Gaining competitive advantage through customer satisfaction seems to be the mantra of organizations but do satisfied customers increase the economic value of the organization? Is the customer satisfied with the value created for himself/herself?
While organizations are busy in devising strategies for acquiring the new customers, they are not giving much attention to the retention of the customers. Sales strategies are largely driven by the acquisition of new customers. It is universally accepted that acquiring new customers costs (in terms of time, money and resources) more than five times that to retain the existing customers.
A satisfied customer is an asset to an organization. A satisfied customer spreads the positive words - of his experience with the organization. But is that enough? Does the satisfied customer really add economic value? Does satisfaction convert to loyalty, passion and influence?
There are various touch-points for customers to interact with the organization. Through these touch-points customers develop a relationship with the organization. Ironically these touch-points sometimes may become the reasons for customer defections. The reason customer goes to a vendor is that he has a problem and vendor has the solution to that problem. Most businesses focus on the quality, price and service element of the business solution. These are provided by most of the organizations and so the customer has many choices to choose a solution to his problem. These deliveries do not create a competitive edge for the organization because they are provided by all. The business needs to stand out in a market of “me too” marketing promises.
A satisfied customer need not be a repeat customer in the new competitive world. The customer is flooded with the offers by the competitors. So a satisfied customer might not be interested in the same company for too long. But there is one element which makes him/her stick to the organization for long time. It is the attitudinal element of the customer. The customer’s interactions would last for long with an organization if there is an emotional relationship with the organization. By engaging with the customers, an organization can understand the behavior of the customers – to understand the values that drive them to remain interested and engaged. The critical part for the organization is to understand the role of emotions in the customers’ decision making process. People remember the emotional experience better than any other experience with a brand. This translates to the attitudinal behavior towards the company itself. Customers remember either the most pleasant or the most awful experiences with a brand and these drive the retention or defection. Some trend in the retention and defection are given below.
60% of customers stop business with an organization because of perceived indifference on the part of an employee – Target Training International
70% of the reason for leaving the company has nothing to do with the product and 84% of customers leaving the company leave because of poor service – Forum Corp
Customer who experience mild or strong dissatisfaction influence 9 to 16 other people – Tarp worldwide
Up to 80% of defecting customers say “satisfied” or “very satisfied” just before they leave – Business Week, 2006
This explains why attitudinal element is important and organizations should understand the customer attitude and behavior. By understanding the attitudinal element through engagement with the aid of touch-points, an organization can score better than its rivals who do not.
Engagement is the emotional attachment that a customer develops through the interactions with the organization as a satisfied, loyal and influential customer. Engaged customers are passionate about the organization’s products and services and emotionally attached. (Is that the reason people line up through the midnight to buy Apple’s products?) So engagement as a core competence will form a key element for achieving competitive advantage. By deploying resources in the engagement process, an organization can develop this core competence which will not only help the organizations to retain the customers but also increase the economic value.
Engagement results in the co-creation of value for both customers and the organizations. In the traditional approach, firms create the value by producing the products and services and customers are treated as the demands for these products and services. In the new competitive world, as the customers are bombarded with different products and services, organizations alone can not create the value. By engaging the customers with the organizations, organizations need to co-create the value. C K Prahalad introduced 4 building blocks of co-creating the value – DART. Dialogue, Access, Risk Assessment and Transparency together create the value for the organizations and the customers. So the future of competition belongs to co-creation – what customers value and what organizations value.
-Deepak
(Courtesy: Allegiance & C K Prahalad’s Future of Competition)
Tuesday, August 11, 2009
Monday, July 27, 2009
What hovers ahead - Strategic moves by the giants
The dawn of computers. From the early ages of computers, we have traveled a lot. Today, computer is a necessity. Along with computers came a bunch of companies revolutionizing the digital world. Microsoft became synonym with PCs. Where there is domination, there will be someone who will challenge that dominance. Yes. I am talking about the battle between the OS giant Microsoft and the search giant Google. Ever since Google announced the Chrome OS, there have been a number of developments happening. People who hate MS products welcomed the move. The next move was from MS with the news of MS making office suite available for free over web by 2010. As we know Google offers its own office suite for free over web.
While analyzing these moves, naturally the question arises. What could be the strategic thinking behind these moves? Many people argue in many different ways. We need to look behind and beyond the developments that are leading to these strategic moves by these companies.
