Innovative Russian Managers Catch IMD?€™s Eye

To maintain its leadership, management school IMD will no longer be a mere onlooker. The future is in partnerships among schools, companies and governments to develop jointly new management practices, said Sean Meehan, dean of external relations.

The IMD business school was among the pioneers of nonclassical — that is, non-university — business education. Created almost 20 years ago from the management centers of Alcan and Nestle, it revolutionized business education. The school doesn’t offer lifetime tenure to its professors, it uses a modular scheme for its EMBA diploma, one-third of its expenses are on developing new management practices and half of its income comes from cooperation with companies.

The school is constantly in search of new ideas, and now it’s looking to be more drawn into its clients’ business, including sharing responsibility for mistakes. Meehan made his first trip to Moscow to find companies that are interested in such experiments. How that will work, he shared in an interview with Vedomosti.

How did the economic crisis affect your business?

Business schools themselves were almost untouched by the changes, especially universities’ classical management schools, which change slowly. Now consulting companies are trying to enter the corporate-training market, which will introduce some novelty to the training process.

Schools like ours are far more mobile, and so we’re also continuing to develop. The corporate sector has long accounted for half or our portfolio, and we’re glad that during the crisis there were more companies that decided to move forward, making new requests of us, than those that cut their investments in training and developing strategies. So, on the one hand, the key changes on the market had a beneficial impact on us and we didn’t have to do anything hastily. On the other hand, we did scramble to renew ourselves, although I can’t say that it was exclusively a reaction to the crisis.

If it wasn’t the crisis, what was the stimulus for innovation in your school?

We didn’t start introducing programs on “how to overcome the crisis” or “how to survive the crisis.” Some other schools did, and not very successfully, but I don’t really see the point in it. Preparing managers is a middle- to long-term process.

We want to be more flexible. We opened a new module for that called the Accelerated Executive Development Program (AEDP), which is analogous to our traditional Program for Executive Development (PED). The difference is that now the student spends just three weeks in school, instead of five plus five weeks, although the total course of study still lasts 12 weeks.

We think about what leadership means today. There are capable managers who have worked to accomplish something for several decades, but they have gotten used to working under certain conditions. Now we’re seeing structural changes in the economy and we need to ask whether these people who are planning to become leaders are fit for the task. This year we opened the program Leading the Global Enterprise (LGE), which seeks to find an answer to the question about new leaders. We have to ask our current managers whether they’re ready for sovereign wealth funds, for private equity funds and family businesses to play a significantly larger role on the market? Whether they’re ready to work amid the strengthening of new centers such as Brazil, Africa, China, the Middle East and South East Asia — with a new polarization that has come to replace the East-West scheme? The world has really changed. And the world of politics has become a significant part of business all over the world. In Western Europe, governments have become owners. But the government as a shareholder is now an entirely different market phenomenon than before. And you’ll have to borrow from it, do business with it. It’s a tremendous shift, and I think its consequences still haven’t been entirely realized. We decided to create this program to find out whether the problem is being discussed seriously enough and to re-orient people for this new reality.

What do you see as the future of business education? Several global alliances of management schools have been created over the past few years.

I believe that to stand apart, and accordingly, to thrive, business schools need to become a part of the system, and not remain onlookers or analysts. They need to participate in decision making and become laboratories to develop new management practices.

There’s one way to achieve that. Management schools can’t act alone and not just with other schools — they need to cooperate with humanities institutions, governments, companies and members of the media market. That cooperation should be part of a market model, although that’s still nontraditional. We don’t have that much experience with cooperation, and neither does the industry. We’re concerned about intellectual property rights. But we believe in the free and open exchange of information among schools, even though it could possibly harm us.

Even more so, we believe that our biggest potential partners are our clients. One of the things that companies are asking us to do more than they used to is to join them on the path toward growth and reforms. “Be our partner, become a part of our business,” they’re saying to us. That’s a very difficult task for us, and we’re looking for the most interesting ways to assist them.

What would that sort of partnership look like in practice?

We have always sought to work with companies that are achieving changes. Such companies are the source of innovation in our portfolio, including those two new programs that I already mentioned. Thanks to these companies, we created the new five-day program Orchestrating Winning Performance (OWP). We completely restructured it based on comments from last year’s participants. It’s a standard situation where you need to renew a program instead of waiting for misfortune to overtake it.

I’ll offer another example of a client, a global telecoms company with its headquarters in Europe. They felt that the company did not have enough marketing knowledge and that they weren’t doing enough to sell themselves to the market. “We have a plan, but we don’t think our staff is adequately prepared to carry it out. We need some intervention from the side,” this client told us. I searched the world over before finding in Latin America a candidate to develop the plan and actively intervene in the client’s work. We went to the company and told them about what we could do for them, and we were given carte blanche to carry out the plan. We started working with the client’s top managers, constantly modifying the program because the situation was quickly changing as we implemented it.

You came to Moscow to find such clients?

The conditions for innovation are better in Russia than in many stable markets because the mangers here are young and have learned how to overcome gigantic obstacles in order to achieve changes. So we’re interested in looking for people here who share our views.

How should partnerships between business schools and governments be formed?

More than 20 years ago we formed business relationships with governments and government holding companies in developing countries, such as China and Brazil. We worked with academies that trained state officials, who were then often sent to work in those holding companies. We’ve known this model for a long time, and I believe it will be very important for us in the future. Cooperation with such companies includes the development of programs and the search for ways to create business models that conform to the government’s strategy.

There are a lot of new programs being carried out in Russia now, such as Rusnano, and the government deserves a lot of credit for that. I know that a lot of these programs are criticized here, but around the world they’re seen very positively. Certainly, such programs should be assisted by organizations from around the world — not just from Russia.

Lately, we’ve had more corporate clients from Russia whose shares are traded on international exchanges. We’ve also had officials study with us, but Russia doesn’t have a whole system for training officials like, for example, China. One of the goals of our visit to Russia is to determine to what planning in this regard is possible.

If you want to cooperate with governments and companies as partners, are you planning to share with them the risks from mistakes?

We are going to carry responsibility for mistakes made when actively intervening in a business, that’s correct. Is it easy to dictate your terms and force people to do something if you’re not doing it together? We still haven’t totally decided this for ourselves, and we don’t know how it will work or what the right model will be. Nonetheless, we believe that we’re more closely tied to business than any other business school in the world. Our goal is to do what’s needed for a business to work. This is a very interesting time for us, a time of grandiose changes, when the very future is forming. How could you refrain from taking part in that?