Innholdsfortegnelse for Spring 2013 i Rotman Management

THERE WAS A TIME, not long ago, when people with average skills, doing an average job, could eke out an average lifestyle and live happily ever after. But as Thomas Friedman recently declared in The New York Times, “Average is officially over.” What was seen as average performance in the past will no longer earn people an average wage or a middle class standard of living. The result? Every one of us needs to ask ourselves if what we are doing is — to some degree — unique and irreplaceable. While Friedman was writing about individuals, his message holds equally true for organizations. The people and organizations that are most successful these days are those who offer something extra — a unique value contribution that makes them stand out in…

OVER THE NEXT TWO DECADES, one of the fiercest battles in business will be for the billions of people joining the middle class in emerging markets — a group that will make up 30 per cent of the global population by 2020. Yet even if they’re already active in emerging markets, many multinational companies are not prepared to tap into this new stream of revenue growth. Simply put, their business models were not designed to reach the new middle. Many firms have imported their existing high-end products and services through standard distribution channels to target the most affluent tier of customers in emerging-market cities such as Delhi, Shanghai, Rio de Janeiro and Moscow. While this strategy has proven successful in the past, the top-tier segment is becoming saturated, and developed-world…

AS THE WORLD MOURNED the passing of Steve Jobs in October 2011, commentators were discussing the principles that made Apple a success. During an interview with the ABC News program 20/20, correspondent Deborah Roberts asked me about the role vision played in Jobs’s success. “Vision is everything,” I said. “A bold dream attracts evangelists, and no lasting brand can be built without a team of dedicated people who share the vision. Passion fuels the rocket; vision directs the rocket to its ultimate destination.” You simply cannot build an organization that delivers an extraordinary customer experience unless you have a clear vision of the type of experience you plan to offer. How did Steve Jobs start a company in the garage of his parents’ house and grow it into one of…

IF YOU HEAD NORTH FROM LOS ANGELES ON INTERSTATE 5, hang a right on the Antelope Valley Freeway toward Palmdale and the Mojave Desert, and cut east past the Antelope Valley Country Club, you’ll run into the Sierra Highway, off which you can see Lockheed Martin’s Skunk Works building, not far from Air Force Plant 42 and Edwards Air Force Base. You’ll know you’re in the right place because you’ll see a white building with a cartoon skunk on it — the Skunk Works logo. As you drive around, you’ll see a good bit of barbed wire, a high concrete wall, and plenty of ‘No Access’ signs. You’ll see an F-104 Starfighter on display near the main entrance off Lockheed Way and pass Kelly’s Way, named for Lockheed’s legendary chief…

Negative thoughts pervade the ‘self talk’ of many people. Why is this, and what are the implications? We are actually shaped, by nature’s design, to have our attention drawn to negative things that might be signs of threat or danger — and we should be thankful for that, because that’s how our ancestors stayed alive. But as a result, we’re hard-wired with a negativity bias, and in a way, our culture exploits that. If someone wants to get your attention, all they have to do is show you something negative. Our minds are so attuned to looking for the negative that we often ‘leave’ our present mental moment to find it: we worry about things that happened in the past, or become anxious about something negative that might happen in…

THE YEAR WAS 1995. A young, smart actuary and self-described ‘hardened capitalist’ named Taddy Blecher had accepted an offer from U.S. consultancy Monitor, packed his bags, and was about to board a flight from Johannesburg to Boston when he changed his mind — and as it turned out, the course of his life. Blecher’s native South Africa was in President Nelson Mandela’s first term, its fledgling democracy freed at last from the scourge of apartheid. Looking around him, Blecher saw “aching poverty, but also the greatest and most valuable resource: human potential.” Today, Monitor is bankrupt, and the once-hardened capitalist is a dedicated social entrepreneur, founder and executive leader of the Community and Individual Development Association (CIDA), the parent organization for a series of ventures that provide disadvantaged South African…

How did the Creative Destruction Lab come about? The Lab was a confluence of three things. One was my exposure to technology entrepreneurship at MIT and UBC, and my recognition that there was a void to fill at Rotman. The second was a perpetual ‘drip-drip-dripping’ of questions and requests by students who were working on their own projects and who wanted input and advice. Third, I recently co-founded a national entrepreneurship program for undergraduates called The Next 36 and learned a fair amount during that process. These three things led to a realization that we could do something quite significant here. What does the Lab provide to entrepreneurs? We had 76 ventures apply, and 18 have been admitted into the Lab, where they can access four things. One is content.…