First let us consider the Chrome OS. Microsoft controls almost 90% of the OS market. Clearly MS dominates the OS market. But hold on. Microsoft may be riding on the success waves but failing to recognize the changes? As more and more applications are accessed through browser, as netbooks are becoming more popular, the need for OS based on the browser is fast becoming a reality. Yes. The new reality would be the desktop loosing ground to the web and the OS loosing the ground to browser. That is where Google is trying to push hard and the result is the Chrome OS. With rich web based apps in Chrome OS, Google is trying to break the MS dominance in the OS market. Another area is the netbook market which is the fastest growing segment of the PC market. Obviously netbooks are not as powerful as their predecessor notebooks and are primarily used for remote access to web based applications. That means Chrome OS is a perfect match for netbooks. Think of Cloud Computing. Vendors might prefer Chrome OS for it is faster than windows. So if we think the future to be a place where web would become a substitute for the desktop and browser would become a substitute for the OS, Google’s strategy seems to be in the right direction.
Now - as any incumbent does – MS came up with the offer of Office suite to be available over web for free by 2010. Is it a smart move? The supporters of the MS argue on the human factor. According to a report, number of paid users of Apps suite is still in its nascent stage. Though there are significant players - such as Google - in the apps suite, MS by its dominant presence is a de facto choice for the customers if no other reasons than habit. Whilst there are cheaper applications available such as Gmail, the habit of using exchange would make the shift difficult. Initially when web based applications’ growths were slow, MS maintained its traditional office suite. Now when the market is changing, MS would not be making much from its Office suite. By launching Office 2010 web suite, MS entered the web apps targeting the mobile, netbook users. So, the timing of the introduction of web based office suite is to spoil or baffle the Google’s growth, there by making the IT departments to cling to their employees’ habits.
Quite interesting moves by the corporations. We need to wait and see what happens next…
-Deepak
(Courtesy bnet)
Saturday, July 11, 2009
Provocative Selling - What is it?
I came across an interesting concept in marketing during my class discussion. The professor introduced “Provocative Selling” as a part of the discussion on global financial meltdown. It was quite interesting. Then I searched for the information on Provocative Selling and got the HBR article by Lay, Hewlin and Moore. The cognition from the discussion turned into reality.
Provocative selling is a marketing technique which can be used when companies face with a stagnant sale.
Source i-ehow.com
During the recession, companies face the tough task of cost containment (I have different opinion as I discussed in my earlier blog on Keynesian Model and Firms). The executives’ spending would be mostly on the existing commitments and only a fraction would be for discretionary spending. As a marketer, one has to fight for this fraction. During hard times, it may become difficult as the proposals go through lengthy reviews and conventional channels are shut. Conventional selling is solution-selling. This means that typically companies consult the customers, offer their solutions explaining their products’ features and functions and persuade the customers to use their products. Provocative selling differs from the conventional selling in that it identifies the competitive challenges faced by the customers and helps them realize the problems as urgent. When customers are down with painful problems, come up with a provocative pitch which customers see as a real threat to their very existence. That means, hit the iron when it is hard.
With Provocative Selling, you proactively identify a critical and big problem that the customer is facing. Then come up with a sale pitch (in this case a provocative point) on the problem. Finally you have to get hold off an executive who has the authority to make purchase decisions.
But it seems Provocative selling is not that easy as it is thought of. There are inherent challenges to Provocative Selling.
It is not applicable to all situations and to all customers.
Since it is a proactive approach rather than a reactive approach, identifying the customers’ problems requires an insight into the customers’ organizations which may not be readily available.
Reaching out to the Right people in the customers’ organization could be a challenge especially during recession i.e. provocative selling requires the contacts of the senior executives and requires the dialogue with them.
Provocative Selling attracts more resources.
Whilst there are challenges, there are advantages too. I see it as a win-win situation for both the customers and the organization. Conventional selling responds to the problems as defined by the customers. The provocative selling proactively identifies the strategic problems addressing the unacknowledged pain. This gives a competitive advantage to the customers as well as to the organization. A successful provocative selling would result in enhanced customer-organization relationship (indirectly helping for repeated purchases). It also helps the organization keep going through the recession time.
In essence, Provocative selling seems to be a promising tool in a marketer’s kit. But the organizations need to be careful in implementing this strategy and should go only with enough research, preparations and resources.
-Deepak
(Courtesy HBR)
Provocative selling is a marketing technique which can be used when companies face with a stagnant sale.
