4th Graduating Class of the Global Executive MBA Program
Respect People, Make Money, Have Fun

Borrowing the motto of the Netherlands-based multinational company where he worked for over 23 years until his retirement in 2002, Storm promised his speech would be memorable, and it was. As IESE Dean Jordi Canals noted afterwards, “Mr. Storm is an example of a business leader who has shown vision and leadership in developing and growing a great company, based on human and ethical values, while at the same time exhibiting his trademark sense of humor.”

Storm’s entertaining address contained some very serious advice: “If you give respect, you get respect back. If you start giving trust to people, they may start trusting you, too,” he told 35 members of the Class of 2005, representing 17 different countries, including a significant number from the U.S. and Germany, as well as the Philippines, Canada, Russia and Latin American countries such as Brazil, Chile, Ecuador and Mexico.

“Respect people” included practical advice such as “call customers back if you have promised to do so”; “deal with complaints in a professional way”; “don’t go home with unfinished work that you leave for your colleague to pick up the next day”; “maintain a balance between your business life and your private life”; “take good care of your body - exercise, don’t smoke, eat less and drink in moderation.”

In short, he said, “Do to others what you would have them do to you.”

This virtue of considering the needs of others also influenced his second piece of advice to “make money.” “Make money means contribute,” he explained. “Contribute to your company and to your society. Add more value than you subtract. Give more than you receive.”

Finally, his call to “have fun” was not as frivolous as it might seem, as underpinning this advice was an important point about recognizing people and their good performance when goals are achieved. “Recognition and encouragement are so important for everybody,” he said. “It is so worthwhile to put some effort into thinking about some fun and creative ways to do that. Make people smile - a day without a smile is a lost day.”

Adriano Morozini, representative of the Global Executive MBA Class of 2005, echoed these sentiments in his own address when he stressed our interconnectedness as fellow human beings. “Our decisions have greater consequences - on the environment, on society at large, our health, our family, our relationships. The world needs us not only as managers, but as people.” Borrowing a famous quote, he added, “We are, each of us, angels with only one wing; and we can only fly by embracing one another.”

Both speakers firmly underscored IESE’s mission, which was summarized by Dean Canals as “to make the world a better place through management education and leadership development, based on the principles of professionalism, ethics, social responsibility and spirit of service.”

This founding mission, Dean Canals said, was especially worth remembering this year on the 40th anniversary of the IESE MBA program, the first such program to be offered in Europe, which was recently ranked No. 1 in the world.

MBA Career Forum 2005
Hot Year Forecast for Recruitment

IESE’s Career Forum, one of the largest such recruitment fairs in Europe, took place Oct. 24-25 on the Barcelona campus, featuring 36 multinationals who made presentations and conducted interviews to recruit MBA students for full-time positions with their companies. Typically, some 40% of the year’s recruitment takes place during the forum, though that figure is likely much higher, considering that 98% of IESE graduates from the Class of 2005 are currently employed, and most of those jobs were secured as a result of Career Forum contacts.

This year’s recruiters at the Career Forum were evenly divided among banking, consulting and industry. Banking saw one newcomer, Credit Suisse First Boston, while there were six newcomers in industry: EADS/Airbus, UCB, Philip Morris, Grunenthal, Google and Schneider Electric, who helped sponsor the event along with Citigroup, Banco Sabadell, Mercer and Lehman Bros.

According to Rosie Innes of Career Services, the consulting sector was on a big recruitment drive this year, which is normally the barometer that employability is going to be high again across the board. She also said that “IT is back” after the burst bubble of a few years ago, as evidenced by Google’s huge expansion plans across Europe. Furthermore, with the pharma and biotech sectors facing patents expiring and generic drugs coming onto the market, she noted that these sectors are in urgent need of new talent to tackle these challenges.

“For Booz Allen Hamilton, the Career Forum was a big success,” said Ralph Maenen, an IESE alumnus who represented the company at the event. “Everything at IESE was perfectly organized and the program ran smoothly. We held over 40 interviews with second-year students. They were well prepared and had interesting questions. With graduation only a few months away, it is nice to be able to help people define the next step in their career.”