SEVEN YEARS AGO, I changed the focus of my strategy teaching at Harvard Business School. After instructing MBAs for most of the previous quarter-century, I began teaching the accomplished executives and entrepreneurs who participate in our programs for business owners and leaders. Shifting my focus to executive education changed the way I teach and write about strategy. I’ve been struck by how often executives, even experienced ones, get tripped up: they become so interested in the potential of new ventures, for example, that they underestimate harsh competitive realities or overlook how interrelated strategy and execution are. I’ve also learned, in conversations between class sessions (as well as in my work as a board director and corporate adviser) about the limits of analysis, the importance of being ready to reinvent a…

THE ASSOCIATE DEAN of executive degree programs at the Rotman School has been honoured for her contributions to the Executive MBA industry. Prof. Beatrix Dart, who is also the academic director for the One-Year Executive MBA and the Omnium Global Executive MBA programs at the Rotman School, received the 2012 Bud Fackler Service Award from the Executive MBA Council. The prestigious award recognizes contributions to executive MBA programs worldwide, including efforts to help other programs share best practices. The Council named the award after Bud Fackler, the late director of the Executive MBA Program at the University of Chicago and one of the Council’s founders. Dart served on the Executive MBA Council board for four years and chaired its 2007 conference in Toronto. Committed to advancing women in management, she…

May 8, 5:00-6:00pm, Toronto Mobile Technology Experts Speaker Series @ Rotman Speaker: Carl Rodrigues, Founder, President & CEO, SOTI Inc. Topic: Digital Citizenship in the Age of Mobility May 9, 5:00-6:00pm, Toronto Mergers & Acquisitions Experts Speaker Series @ Rotman Speakers: Alexandra Reed Lajoux, Chief Knowledge Officer, National Association of Corporate Directors Ken Smith (Rotman MBA 86), Managing Partner, Dundee Associates Topic: The Art of M&A Strategy: A Guide To Building Your Company’s Future Through Mergers, Acquisitions, and Divestitures (McGraw-Hill, 2012) May 10, 8:00am-12:00pm, Toronto Initiative for Women in Business @ Rotman Leadership Experts Speaker Series Speaker: Mahzarin Banaji, Professor of Social Ethics, Department of Psychology, Harvard University Topic: Blindspot: Hidden Biases of Good People (Delacorte Press, 2013) May 24, 8:30am-4:15pm, Toronto 15th annual Rotman Life-Long Learning Conference Topic: What’s…

IN MODERN ORGANIZATIONS, the mindful management of talent — highly-creative, uniquely-skilled, value-producing individuals — is an absolute necessity. High-performing players, whether they be star CEOs, world-class salespeople, great product developers or professional services rainmakers, exist at the tail end of the distribution in terms of ability and impact. They have high aptitude, sought-after skills and the ability to ply their trade almost anywhere around the globe. How can a leader take a brilliant, talented individual and bring out his or her very best, sustained performance? Great sports coaches — like Harry Hopman in tennis, Bill Walsh in football or Mike Krzyzewski in college basketball — are prime exemplars. They are able to draw outstanding performance from individuals and to create a legacy of sustained excellence. But how do the lessons…

IN JANUARY OF 2009, TED Airlines flew its final route and ceased operations, after only five years in service. Parent company United Airlines acknowledged that its attempt to create a low-cost carrier had failed, and began repainting the planes and absorbing them back into its general fleet. A few years earlier, Delta’s attempt at a low-cost airline, Song, fared even worse, folding after just three years in operation. Both ventures had set out to take on America’s most consistently profitable airline, Southwest, along with its young protege jetBlue, and beat them at their own game. At face value, TED, Song, Southwest and jetBlue had several things in common, including budget pricing, ‘no frills’ service and recognizably-quirky brand identities. Nevertheless, TED and Song were unable to replicate Southwest’s success. In Europe,…

LINING UP TO WAIT FOR A SERVICE is a ubiquitous consumer experience. Every day we queue up to use an ATM, to check into a flight, to purchase groceries, or to speak to a telephone ticketing agent. There are queues for patients to receive medical operations, and there are virtual queues when we call a customer service number and have to wait for the next available agent. Given their ubiquity, a rich literature in the field of queuing theory has studied ‘queuing efficiency’. To date, much of the research has had the explicit goal of maximizing system efficiency on observable variables like ‘throughput’ (i.e. number of people server per unit of time) and average wait times. However, queuing also has a number of psychological and choice implications. Researchers have therefore…