Source i-ehow.com
During the recession, companies face the tough task of cost containment (I have different opinion as I discussed in my earlier blog on Keynesian Model and Firms). The executives’ spending would be mostly on the existing commitments and only a fraction would be for discretionary spending. As a marketer, one has to fight for this fraction. During hard times, it may become difficult as the proposals go through lengthy reviews and conventional channels are shut. Conventional selling is solution-selling. This means that typically companies consult the customers, offer their solutions explaining their products’ features and functions and persuade the customers to use their products. Provocative selling differs from the conventional selling in that it identifies the competitive challenges faced by the customers and helps them realize the problems as urgent. When customers are down with painful problems, come up with a provocative pitch which customers see as a real threat to their very existence. That means, hit the iron when it is hard.
With Provocative Selling, you proactively identify a critical and big problem that the customer is facing. Then come up with a sale pitch (in this case a provocative point) on the problem. Finally you have to get hold off an executive who has the authority to make purchase decisions.
But it seems Provocative selling is not that easy as it is thought of. There are inherent challenges to Provocative Selling.
It is not applicable to all situations and to all customers.
Since it is a proactive approach rather than a reactive approach, identifying the customers’ problems requires an insight into the customers’ organizations which may not be readily available.
Reaching out to the Right people in the customers’ organization could be a challenge especially during recession i.e. provocative selling requires the contacts of the senior executives and requires the dialogue with them.
Provocative Selling attracts more resources.
Whilst there are challenges, there are advantages too. I see it as a win-win situation for both the customers and the organization. Conventional selling responds to the problems as defined by the customers. The provocative selling proactively identifies the strategic problems addressing the unacknowledged pain. This gives a competitive advantage to the customers as well as to the organization. A successful provocative selling would result in enhanced customer-organization relationship (indirectly helping for repeated purchases). It also helps the organization keep going through the recession time.
In essence, Provocative selling seems to be a promising tool in a marketer’s kit. But the organizations need to be careful in implementing this strategy and should go only with enough research, preparations and resources.
-Deepak
(Courtesy HBR)
Saturday, July 4, 2009
Virtualization – what it means to business and business value??
In the previous blog I talked about the “Cloud Computing” and the likely scenario in 2020. Another interesting topic which is making a buzz in the networking world, especially in the data center world is “virtualization”.
Virtualization as the name indicates pertains to the technologies that provide an abstraction layer between the hardware and the software. It provides the advantage of running multiple operating systems in a single server or running a single operating system in multiple servers. Virtualization finds its roots from partitioning. Virtualization did not take off initially until VMware pioneered the virtualization technologies and planted the seeds for virtualization boom.
Let us see the business case for virtualization in the coming five to ten years. i.e. a business case scenario for 2015 or 2020. The key drivers for changes in the data center industry - virtualization in particular - could be the following.
Increasing capital expenditure on IT
Increasing awareness of environment issues and IT
Increasing demand in virtualized data center
Increasing complexity of the networks and their management
Realization of virtualization benefits
Increasing use of internet, web2.0 and applications
The framework:
Today’s data center, networks are plagued with complex architectures, designs, a number of physical devices, cables etc etc. Increasing use of these physical devices has multiple effects. The physical space available is limited. Increasing use of the servers, routers, PCs etc is increasing the energy utilization. According to Harvard scientist’s (Dr.Alex) research, a single search in Google results in 5-10g of CO2 emission and just browsing a site results in 20mg of CO2 for every second a person views it. This is in part because Google employs huge servers to generate results as fast as possible. As the world is becoming aware of the greenhouse gas issues and global warming and its effects on mother earth, various people, governments, organizations are taking steps to reduce the CO2 emission. Kyoto protocol is a step towards reducing the CO2 emission. This set apart, the growing need for bandwidth is making the ISPs to sweat out. As the internet usage is increasing - mainly bandwidth intensive applications such as video (Youtube etc) – the ISPs, data centers are craving for bandwidth efficient devices. Upgrading the ISPs core networks, data centers requires a huge capital investment. But larger data center means greater risk in managing the complex networks resulting in an increase in the operation and management costs of the data center.
But there are developments to counter these drivers of change. Virtualization has come to play a big role in reducing the data center cost. For example, Networkworld report says, by virtualizing the data centers, Cisco reduced the cable plant by 4800 cables, giving 50% more physical space for servers and increased the virtual machine capacity by four times. An IDC analysis says by moving to virtual infrastructure, organizations can reduce the IT costs. The statistics of this analysis gives a 35% of server costs per user savings for a simple virtualization implementation, a 52% of server costs per user savings per year for an advanced virtualization implementation.