Another IESE alumni, Josh Elboim (MBA '04), said the Career Forum was critical to his own success: “It was here that I began my conversations with Morgan Stanley that resulted in being recruited for the Summer Associate Program and subsequently receiving a full-time offer to join the firm in London. Having experienced both sides of the student/recruiter equation, I understand the challenges that both parties face – and the IESE Career Forum is the perfect opportunity to start the dialogue and bring us together.”

Moving an Old Bank into the Top
Sándor Csányi moved SLOW BANK INTO THE FAST LANE

Investing in state-of-the-art IT and introducing an incentive system that rewards good performance were two steps that Sándor Csányi said were key to transforming an old-fashioned, inefficient bank into a highly profitable one that is now considered one of top in the world.

Csányi, the CEO and chairman of Hungary’s OTP Bank, spoke at IESE Business School in Barcelona on Oct. 20, inaugurating the first of this year’s Global Leadership Series. Speaking on the subject of “Corporate Transformation in a Transition Economy: The OTP Story,” he shared his professional insights with MBA students on the challenges to succeed in a transition economy such as Hungary’s.

When Csányi joined OTP in 1992, the formerly communist government of Hungary was at the start of a difficult process of privatizing state-owned businesses and implementing necessary economic reforms. According to Csányi, the perceived wisdom at that time was to sell off state companies to foreign buyers, in order to attract investment and expertise from the West. “But I went against the government, relying on Hungarian management and focusing on a clear strategy,” he said. One of the key goals in this strategy was to become a leading player in the region, which OTP achieved by being the first to enter many new and innovative product segments, ranking No. 1 in securities trading, investment funds, pension funds, bank cards and mortgage loans. “We’re among the best in the world in offering mobile banking - there are perhaps only five banks in the world who can match us,” he said.

The bank has made inroads into Slovakia, Croatia, Bulgaria and Romania, with plans for future expansion into Serbia, Ukraine and Poland, he said. A share-price growth of 50 times in euro terms over the last decade led Forbes to cite OTP as one of the 400 most attractive investment opportunities in the world, and Business Week listed OTP among the 1,000 most valuable companies in the world. Csányi predicted net profit this year of €700m, up from €560m last year. Having established a corner on the market in Central and Eastern Europe, he said his next ambitious target was “to become one of the biggest banks in all of Europe within the next three years.”

No doubt OTP’s success can be attributed to Csányi’s single-mindedness, playing to the bank’s strengths in retail banking, and centralizing sales into a unified, well-coordinated system based on a solid IT platform. Compensation is based on performance criteria: “People like to make money, but more importantly, they like feedback on how well they’re doing,” he explained. Employee productivity and efficiency have improved, which translates into better service for the bank’s clients. Csányi said an opinion poll in Hungary showed public trust in OTP was higher than for the government, indicating a high degree of customer loyalty.

Yet, as Csányi admitted in his final analysis, “As important as good management tools and hard work are, luck has as much a role to play in determining success, because nothing is ever secure.”

Csányi, who belongs to a number of other professional bodies, including sitting on the board of MasterCard, also revealed that his eldest son is thinking of studying at IESE next year.

Head of Britax Shares Leadership
Tips with Global Executive MBAs
PAUL SCOTT FLEMING TALKS ABOUT LEADERSHIP AND STRATEGY

“The most basic task of a leader is to unleash the human spirit, which makes initiative, creativity and entrepreneurship possible in delivering a strategy.” That was one of the secrets of successful leadership shared by Paul Scott Fleming, a high-flying senior executive with 27 years of international business experience, when he addressed the Global Executive MBA Class of 2005 on Sept. 28.

Fleming’s visit was part of a student initiative to invite high-profile managers to share their professional insights with Global Executive MBA participants. It is yet another way that IESE is able to impart expert knowledge outside the normal classroom context.

Fleming is the managing director of Britax Childcare Ltd., a world leader in child seats and wheeled goods. Previously, he was president of Volkswagen Brazil - the largest car manufacturer in the southern hemisphere and Volkswagen’s largest manufacturing base outside of Germany. In Brazil, he brought the business back to market leadership and profitability after a five-year history of losses. Prior to that, Fleming was CEO of Europcar UK, still within the Volkswagen Group, where again he delivered sustained profitability after 11 years of losses and steered that company through cultural change. Fleming has also held managing director, sales & marketing and engineering roles in blue-chip multinational companies such as Delphi Automotive Systems, BREED Technologies, TRW, Jaguar and Rover, where he began his career in 1978.

