International Advisory Board
School’s IAB Welcomes New Members

IESE’s International Advisory Board meets each year on campus to provide the school with valuable input on trends and developments in the business world. This year, the board met in Madrid and also welcomed three new members, representing the services, IT and retail sectors.

Members of IESE’s International Advisory Board (IAB) were welcomed by HRH Prince Felipe of Spain, for the 17th annual reunion held in Madrid in April. During their meeting with Spain’s heir to the throne, which was held at the royal palace of La Zarzuela, IAB members discussed a number of pressing global issues including trade, energy, growth, poverty and new centers of global power.

Since its founding in 1989, the IAB has brought together representatives from the business school and top executives of multinational corporations in Europe, Asia and America. The mission of the board is to advise IESE’s management on all matters related to the economy and business management. In addition to meeting annually, IAB members contribute toward the development of the school in various other ways. These include providing guidance to the school, participating in IESE events and addressing MBA students. The board is presided over by IESE’s Dean Jordi Canals.

Together, the board reflects more than 20 different countries, and sectors as diverse as retail, technology, media and manufacturing.

Following the meeting with the prince, the group headed to IESE’s campus for the central meeting, where it tackled issues related to business education and IESE’s role in an international context.

At the start of the meeting, the following new IAB members were recognized:

Prof. Juan Roure followed with a presentation of IESE's activities and research initiatives over the last academic year. Also during the meeting, María Puig, director of the Alumni Division, provided an overview of the association's educational and outreach activities.

A key topic at the meeting was the evolution of MBA programs worldwide, and the increasing importance of entrepreneurship and innovation within curricula. IESE's MBA program emphasizes these two areas, which help graduates prepare for leadership roles within organizations or as they launch their own enterprises.

The growing importance of China and India on the world economic scene was also discussed. In this regard, IESE is positioned on the leading edge among business schools, with major initiatives being carried out in both countries. In China this year, IESE launched the Global CEO Program for China, in collaboration with Harvard Business School and the China Europe International Business School. The school also offers modules of its Global Executive MBA program at the CEIBS campus. In terms of India, the school offered for the first time this year, the Inside India program at the campus of the India School of Business in Hyderabad. The program featured sessions led by IESE and ISB faculty members, as well as company visits and presentations by prominent business leaders.

Members of the IAB congratulated the school on these projects, and also discussed other regions that are having growing importance within the world economy.

Members of the board encouraged the school to continue working toward offering a comprehensive business management education, with an emphasis on ethics and integrity. In this way, IESE will be able to contribute toward developing future CEOs who are able to make effective and responsible business decisions.
Members also expressed their interest in seeing the school pursue its goal of developing managers in emerging markets. Through alliances with its extensive network of Associate Business Schools in Latin America and other developing areas, IESE has for many years delivered executive education programs and carried out research in emerging markets. In addition, the school has recently entered into an agreement with Strathmore University in Kenya, to support the development of a business school there. The importance of integrating and stressing ethics within programs in these areas was also stressed.

Board members also pointed out the continued need to balance teaching and research. While IESE has always stressed rigorous classroom teaching, research has also come to the fore in recent years through the establishment of various new research centers which focus on a wide range of areas including finance, globalization, logistics, work and family balance and e-business. Moreover, IESE faculty are among the top producers of business cases, writing cases in both English and Spanish, covering diverse topics and geographic areas.

Also noted during the meeting was the importance of cultivating a global mindset among business leaders, who have to consider competencies in human resources, financial resources marketing, sales and risk management. IESE programs, which take a general management perspective and employ the case method, cover a wide range of themes. The goal is to develop leaders who have a comprehensive vision of the company, and are able to take decisions at the highest level.

Sponsoring Companies Meeting
Helping IESE Fly High

IESE’s Sponsoring Companies are a key source of support for the school. This year, representatives from these firms met in Madrid on May 10, and heard about IESE’s latest plans and projects.

On May 10, 100 representatives from IESE’s Sponsoring Companies converged on Madrid for the 19th annual meeting.

Among the newest companies to join this key group are: Abertis, Actúa Human & Capital, Allianz, Barclays, Codorníu, Didata, Ascensores Ersce, Fadesa, Grupo Evemarina, Grupo Manpower, Grupo Villar Mir, “la Caixa,” Morgan Stanley, Peoplematters, Sanofi Aventis and Willis. Upon becoming a sponsoring company, firms receive a special diploma recognizing their status and their contributions toward the advancement of the school.
Driving IESE Toward the Future

IESE’s Dean Jordi Canals, provided participants at the meeting with an overview of developments over the last year, as well as other projects that the school has in the pipeline. A key highlight is the inauguration of the new Barcelona campus facilities, set for this fall.

Next, Prof. Juan José Toribio, director of the school’s Madrid campus, led a session on “Competition and Convergence,” in which he addressed critical issues facing companies today. Finally, Prof. Josep Valor provided remarks on the key role of information and communications technologies over the next few years in business. His session was titled “The Role of Technology on Business Models of the Future: The Example of Telecommunications and the Media.”