So there are a host of advantages that virtualization offers.
But…the challenges…..
As in any technology, there are some limitations and disadvantages in virtualization. There are growing concerns about the security in server virtualization implementation. Similarly CIOs are wary in implementing virtualization for regulatory projects such as credit cards database management. Then there are issues of power and cooling because, by bringing virtualization, the CPU utilization has shot up resulting in more heat generation from these servers. Apart from these, there are issues related to technology itself such as increased usage of memory, CPU cycles etc.
How does the future look?
Keeping in mind about the benefits and the challenges of virtualization, lot of developments is going on in virtualization market. VMware, the leader in virtualization market is improving on some of the challenges that virtualization faces today. Even the chip vendors such as Intel, AMD are working to bring in new chip designs to cater to needs of virtualization. Other vendors such as Dell, HP, Citrix, IBM are also in the virtualization market. As cost saving is the biggest driver, we are seeing more and more organizations embracing the virtualization. The future looks bright for the virtualization technology and for the companies involved in virtualization. By 2015-20 as the technology matures, we might see huge data centers incorporating virtualization and also offering Cloud Computing technologies to the organizations. More and more organizations might move towards cloud and virtualization as they produce more business value out of the investment (ROI). Again, we might see some consolidations in the industry and some new entrants. The incumbents with their market leaderships might pose big barriers to the new entrants. But as usual differentiation would be the strategy for the new entrants to fight against the behemoths in the industry. We might see a good competition (might turn ugly also) by 2015-20 hoping that the end user would benefit from this.
I hope this discussion doesn’t end here. There are huge opportunities as well as challenges for virtualization which are not listed here. Nevertheless this information should provide some useful insights into the future of virtualization market. I think the question “Is Virtualization a good bet for CIOs?” is yet to be solved.
-Deepak
(Courtesy, NetworkWorld.com, CIO.com, IDC)
Virtualization as the name indicates pertains to the technologies that provide an abstraction layer between the hardware and the software. It provides the advantage of running multiple operating systems in a single server or running a single operating system in multiple servers. Virtualization finds its roots from partitioning. Virtualization did not take off initially until VMware pioneered the virtualization technologies and planted the seeds for virtualization boom.
Let us see the business case for virtualization in the coming five to ten years. i.e. a business case scenario for 2015 or 2020. The key drivers for changes in the data center industry - virtualization in particular - could be the following.
Increasing capital expenditure on IT
Increasing awareness of environment issues and IT
Increasing demand in virtualized data center
Increasing complexity of the networks and their management
Realization of virtualization benefits
Increasing use of internet, web2.0 and applications
The framework:
Today’s data center, networks are plagued with complex architectures, designs, a number of physical devices, cables etc etc. Increasing use of these physical devices has multiple effects. The physical space available is limited. Increasing use of the servers, routers, PCs etc is increasing the energy utilization. According to Harvard scientist’s (Dr.Alex) research, a single search in Google results in 5-10g of CO2 emission and just browsing a site results in 20mg of CO2 for every second a person views it. This is in part because Google employs huge servers to generate results as fast as possible. As the world is becoming aware of the greenhouse gas issues and global warming and its effects on mother earth, various people, governments, organizations are taking steps to reduce the CO2 emission. Kyoto protocol is a step towards reducing the CO2 emission. This set apart, the growing need for bandwidth is making the ISPs to sweat out. As the internet usage is increasing - mainly bandwidth intensive applications such as video (Youtube etc) – the ISPs, data centers are craving for bandwidth efficient devices. Upgrading the ISPs core networks, data centers requires a huge capital investment. But larger data center means greater risk in managing the complex networks resulting in an increase in the operation and management costs of the data center.
But there are developments to counter these drivers of change. Virtualization has come to play a big role in reducing the data center cost. For example, Networkworld report says, by virtualizing the data centers, Cisco reduced the cable plant by 4800 cables, giving 50% more physical space for servers and increased the virtual machine capacity by four times. An IDC analysis says by moving to virtual infrastructure, organizations can reduce the IT costs. The statistics of this analysis gives a 35% of server costs per user savings for a simple virtualization implementation, a 52% of server costs per user savings per year for an advanced virtualization implementation.
So there are a host of advantages that virtualization offers.
But…the challenges…..