With such an auspicious background, Fleming was in a qualified position to talk to Global Executive MBA participants about the importance of character in meeting performance goals and realizing the full potential of a business.

He said successful leaders will “promote action and set increasingly higher standards” as well as have “honesty and integrity, disciplined intensity, the ability to inspire and the passion to help others learn, grow and perform.”

Qualities such as “honesty and integrity” and a desire to develop people echoed the emphasis that IESE places on the human values, ethical dimension and social responsibility of doing business, which is enshrined in IESE’s philosophy of business education. He also talked about the key skills needed to be a successful strategist: as well as having the “analytical and tactical knowledge of the business,” leaders need to have “drive, attitude and the ability to stimulate thought and motivate action.”

Apart from what makes a good leader, Fleming warned against the following recurrent mistakes: “not knowing when to walk away from bad strategies; failure to change team members quickly enough; failure to follow-up, which promotes passive resistance; lack of clarity in responsibilities and reward structures; declaring victory too soon; and neglecting to change the culture.”

IESE and Fundación ONCE Provide Grants for Physically Disabled
Two study grants will be offered under the agreement

On October 18, Fundación ONCE and IESE signed a joint agreement to provide study grants to people with physical disabilities. This agreement, part of Fundación ONCE’s “Combating Discrimination” program which is jointly financed by the European Social Fund, was signed by Carlos Rubén Fernández, President of Fundación ONCE, and Jordi Canals, Dean of IESE, at the school’s campus in Madrid.

Two study grants will be offered under the agreement, one to fund a place on the Executive MBA Program and the other to provide assistance with other programs at IESE. Moreover, IESE and ONCE have agreed to carry studies out with a view to facilitating access to other educational programs offered by IESE and the possible inclusion of more physically disabled students in the future.

IESE has also set out its intention to provide further assistance in this area, with the implementation of several measures: the recruitment of physically disabled employees at the school, the purchase of goods and services at Special Employment Centers run by the ONCE Group, the preparation of studies and publications that will provide greater awareness of the daily problems faced and the promotion of activities to assist the creation of jobs for disabled employees.

New MBA Website
THe IESE mba PRogram presents a groundbreaking SITE

IESE has recently launched a groundbreaking new website for the MBA program, featuring a virtual visit to the Barcelona campus and video footage of students talking about the MBA.

Taking center stage on the site are MBA students Ann Kohatsu and Bill Hargett, both from the United States, and Sol Magaz, from Spain, who explain the unique features of the MBA and the experience of studying in Barcelona. Faculty members with leading roles are Prof. Francisco Iniesta, MBA program director, who explains the methodology and academic emphasis of the program; Prof. Paddy Miller, who discusses the importance of research at the school; and Prof. Johanna Mair, who gives visitors a glimpse of IESE’s dynamic and interactive classroom environment.

“The idea behind the site was to really bring the program to life, rather than simply transmit information,” said Eve Goldman of IESE’s website team, who spearheaded the project. Through the interactive features, visitors get a realistic picture of what it's like to come to Barcelona and do the MBA.

The first challenge, however, was to find MBA students who would be willing to participate in the project, which took roughly two months to carry out, Goldman said. “Fortunately, it was easy to find MBA students who were very enthusiastic about participating in the new site, and talking about their own IESE experience,” she said.

Developed by the Barcelona-based firm Vasava, the site takes visitors around the campus, as well as around the city of Barcelona. The new site has been developed at a critical moment, when the internet has become the number one way to reach potential MBA candidates around the globe. Since virtually all applications to the program are currently received via the internet, the impact of an effective website is paramount.

The MBA department invites MBA alumni to visit the new site and send us feed back!