‘BIG DATA’ IS HAILED as the next mega-problem for business, and rightly so: business is the ‘busy-ness’ of making decisions — lots of them — and better decisions depend on having more, more reliable and more timely information upon which to make them. Having the data we need for the decisions we need to make, in the form we can make best use of, is a mega problem in an age when data storage, gathering and processing capacity doubles every 18 months to two years. The ‘big data’ mega-problem is not merely a technical problem: it is not just a problem of storage, or communication, or of microprocessor design. To convince yourself of this, just do the thought experiment of multiplying the memory storage on all of your computing machinery…

The effectiveness of any economy depends, in large part, on how well its financial sector functions. Which elements of the Canadian system have enabled it to rise to the top? There are many factors at play, but I’d like to start off by noting that the fiscal situation in Canada was very good prior to the financial crisis, which was a unique feature, globally. Aside from that, one can look at the activities of the OSFI and the activities of the financial institutions themselves. From OSFI’s perspective, our review would show that some of the things that really mattered included the capital requirements and leverage ratios that we imposed. There was also an international accord — Basel II — that we implemented literally as well as in spirit. These things…

INNOVATION AIN’T WHAT IT USED TO BE. Once the responsibility of a single department with a clear mission — new product development — today it is everywhere and involves not just products and services, but processes, technologies, business models, pricing plans and performance management practices — the entire value chain. As a result, innovation is now the responsibility of the entire organization. As the VP of innovation for a leading food group recently told us: “A key learning was that most of our innovation efforts (above 80 per cent) had been focused on products, but less than 10 per cent of the benefits were coming from this area. The challenge was no longer to continually launch new products, but to build a culture of innovation that brought ideas that worked…

What is ‘willful blindness’, and why did you decide to write a book about it? ‘Willful blindness’ is a legal term that refers to situations where you could or should have known about something. Even if you claim you didn’t know about it, under the law you are treated as though you did. I was writing two plays for the BBC about Enron. In the trial of former Enron executives Jeff Skilling and Ken Lay, the judge used the term while giving instructions to the jury: he told them that even if the defendants claimed they didn’t know what was going on, it was their job to know what was going on. This was at the same time the banks were starting to implode. Again, executives claimed they couldn’t see…

FACED WITH INEVITABLE CHANGE, effective managers plan carefully as they lead their organizations through uncharted territory, like a conductor directing an orchestra in perfect harmony. But change does not always lend itself to the careful precision of well-rehearsed orchestration. Indeed, the organizations most responsive to change are often the ones that replace the orchestral model with a new one — the jazz combo. For when the bounds and scope of change are uncertain, an organization often needs not pre-determined plans but flexible improvisation. The maestro’s careful direction should give way to the ad hoc creativity of a group’s accomplished practitioners, who improvise within a set of rhythms and chord changes, but without a precise and pre-defined composition. In fact, contrary to conventional wisdom, the most successful business transformations aren’t always…

A RESEARCHER AND PROFESSOR of business history and corporate finance has been appointed as the first holder of the L.R. Wilson/R.J. Currie Chair in Canadian Business History at the Rotman School of Management. Christopher Kobrak will be a visiting professor and hold the chair at the Rotman School. His appointment begins with the 2012/13 academic year for a three-year term. During that time, he will continue to be a professor of Finance at ESCP Europe in Paris, where he has taught since 1991. Subsequently, he will join the Rotman School full-time. Prof. Kobrak’s research has concentrated on corporate and financial history, which includes how the evolution of capital markets and political risk has affected business strategies. A CPA with extensive business experience, he holds a PhD (Business History) and an…

Before you opened Chez Panisse [in 1971], people had a choice: they could eat in stuffy ‘food temples’ where the atmosphere was hush-hush and the food was really good, or they could relax and eat ‘cheap and cheerful’. How did you go about combining the best of both worlds? When I was 19 I did a semester abroad, and I spent three weeks in France that completely awakened my senses. At the time, TV dinners were all the rage in the U.S.; dining was all about convenience, efficiency and sterilization. Suddenly, I was surrounded by a way of life that was all about touch and taste and aromas and sounds; I was beside myself. I went to lots of those stuffy French restaurants you describe, because I had a real…

Research shows that the brain requires three things to function optimally. What are they? The first is moderate stress. People tend to think we need low stress to function at our best, but that isn’t true. Most problems related to poor performance arise when people are already at a moderate level of stress, and they suddenly experience very high stress. The second requirement for optimal brain functioning is positive affect, or emotion, which creates the right neurochemistry for our conscious and non-conscious processes to function at their best. If you experience negative emotions consistently, your cortisol levels will be too high, and you won’t experience the healing effects of positive emotions to recuperate. The third factor is a good night’s sleep, which is critical. For some of us, that means…

