Introduction
Andrew Kakabadse is professor of international management development at Cranfield Business School. He was the H. Smith Richardson Fellow at the Center for Creative Leadership, North Carolina, in 2005–06 and is a visiting professor at the University of Ulster, Ireland, Macquarie Graduate School of Management, Australia, Thunderbird School of Global Management, Arizona, Université Panthéon-Assas (Paris II), France, and Swinburne University of Technology, Australia. His research covers boards, top teams, and the governance of governments. He has published 37 books, more than 220 articles, and 18 monographs. Kakabadse is coeditor of the Journal of Management Development and Corporate Governance: The International Journal of Business in Society. Among his most recent books are Bilderberg People: Elite Power and Consensus in World Affairs (with Ian Richardson and Nada Kakabadse), Rice Wine with the Minister: Distilled Wisdom to Manage, Lead and Succeed on the Global Stage (with Nada Kakabadse), and Global Boards: One Desire, Many Realities (with Nada Kakabadse).
If there are general competencies that all managers need, why are so few generic management development programs available from business schools? Why is there such a marked preference for bespoke courses?
The simple and straightforward answer is that the requirement to “skill up” a particular management cadre is almost always raised as a specific issue inside an organization and is driven by events and by the operational context of that organization. At the back of it there is always a problem that needs resolving. Every expenditure by a company or a public body needs to be justified. There is always at least an ad-hoc cost evaluation of the anticipated benefits against the probable costs. So, training initiatives at a senior level, which cost significantly in terms of time and money, have an inertial weight against them to begin with, and very few organizations are prepared to embrace the idea of generic training for senior management. They will sponsor or partly sponsor MBA candidates at lower to middle management level, but that is a different thing altogether.
This being the case, business schools have generally eschewed the idea of putting on generic management development courses, even though you could specify general management competencies that could go into such a course. Courses like that simply would not sell a sufficient number of places. As a result, management development training has evolved as a bespoke discipline geared to meet the particular challenges and problems of specific client organizations.
Is there much common material from course to course, or does everything have to be developed from scratch on each occasion?
The courses tend to have some basic elements that are common to all or to most courses, such as an introduction to leadership, or some of the psychological profiling that we use. But the challenges that the client organizations face make the courses very different from each other. There can be targeting by level, by function, and also by region or division within the organization.
Does the client organization, then, already have a clearly articulated sense of the business or operational challenge that it is facing when it seeks to enlist the help of a business school in developing a course for its management team?
It may, or it may just have a sense that its performance in particular areas is not at an optimal level, or is falling behind by comparison with the competition. Clearly, an organization that is about to undertake a major initiative or new project will be faced, fairly sharply, by the challenges associated with that venture. But even here there is usually a substantial amount of work to be done by the business school in refining the perception of the problem so that the course can be targeted more specifically. Clients will, in general, have a pretty clear sense of what is causing them pain. They have a sense of the damage that is being done or will be done to the organization through people not having sufficient competencies in particular areas.
In this sense, if one steps back and looks at the exercise as a whole, the criteria for the success or otherwise of a particular management training and development initiative are fairly sharply delineated—which is clearly a good thing, both from the client’s perspective and from the standpoint of the business school.
Success means that either some area of the business or the organization that was problematic is solved and is perceived to function more smoothly, or the pain associated with getting some new project off the ground, such as a major expansion in a new region or country, is eased. The benefits in each case are palpable and are seen as justifying the intervention.
A far more difficult problem, in many instances, is not how to judge success, but how to get the client organization to open up and allow light to be shed on the real problems that they are having. You have to remember that, in most instances, the project will be initiated by a telephone call and the person making the call may be unable or unwilling to specify the problem at anything like the required level. Our first task, then, is to work at defining the problem to our own satisfaction and to the client’s. Then we have to make a judgment about whether that problem is such that it can be helped significantly by our intervention. What can we do, and will what we do make a sufficient difference?
It may well turn out to be the case, when the problem is properly analyzed, that what is required is not management development training but some transformation in operational procedures which the organization may or may not be willing to make. Problem analysis can be a very complex and demanding field. It is a field in which we have acquired a great deal of experience and skill over the years, and part of that skill is recognizing when we can usefully be part of the solution and when we probably cannot.
Is there a significant overlap between the analysis and fact finding that has to be done to specify the type of management development project that will suit a particular organization and the work that a business consultancy would undertake?
There is a great deal of overlap, but of course the aim of a business consultancy is very different. It is usually concerned with business process transformation of one sort or another. Our role is simply to understand the problem or set of challenges that is being faced and to then define what that means in terms of management competencies. However, because the starting-point is always the business as it is—with all that means in terms of internal politics and the dynamics going on inside the organization—getting to the heart of the problem can pose its own significant challenges. It may be, for example, that the processes or strategies devised at the center, at head office level, for example, are not working at a regional level for reasons that no one has clearly articulated. Getting people to speak up honestly and clearly so that we can design the appropriate course for them can be a nontrivial exercise!
The precontract phase of the relationship, then, between the business school and a prospective client will often involve multiple meetings, negotiations, and renegotiations. This whole phase—before there is an agreed contract for a management development project—may take anything from nine to 18 months.
How important is management development as a revenue stream for the business school?