Entrepreneurs for Growth Summit
Al Gore Advises Entrepreneurs at Europe’s 500 Summit

The annual “Entrepreneurs for Growth Summit,” supported by KPMG and Microsoft, was held recently at IESE in Barcelona. Participating in the event were Al Gore, former U.S. Vice President; Alejo Vidal-Quadras, Vice President of the European Parliament; and Karl-Heinz Grasser, Minister of Finance of Austria. Many of Europe’s top 500 entrepreneurs also attended.

The conference organizers presented a special award for enhancing the business enviroment to Austria, handed over to Grasser, who accepted the prize for Austria and for the Austrian workers and entrepreneurs. A number of awards were also presented to European companies for excellence in key areas. IESE’s participation in the event was led by Prof. Joan Roure.

Europe’s 500-Entrepreneurs for Growth is a pan-European membership organization gathering growth entrepreneurs (fast-growing entrepreneurs or “gazelles”). It represents more than 2,000 growth entrepreneurs who have been listed and awarded at least once under the Europe’s 500 initiative. The president of the organization is Martin Schoeller.

In addition, the group develops suggestions to improve the European growth policy and, in this context, Vidal-Quadras emphasized the need to remove barriers that still make Europe significantly less dynamic than the United States.

Former U.S. Vice-President Gore stated at the conference: “We’re in a time of great transition, and those businesses more likely to be successful and sustainable over time are those with the ability and vision to look past the quarterly report.”

Gore, who currently sits on the board of Apple and advises Google, knows something about entrepreneurship himself, having set up Generation Investment Management - a fund that takes into account long-term value creation and environmental sustainability - and Current TV, an alternative, interactive cable TV channel that involves the younger generation in producing program content. Gore urged Europe’s entrepreneurial leaders not to make the false choice between the environment on the one hand and economic success on the other, which needlessly pits the business bottom line against the interests of saving the planet.

Dean Jordi Canals said, “Europe must not be more interested in or satisfied with only protecting its glorious past, but must create a future and a true land of opportunities for entrepreneurs.”

20th Annual Automotive Industry Meeting
Shifting into High Gear

The industry gathering with the most long-standing tradition at IESE once again brought together the most prominent business people and executives from the automotive world at the IESE campus in Barcelona, called by Professor Pedro Nueno and Juan Llorens. With 20 years under its belt, on this occasion the joy of the anniversary was tempered by concern about the future of the sector in Spain, and new challenges on the horizon.

The Automotive Sector and China

The data are alarming: China is already responsible for 10% of world automobile production. The major Western and Japanese manufacturers have already taken up positions in a market yet to be exploited. Nevertheless, the Chinese industry is growing and “threatening” to unleash itself on the Western markets within a short time.

According to experts such as Jan Borgonjon, President of Interchina Consulting, “the presence of companies in the sector in China is a must. Compared to India, Eastern Europe or Brazil, China is indeed a threat.” In fact, Chinese companies are passing all their subjects with flying colors: they are improving their engineering, levels of quality and so forth. For this reason, in the next few years a massive “landing” in the West may well take place.

Shen Ningwu, General Secretary of the Chinese Association of Automobile Manufacturers, which represents 1,300 companies throughout the entire country, expressed caution to the European business community and underscored the fact that Chinese companies must evolve and improve their production systems – “something that does not happen from one day to the next,” and that some distance still remains until they reach the degree of competitiveness similar that of the automotive giants. “We are aware,” he pointed out, “of this fear of Chinese products entering the European market. Many Chinese brands are thinking about Europe. Don’t worry. There are many Western manufacturers that have entered in China. Why wouldn’t the opposite happen?"

Nevertheless, Professor Pedro Nueno highlighted certain causes for optimism among European producers, remarking that costs in China have already begun to rise. “If we continue improving and costs continue to increase in China, there will be no flood and the companies that have acted soundly will remain.”

IESE's CBS Publishes Guide on Sustainable Business
the values of good governance APPLIED TO daily business life

On Oct. 21, IESE’s Center for Business in Society presented its new guide for implementing a code for sustainable business. The idea for the guide emerged from the establishment of the
code, which was first presented two years ago.

Professors Joan Enric Ricart and Miguel Ángel Rodríguez led the initiative within the activities of the CBS, with the support of Mutua Universal.