IESE’s Sponsoring Companies support the school in a variety of ways, including through the sponsorship of research centers and chairs.

Harvard Hosts HBS-IESE Committee Meeting
Faculty Members Meet in Boston to Discuss Joint Projects, New Developments

The 43rd annual meeting of the Harvard-IESE Committee recently took place at Harvard Business School in Boston. The committee has met every year since its founding in 1963 either in the U.S. or Spain, and provides the opportunity to evaluate IESE’s development and plans for the future. Moreover, the group gathers to discuss topics of mutual interests and to exchange viewpoints regarding business management.

Participating from Harvard this year were professors John J. Gabarro, W. Carl Kester, Srikant M. Datar and Richard Vietor. From IESE, Dean Jordi Canals and Professors José Luis Nueno, Joan Enric Ricart and Eric Weber took part.

This year, the meeting’s agenda highlighted the future of MBA programs, the promotion of new ideas and paradigms in business management and the education of business school teachers and new ways to approach globalization in executive education.

A Longstanding Relationship

IESE’s close relationship with Harvard Business School has led to various initiatives throughout the years. These include the establishment of IESE’s two-year MBA program in 1964, the first of its kind in Europe; faculty exchange between the two schools; and joint executive education offerings, which were first launched in 1994.
Recently, the schools joined forces to offer a program for CEOs of large companies in China, together with the collaboration of CEIBS in Shanghai. The program included modules in Boston, Shanghai and Barcelona. The final module was held at Harvard in June.

The schools also collaborate on the program, “New Game Strategies: Breaking Competitive Stalemates,” which was also offered in June. The three-day program was led by Pankaj Gemawat and Ramon Casadesus-Masanell of HBS, along with Joan Ricart and Bruno Cassiman of IESE.

The program covers three key areas: strategy and business models, new business models and competing with business models.

New Research Chair on Social Responsibility Created
Initiative Will Support Advancement of CSR Field

IESE has announced the creation of a new research chair focused on social responsibility, sponsored by the financial entity, “la Caixa.” The new chair was presented at a special event on May 1 at the school’s Madrid campus. Professor Antonio Argandoña is the holder of the chair, which marks the first time that “la Caixa” has sponsored a university chair.
“Corporate social responsibility is defined in terms of the responsibility of the company, not the needs of those involved,” says Prof. Argandoña, whose articles have been published widely in this area.

The initiative supports IESE’s commitment to develop, promote and disseminate research that is relevant and timely for businesses worldwide. Specifically, the new chair will support research projects, publications, scientific meetings and activities with business leaders. It will also support courses in the MBA and Executive MBA programs that center on social responsibility in the company and corporate governance.

Interview with Jeffrey Pfeffer
The Pfeffer Effect at IESE

Stanford Professor Jeffrey Pfeffer spent three weeks at IESE in May, lending his expertise to various IESE activities - from the Advanced Management Program to the school’s annual ethics conference. The author of a new book, Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, Prof. Pfeffer also pens a widely-read column in Business 2.0.

As the Enron trial draws to a close, do you feel that this episode will have had an impact on corporate practices?
No, I don’t. The first response to the financial scandals has been to put on more formal rules. So we have Sarbanes-Oxley, we have more disclosures. But it’s kind of like income tax laws. If you want to get around the rules and regulations, there’s no way I’m going to be able to put in enough rules and regulations that can ever restrain you. So I think we have not asked the question of “why do people do this?”

People do this because they’re under enormous pressures both positive and negative, in particular, pressures by the business press to do things that are impossible to do. To be able to achieve financial results that are impossible to achieve. In the words of Jim Goodnight, the CEO of SAS Institute, people want you to make your earnings numbers to the penny. The only way you can make earnings expectations consistently is to cheat. So until we change the rules of the game, we can’t expect much change.

How is the media fueling the problem?
People have gotten more interested in CEOs as celebrities. And I think that it’s very unhealthy to build this “rock star” culture around CEOs. It’s helped contribute to the soaring CEO salaries in the United States and it’s helped contribute to, as Rakesh Khurana points out in his book, looking for the “corporate savior.” It’s led to a lot of unrealistic expectations about what one person can do. It’s like someone once said about Jack Welch: Jack was a talented person, but there were, after all, 100,000 people who worked for GE. He didn’t do everything himself!
How does evidence-based management, the topic of your new book, address this issue?
It certainly addresses one of these half-truths we talk about: the idea that leaders are in control of their companies and ought to be. That, of course, is a myth. The effect of leaders is not as big as people think, compared to the effect of economic cycles and fluctuations and what industries are doing and a bunch of other stuff. Nor should it be that leaders have as much control as they seem to want to have.

As a CEO, if I’m going to have that much control, why should I bother hiring talented people? If I’m going to tell them what to do, then I can hire idiots and do it cheaper! Part of the whole premise of the book is that people ought to pay more attention to the facts, to the evidence, and to what we know about human behavior, as opposed to all these myths running around, including that if you hire the right person at the top, all your problems will be solved.