As in any technology, there are some limitations and disadvantages in virtualization. There are growing concerns about the security in server virtualization implementation. Similarly CIOs are wary in implementing virtualization for regulatory projects such as credit cards database management. Then there are issues of power and cooling because, by bringing virtualization, the CPU utilization has shot up resulting in more heat generation from these servers. Apart from these, there are issues related to technology itself such as increased usage of memory, CPU cycles etc.
How does the future look?
Keeping in mind about the benefits and the challenges of virtualization, lot of developments is going on in virtualization market. VMware, the leader in virtualization market is improving on some of the challenges that virtualization faces today. Even the chip vendors such as Intel, AMD are working to bring in new chip designs to cater to needs of virtualization. Other vendors such as Dell, HP, Citrix, IBM are also in the virtualization market. As cost saving is the biggest driver, we are seeing more and more organizations embracing the virtualization. The future looks bright for the virtualization technology and for the companies involved in virtualization. By 2015-20 as the technology matures, we might see huge data centers incorporating virtualization and also offering Cloud Computing technologies to the organizations. More and more organizations might move towards cloud and virtualization as they produce more business value out of the investment (ROI). Again, we might see some consolidations in the industry and some new entrants. The incumbents with their market leaderships might pose big barriers to the new entrants. But as usual differentiation would be the strategy for the new entrants to fight against the behemoths in the industry. We might see a good competition (might turn ugly also) by 2015-20 hoping that the end user would benefit from this.
I hope this discussion doesn’t end here. There are huge opportunities as well as challenges for virtualization which are not listed here. Nevertheless this information should provide some useful insights into the future of virtualization market. I think the question “Is Virtualization a good bet for CIOs?” is yet to be solved.
-Deepak
(Courtesy, NetworkWorld.com, CIO.com, IDC)
Friday, June 19, 2009
Cloud Computing - A Scenario for 2020
The current buzz word in the networking community is Cloud Computing. Everybody seems to be talking about Cloud, Cloud, and Cloud. Cloud technology is not a new technology. Businesses can use applications without installing them in their environment but can access their files, applications etc from any computer with internet connection. Basically Cloud requires a fast internet connection for providing seamless connectivity to the applications and services. As cloud computing provides a huge cost benefit to the organizations, the need for bandwidth would increase. As a result service providers would have to upgrade their infrastructure to cater to the emerging needs of the industry. What is the result? It could be a good time for infrastructure vendors such as HP, Cisco, Juniper, IBM, Google(?) etc.
We can think of certain drivers for change here. The key drivers in this change process are the cost, the infrastructure, increasing use of internet, increasing number of enterprise customers. These are uncertain but have potential impact on the industry. These are the results of advances in the technology and there is wider public acceptance for these technologies.
What is the likely scenario in 2020?
The key drivers mentioned above would change the industry structure. The cloud computing has already given birth to SaaS (Software as a Service), PaaS (Platform as a Service), IaaS (Infrastructure as a Service). The impact of these key drivers of change is going to be felt in the current industry leaders such as Oracle, SAP etc that are providing the softwares. With the implementation of SaaS, PaaS, IaaS these companies could get huge revenue hit. We might also see a few consolidations in the industry whilst some perish in the process. We might also see ugly wars between the companies to attract the customers (Microsoft Vs Google??). On the positive note, you might see a number of new entrants into the industry. There is going to be a paradigm shift in the industry in the way it is structured now.
But…..Hold on.
There are some inherent problems to cloud computing implementation that undermine its importance. Since internet is the most widely used and cost effective solution for the application of cloud computing, Quality of Service is of utmost concern. Network congestion, jitters, undersea cable cuts and security of data and applications might greatly affect the performance of the cloud and the implementation of the cloud. The inherent inefficiencies in the network protocols and web services would further affect the cloud. Nevertheless as the necessity is the mother of invention, by 2020, you might see a lot of innovations, improvements in these fields (Juniper has already brought 100Gig Ethernet Interface for the router) and Cloud could become one of the successful technologies.
Do you think Cloud Computing is the future?