The whole business of executive development is a major part of Cranfield’s budget and is a very successful part of our operation. But it has not been easy to grow this side of our business to its current proportions. The market for management development is a very sophisticated one. If you look at the corporate market, a company’s value proposition can differ markedly depending on where in the world it is located. In Asia, for example, the focus when it comes to defining the value proposition could be on excellent customer service and delivery. In a developed market the focus may well be on discipline on costs, given the competitive pressure on margins. So it would be a mistake for a business school to develop too generic an approach to management development.
Under tight economic conditions, for an organization to achieve its value proposition depends on the whole of the top team identifying with the proposition and pushing hard to achieve it, irrespective of how it plays in their particular locality. Client companies know this, and they are very sophisticated buyers. They are well beyond generic programs. They want fundamental skill building that will give them the capacity that makes the difference for them and will enable them to outperform the competition, or at least to bring them up to the point where they can compete against the best in their class.
Of course, we do run functional programs, such as courses on financial skills for nonfinancial managers. But these courses are aimed at middle management groups—for example, specialists in sales who have not been exposed to finance. These programs assist individuals, but they don’t make the real competitive difference that companies are looking for from management development. An example of a more generic course that addresses the ability to make a real difference would be a course on strategic leadership for CEOs, or the nonexecutive course we run specifically for board members.
For a CEO-level course, what we would be looking at is a workshop approach. This might involve, say, a finance director who has been identified by the organization for the top role coming in and working through a series of problem-solving workshops around the role of the CEO and the issues the CEO faces. The content here, in other words, is the experience that goes with the role, rather than a specific competency such as leadership.
What does the business school bring to the party that the organization itself could not provide as an internal initiative in management development?
The business school, if it is a top school, will have faculty that has a history of in-depth research into management issues, and whose members have worked with CEOs from all kinds of organizations and with government officials and ministers. So there is a wealth of experience there to draw on. Plus, of course, the act of running a program like this for a number of years means that you have built up a considerable body of experience in working through issues with companies, helping them to define their problems and to propose solutions. On top of this, there is the business school’s familiarity with techniques such as psychological programming, which looks at how an individual could improve him- or herself in a particular role. All this is a long way from a generic course and it is also, in general, outside the competency of organizations, which have other skills and goals.
We also bring a considered sense of the global context in which the business or organization operates. The business person, for example, who thinks that politics is a mug’s game and ignores the political context of the country in which the organization operates is flying blind. A CEO who does not know how to respond to a situation of risk or bribery, or who has not considered the implications for their organization of the various antibribery acts now in force in the advanced economies, is on perilous ground. So we have workshops for CEOs, chairmen, and board members to enable them to make themselves very aware politically, with politics here having both a small “p” and a large “P.”
We talk about the necessity for senior management to be at the appropriate level on all three of the “Qs”—namely IQ, EQ, and PQ—the last two referring to their emotional awareness index and political awareness index. All three are important for anyone aspiring to be an organizational strategist. This point is taken better in some countries than in others. Senior management in the United Kingdom, for example, tends not to be particularly context aware.
Many of our clients are from continental Europe. The Germans and the French are much better at realizing the need to contextualize themselves. Senior management of a German or French company going into real estate in Kuwait, for example, would read up on Islam and would do a fair amount of research on the country and region. The British would be likely to focus almost exclusively on real estate values and their probable trajectory. Sometimes that specificity of focus works well, but the risk is that you get blindsided by events that are predictable when seen in a wider context. Political risk is not the least significant of the risks that organizations run when they develop abroad.
One of the weaknesses that we see in both UK and US companies at a senior level is that in today’s globalized environment senior management does not understand the movement of monies, of capital flows, around the world and the impact this can have on economies. Again, that is a contextual issue that can have a significant bearing on the success or failure of operational decisions.
Bespoke management development puts the business school in very close contact with the client organization and is very high-profile. What are the risks to the business school?
Clearly, if you take on an assignment and the intervention is judged to have not delivered the expected value, you have failed and your reputation is at risk—not just with that organization, but with their entire network, through network effects, which are a crucial source of business for business schools.
So, if you are leading this kind of contract, there are things that you have to ensure in order for you to be able to agree to take on the project in the first place. First, you have to be confident that you have clearly defined the problem which the organization is facing, and getting to the heart of this can be a very demanding and nontrivial exercise. You can be faced with several competing, politically influenced versions of the problem from various quarters inside the organization, and you need skill and experience to cut through this to the core of the matter. It may be that things are too fluid in the organization and that there are multiple conflicting issues for which there is no immediate resolution, given the current state of affairs. All you can do then is to present matters as you see them and be prepared to walk away if things cannot be brought into focus. In other words, the business school must not be hell-bent on winning the contract at all costs. Being prepared to say that, as things stand, you cannot proceed is key. The same goes if the problem, once defined, is outside your main competencies as a business school, or does not require those competencies.
Second, you have to achieve the right time frame to deliver the course. Third, you and the client organization have to be comfortable with each other. If they recognize that your definition of their problem is right but they are not comfortable with you, that would be a very strong reason not to proceed and to pass the client on elsewhere. For all these reasons management development remains a challenging field, but it is hugely rewarding for all the parties involved.
www.qfinance.com