the next big thing. in that industry. The implication is that actually impressive in business and realise and increases a firm’s chances of success. irrational risk taking. Thus exceptional Most of the time such predictions will be off exceptional performance is more likely to that exceptional success may be due more What I want to point out is that it does not success can be an indication of poor rather the mark. But because these less rational occur in settings where it is less impressive. to luck and excessive risk taking than the follow that successful firms are likely to be than effective management. managers are more likely to call something Moreover, lower and less sustained quality of management practices. better managed than less successful firms. To illustrate this, consider the area of the next big thing, it is also more likely performance can sometimes be more The reason is that exceptional success is forecasting. Managers and entrepreneurs that such a manager will be the one who impressive, if it occurs in competitive likely to be influenced by many other factors are often assessed on their ability to forecast “succeeds” in forecasting the next big thing. industries in which high profits can only Jerker Denrell is Professor of Strategy in addition to effective management, the success of new ventures. Entrepreneurs In this way, accurate forecasts of the next be achieved by being much more efficient and Decision Making at the Saïd Business including risk taking and luck. As a result, and managers who can “see what is next” big thing will be associated with defective than others. School. exceptional success may be a poor indicator and successfully invest in the “next big management practices. Finally, it is useful to remember that of efficient management. thing” become rich and may end up on the Another reason why exceptional imitating the practices of exceptionally To understand this, it is important to cover of business magazines. The implicit performance may be a poor indication of successful firms may be dangerous if these realise that there are some practices that assumption is that only someone with effective management is that exceptional practices are the result rather than the cause increase average performance while good judgment and a remarkable ability performance usually occurs in industries of high performance. High performance success stories Imitation may be the sincerest form of flattery, but it is not necessarily the best route to success, argues Jerker Denrell.

34 Business at Oxford viewpoint viewpoint issue 16: Winter 2009 35