SOCIAL MEDIA HAS CREATED RAMPANT CONFUSION on the part of many organizations. Some all-but-beg people to ‘like’ them on Facebook, while others badger people to follow them on Twitter, or offer free trials that they hope will result in long-term patronage. They may even offer rewards that represent neither their brand’s values nor consumers’ interests. Not surprisingly, most people see through such hollow attempts. The fact is, of the hundreds of millions of dollars spent each year on social media marketing strategies, most of it achieves very little in the way of creating a sustained following. Successful social movements, by contrast, have long managed to capture and sustain millions of followers over long periods of time—often for a tiny fraction of what private companies spend on marketing. What lessons can…

OF THE FORCES THAT WILL SHAPE SOCIETY and the global economy over the next decades, none is more certain and predictable than population aging. Whereas today the global population aged 60 or over numbers nearly 750 million (more than 10 per cent of the overall population), by 2050 it is expected to soar to more than two billion — exceeding 20 per cent of the overall population. But despite the hard facts, many business leaders and policymakers don’t have a good grasp of the realities of population aging. In our conversations with leaders in both government and business, we frequently encounter misconceptions about the topic. Some are the product of erroneous conventional wisdom, some are rooted in outdated assumptions and perceptions, and others overlook the extent to which policies and…

Your book begins with a bold statement: “Something is broken in the way businesses obtain the resources they need to grow.” What has gone wrong? Organizations are constantly looking for new technologies, new markets, new business models, new production techniques and new products. Most of them are pretty good at seeing opportunities. They’ll make a choice and then say, ‘OK, let’s make this internally’, or ‘Let’s do a collaboration with X’, or ‘Let’s buy this other firm’ — and then they put a huge amount of effort into trying to do that well. Our premise is that there is an important step that comes before that: before busting your tail to make something work, you need to make sure to pick the right way of gaining access to the new…

AMIDST ALL THE CHAOS in the global economy, very few things are certain, but one of them is that to secure a productive 21st century, we in the West must achieve a deeper understanding of what makes the Chinese tick. While the Chinese are often described as inscrutable — even by some who have spent long stretches of time in China — this viewpoint is misleading. Despite China’s growing significance on the world stage and an explosion of new Chinese material and lifestyle opportunities, local culture remains intact and, to those with cultural curiosity, knowable. Having said that, in order to establish a productive relationship with the Chinese, we must reorient ourselves to engage with a profoundly different worldview. After a four-year stint in Hong Kong, I arrived on the…

Your research is focused on the notion of metaphors in our thinking. What is the relationship between the way we think and the metaphors we use in everyday life? What we are finding is that our minds interact with our bodies in multiple ways, and that mind-body connections are often predicted by the metaphors we use. My background is in Social Psychology, so I’m very interested in how the human mind represents knowledge. For example, how do we understand unobservable, intangible, abstract notions like morality, love or trust? I study how these concepts are represented using bodily states. For instance, we sometimes talk about morality in terms of ‘clean’ vs. ‘dirty’; or we talk about love as a ‘perfect fit’ between two people. We frequently use body-related metaphors to understand…

DEAN ROGER MARTIN will be ending his term as Dean on June 30, 2013, one year earlier than the formal conclusion of his third term. Martin, who joined the Rotman School as Dean in May 1998, will remain at the School’s Martin Prosperity Institute in a leadership position, focusing his work on the future of democratic capitalism. “There are two reasons I am taking this step. First, the School is in fabulous shape,” says Martin, who cites the recent opening of a new nine-story building, the expansion of programs, and the development of a world-class faculty and administrative team among other achievements. “Secondly, I believe the School is well-positioned to make a meaningful global contribution to democratic capitalism, whose future is being questioned. We have significant assets that can be…

The past decade has seen a number of developments that threaten the very fabric of how marketing activities are conducted. On one hand, consumers are increasingly socially networked and value-conscious, with heightened expectations of how companies will react to their demands. Along with the challenges, however, come new opportunities: the growth of Behavioural Economics and the emergence of new data collection techniques, for instance, give marketers unprecedented access to previously hidden aspects of consumer behaviour. Published in January by Rotman-UTP Publishing, Flux: What Marketing Managers Need to Navigate the New Environment, helps managers adapt to this rapidly changing environment. Each chapter is written by a member of the Rotman School’s award-winning Marketing faculty in a specific ’new’ marketing subject area, from managing brands to dealing with new media, and addresses…