The aim of the guide is to provide guidance for boards of directors interested in following sustainable business principles. It includes a self-diagnosis tool, useful for clearly identifying areas for evaluation and how to move forward in sustainable business activities, as stipulated by the code.
At the same time, the guide facilitates learning within companies on the topic. It serves to increase the general wealth of knowledge about sustainable business among companies. As a growing number of firms are becoming more transparent about their governance practices, the guide provides a key resource that furthers the development of success through sustainable business practices. A central part of the guide is a model for reponsible and sustainable businesses that emerged from the analysis of 18 leading companies that are listed on the Dow Jones Sustainability Index.
The guide discusses in-depth the practices of good governance and covers topics such as corporate responsibility and sustainability. Until now, good governance has been viewed from the perspective of defending the interests of the small shareholder and avoiding conflicts of interest between owners and management. However, good governance must also also take into consideration company partners, clients and society in general.
The guide was created under the auspices of a governing committee that includes 70 presidents and board members and more than 20 community leaders.

Base of the Pyramid: IESE Creates a Global Laboratory for Learning
project is led by IESE’s Center for Business in Society

The laboratory is an initiative of the Center of Business in Society, and its mission is to help developing nations foster economic development through the creation of enterprises that respect cultural diversity, the environment and add to the quality of life of the community.

An inaugural event marking the launch of the project was held recently at IESE’s campus in Barcelona. It included the participation of the learning lab’s board of directors. The project is spearheaded by IESE professors Joan Enric Ricart and Miguel Ángel Rodríguez.

A diverse group of international institutions, businesses, non-governmental organizations and academic entities are participating in the learning lab. The lab seeks to help the planet’s most disadvantaged societies, which are mired in poverty and which represent one-third of the human population today.

The lab will lend support and guidance to companies that contribute toward the betterment of communities through the establishment of viable businessess, and which serve the 4 billion people who constitute the base of the pyramid.

Some of the principles that must underlie such new ventures were discussed at the meeting. They include respecting cultural diversity, the environment and contributing toward the quality of life of the community. The lab includes the participation of numerous experts and organizations involved with the field, who share their knowledge, experiences and points of view. Their aim is to increase awareness of the concept of the base of the pyramid, and disseminate as widely as possible knowledge about successful cases.

The lab will organize three work sessions per year, in which participants will share their experiences and companies can submit their business plans and activities to a “constructive criticism” review by members of the lab. Two of these sessions will be held in Barcelona, with the third being held in a developing nation.

Learning from Social Entrepreneurs
Models of collaboration with social entrepreneurs

The purpose of the conference was to discuss the work on social entrepreneurship of IESE Professor Johanna Mair and Senior Researcher Christian Seelos, who has recently joined the Malik Management Center St. Gallen. According to Mair and Seelos, social entrepreneurship “offers innovative models for the delivery of products and services to meet basic needs that are not served by traditional political and economic institutions.” In their view, social entrepreneurship is the “perfect formula to tackle the difficulties encountered in markets at the base of the pyramid (BOP)."

In their research, Mair and Seelos have found that social ventures contribute more to achieving the UN’s Millennium Development goals (such as environmental preservation or the eradication of poverty) than conventional companies. That is because, they suggest, “working for social sustainability is closely related to economic development.”

What’s more, the notion that economic development, through technology-driven productivity improvement, somehow brings developing countries “up to date” (catch-up hypothesis) is false, they maintain, because it overlooks countries “social capability” (i.e. their ability to respond to economic opportunity). This is demonstrated by the fact that productivity convergence since the World War II (over the period 1950-1980) has affected only a small group of highly industrialized countries.

During the conference, the two researchers presented various business models that companies may use to formulate global strategies that will serve their own sustainable development needs while also serving society’s need for innovation. Although, as they pointed out, “many needs cannot be linked to existing corporate paradigms, value innovation may turn them into a rich source of income.”

Specifically, Mair and Seelos have identified three models of collaboration between social entrepreneurs and companies: integrated (exemplified by the eye surgery project being carried out by Aurolab and Aravind), symbiotic (Telenor and Grameen Bank, an attempt to sell a mobile phone service in the Third World) and complementary (WasteConcern, which has succeeded in reframing the problem of the vast amount of waste generated by cities such as Dhaka and turning it into a business opportunity).