In your most recent column in Business 2.0, you complain that too many young executives today seek to be well-liked by their peers. They avoid arguing and standing out. Why is it a mistake to try to be well-liked?
That has been one of my most downloaded columns ever! If you’re going to rise up the organizational ladder faster than everybody else, then some people will be jealous. If you get obsessed about this, you’re going to have troubles. You don’t want to upset people unnecessarily, but you have to do what one of my most successful and actually nicest CEO friends says, “begin with the end in mind.” That means you need to decide what your priorities are, what you’re trying to achieve and think very hard about what you are willing to achieve. How hard are you willing to work? What are you willing to do in terms of sacrificing your personal life? What are you willing to do in terms of upsetting other people? There is no right answer to this, it depends on your own individual values and objectives.

You talk about the impact of the pursuit of self-interest in a market-mediated world, and that we - as a society - have created a specific language and set of mental models based upon this. Could you give some examples?
I´ll use a quote from CEO George Zimmer, who says that there are two ways to look at the world: You can look at the world as economics does, as the allocation of scarce resources. Or, you can look at the world filled with infinite love and compassion and potential. The language of economics is a language of scarcity, it’s a language of trade-offs. It’s a language of either/or thinking. I can either have car or an ice cream. It’s all about allocation, it’s not about creation. The weakest part of economics is growth economics. It’s theoretically the weakest part, the part we know the least about.

We know the least about how to build new economies, but we know the most about how to allocate resources in existing economies. So that’s just one example, but there are many others. It’s the language of competition. The language of economics does not talk much about teams or teamwork. Occasionally it says something about team production, but the language is about competition. All the dynamics of the language set people and companies competing against each other. So that would be another example of the language, which is by the way, inconsistent. We send mixed messages. How can we talk about teamwork if we then basically spend 80% of our time equipping the students with models of behavior and a language that says teamwork is called collusion and we really value competition? So I think we send very mixed messages about whether we’re serious about this or not.

You’ve had an intense three weeks here at IESE. Can you tell me what you’ve done - or rather what you haven’t?
I´ve taught in a three day short program with Prof. Fabrizio Ferraro called “Getting Things Done.” I’ve taught in the Advanced Management Program. I’ve taught in the Global Executive MBA program. I’ve given a talk to IESE alumni. I’ve taught in the CEO program in Madrid. Yesterday, I talked in the ethics conference.

So, having experienced the full range of programs, what do you see as IESE’s unique characteristics?
It’s values-driven. This is the most values-driven business school. And also I think the other thing that is unique about it is that this is a place - at least it seems to me - that it is taking a much longer perspective on its growth, development and evolution. This is a very unique perspective. It´s investing in the future, in relationships for the future, in building a reputation for the future, as opposed to worrying so much about the short-term. U.S. business schools tend to emulate what they teach, and so they have the same short-term perspective and narrow perspective.
There is also a real sense of community at IESE. There’s a sense that people like each other. That doesn’t mean everybody likes everybody, I understand. But as an institution, it cares about the people who are here. And it’s not such a small school. There are more people working here than Stanford Graduate School of Business, for example. It’s been an intense three weeks.

IESE No. 1 in FT Ranking
IESE Named Among the Top Schools in the World

The growing international presence of IESE Business School (University of Navarra) was underscored by the recent Financial Times executive education ranking, which placed IESE first among open enrollment programs in Europe. Overall, the school placed fourth in the world.

The FT’s annual business school survey takes into consideration factors such as quality of education, faculty and international expansion. This is the fourth year in a row that IESE has occupied the number one slot in Europe in the open enrollment category.

IESE currently offers programs on diverse continents, including Europe (Barcelona, Madrid, Munich and Warsaw); Asia (China, together with CEIBS in Shanghai, and India); the Americas (Brazil and New York) and Africa (Egypt and Kenya). Additionally, IESE imparts numerous in-company programs for clients such as Henkel, Abbott Laboratories, Nissan and Visteon, among others.

The top five business schools in the world for executive education, according to the survey are (1) Duke (2) IMD (3) Stanford (4) IESE and (5) Cranfield.

The ranking is carried out through questionnaires, interviews and statistical data gathered by the Financial Times. This information was analyzed, along with other activities of each business school.

Companies with a Heart
IESE Sponsors Awards for Firms

Spain's Prime Minister, José Luis Rodríguez Zapatero, presided over the 5th Annual Companies with a Heart awards, co-sponsored by IESE Business School. Other sponsors are the publication Actualidad Economica and Adecco. “Social action,” noted Zapatero at the event, “is a strategic element, not philanthropic, for any company.”

The supermarket chain Alcampo was named “Best Company with a Heart,” for their outstanding efforts to reach out to employees and customers. Ericsson was given the “Best Company Project” at the ceremony, which took place in Madrid.

The criteria for selecting the winning companies were based on the impact of internal and external social initiatives. These included the involvement of employees in initiatives, the promotion of social consciousness, sustainability of projects through agreements with NGOs and other foundations, and the innovation and creativity of ideas.

IESE’s director in Madrid, Juan José Toribio, explained at the awards that in 1999, when the awards were launched, corporate social responsibility “was a practice that was not widely spread among businesses.” IESE Prof. José Ramón Pin served on the panel of judges.