All these social initiatives are built on a paradigm of entrepreneurial innovation in which the following features are key: ability to organize the poor around opportunities; providing services and products that are profitable and beneficial to all parties; using corporate resources and capabilities to forge new value chains; creating the necessary conditions for an industrial revolution; and developing social capabilities to open new markets.

Mair and Seelos’s research reveals that social entrepreneurs contribute strategic resources: “strategic” because they are unprecedented (scarce and obeying a different logic; resisting corruption, for example), non-imitable (difficult and slow to replicate, based on trust), and idiosyncratic (their future value is not obvious, and their price is more like a “real option”).

Summing up, the two researchers reiterated that social entrepreneurs may help companies to formulate global strategies in accordance with their own sustainable development needs and society’s need for innovation.

Fifth Annual CIIL Symposium
Stepping Up the Supply Chain

IESE faculty members Frederic Sabrià, Alejandro Lago and Marc Sachon presented their most recent research at the Fifth Annual Symposium of the International Center of Logistics Research IESE Mecalux, which took place on October 27.

Jordi Català, managing director of Mecalux, and Prof. Sachon, academic director of the center, presided over the opening session of the event, which focused on CIIL activities over the last year.

In the first session, Prof. Sabrià provided recommendations for redesigning supply chains, which included numerous examples reflecting trends in logistics. As a point of departure, his presentation included a brief history of military logistics. Factors such as globalization, client power, information and new technologies, outsourcing and security will have critical impact on the supply chain, he said.
Alejandro Lago followed with a session on best practices in the food sector. Prof. Lago pointed out the need for efficiency in sectors with low margins and offered several models that have been utilized in the automotive sector.

Finally, Prof. Sachon presented the results of his recent study on the implementation of RFID in Spain. Lowered costs and intermediary stocks, greater speed and individualized tracking are a few of the benefits that this technology can bring. RFID promises to benefit the client, the wholesaler, the logistics operator and the manufacturer. However, due to the limited level of implementation and doubts about the establishment of common criteria, a number of important question marks remain, he said.

new program in poland
AMP Warsaw Unveiled at Special Presentation

In October 2006, IESE will launch a new edition of its Advanced Management Program, an executive education program for senior managers, this time in Warsaw. A presentation to mark the creation of this new program took place on November 23 in Warsaw and was attended by a number of Poland’s government leaders.

They included the Minister of Transportation and Construction, Jerzy Polaczek, the Minister of the Office of Prime Ministry, Zbigniew Derczuk, and Cezary Mech and Marian Mooszoro, Vice-Ministers of Finance and both IESE alumni.

The presentation took place at the Royal Lazienki Palace. IESE faculty members Carlos Cavallé and Antonio Argandoña participated, as well as the director of the AMP Warsaw, Radoslaw Koszewski.

Additionally, a message from Poland’s Prime Minister, Kazimierz Marcinkiewicz was read expressing his satisfaction regarding IESE’s initiatives in Poland. The letter stated, “first of all let me express my satisfaction that one of the most reputable business schools - IESE Business School is starting activities in Poland. IESE alumni are respected and valued for their skills in leadership, organization, professional perfection, spirit of entrepreneurship and a global perspective of perceiving business. Especially important is promoting appropriate attitudes, and rising consciousness of Polish managers, professionalism and responsible leadership.”

Cavallé outlined the objectives of the new program in Warsaw, while Prof. Argandoña addressed the subject “How to Make the Most out of the New Europe.” Some 200 members of the Polish business community attended, approximately half of them were presidents and share holders of Polish companies.

IESE and Eastern Europe

IESE’s flagship AMP program is also offered in Barcelona, Munich and Sao Paulo. The new Warsaw program is aimed at business executives and senior managers of companies with headquarters or operations in the Polish region. It seeks to enhance particiants’ professional and personal development, while providing key skills for helping them better lead their organizations.

The first program will run from October 2006 to April 2007. The program opens and closes with week-long modules at IESE’s campus in Barcelona. In between these modules, participants take part in eight two-day modules held in Warsaw.

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