-Deepak
Wednesday, June 17, 2009
Keynesian Model and Firms
There were lots of discussions on the recession and its effects. There were lots of discussions on how this recession ends (or rather has to be ended?). Governments all over the world were pumping money to the frozen market in a hope to get it revived. Banks were not lending after the sub-prime experience (we have a saying in our native language which literally translates to " the cat learnt its lessons of not playing with the fire after burning its ass".. funny). Somewhere from the middle of the crisis, some economists were discussing about possible application of Keynesian model of economics to the current recession. After all, I was curious about Keynesian model of economics? Searching (rather "googling") through internet, I learnt about Keynesian model. In simple layman's language it is defined as follows. When the economy is in recession, jobs are lost and unemployment jumps. This will have knock effect which creates a vicious circle resulting in slowing down of economic activities. In such a scenario, Keynes advocates that it is possible to revive the economy with the government's intervention because only government has the resources to keep the economy going by implementing new projects such as construction of roads, rail networks etc which provide jobs to thousands. This will create positive knock on effects resulting in more jobs, more spending and ultimately reviving the economy.
This seems to be very simple. As I was thinking about this, as usual, effect of MBA appeared in my mind. Why not companies with enough cash balances go for the application of Keynesian model? I argue that, by doing so, companies could gain competitive advantage. Here are the reasons for my thinking. In the slowing economy, the spending by the organizations diminishes. So too for the demand for products and services. As a result organizations slow down on R&D activities which results in the loss of human resource. Organizations also know that it takes much more effort, time and money to hire them again when the economy recovers. My thinking is that instead of companies slowing their investments and firing the employees, they should start looking into the future opportunities coming on the way when the economy recovers. If the company invests its money in bettering the products and services during the recession would gain the competitive advantage of beating the competitors when the economy recovers. THey even could get best talents in the market for cheaper rates. Because the competitors would have spent less on their R&D and would have fired their employees to shield themselves from the recession.
It seems to be a good strategy for the firms with huge cash balances because these companies can utilize their excess cash to gain the competitive advantage.
So, what do you think? Do you think there is some substance in my arguments?
Are MBAs responsible for financial crisis?
Slowly the crisis started to appear in the MBA life. I was just wondering whether crisis is taking a revenge on MBAs. The number of failures in the financial sector is increasing. It has already taken a number of institutions under its blanket. The knock on effect is felt in other industries too. Ironically by this time, I had started reading the book by Mintzberg titled "Managers, not MBAs". Slowly the belief started to shift. The question "who is behind this crisis"? was pricking me. Sooner, I began to search for the answers. My quest for finding the answer landed me in "the list of failed banks" . 48 banks since 2nd Feb 2007 till 21st March 2009 in US, 69 since 2000 and 17 since January 2009. I was interested to know who their CEOs and their educational qualifications. I started researching on this hardly available data. First major bank failure in 2008 was Lehman Brothers, the failure which shocked the already battered economy across the world. My interest was on the CEO of Lehman's at the time of failure. Incidentally the CEO, Richard Fuld was an MBA from NY university. Merill Lynch was acquired by BoA under distressed conditions. Stanley O'Neal, an MBA from Harvard Business School was running Merril at that time. John Thain, another former CEO of Merril Lynch was ousted by BoA after he was found to have been involved in the losses of the brokerage firm which BoA bought. Troubled Citibank is currently headed by Vikram Pandit, an MBA from Harvard Business School. On November 23, 2008, in addition to initial aid of $25 billion, a further $25 billion was invested by US government in the Citi bank together with guarantees for risky assets amounting to $306 billion. Kennedy Thomson of Wachovia was forced into retirement after mounting losses and subsequent sale to Wells Fargo. He was an MBA from Wake Forest University.
There is a need to relook into the education system as a whole. Does business school teach the required skills to handle the extra ordinary situations? Does business schools teach to be just over ambitious? Mintzberg in his "Managers Not MBAs" writes, people will be arrogant when they have confidence but lack competence. The way these mutli national big banks went after the subprime mortgages suggest their leader's arrogance in reading between the lines. Recently Warren Buffett lambasted the business schools for failing to produce the responsible MBAs. Commenting on Failed CEOs, Mintzberg says "Inexperienced students who seek "practical" applications in the class room seem to become disconnected managers who seek easy answers on the job". A food for thought....
Question: Do you think a drastic change is required in the management education system? If so, what are your suggestions?
There is a need to relook into the education system as a whole. Does business school teach the required skills to handle the extra ordinary situations? Does business schools teach to be just over ambitious? Mintzberg in his "Managers Not MBAs" writes, people will be arrogant when they have confidence but lack competence. The way these mutli national big banks went after the subprime mortgages suggest their leader's arrogance in reading between the lines. Recently Warren Buffett lambasted the business schools for failing to produce the responsible MBAs. Commenting on Failed CEOs, Mintzberg says "Inexperienced students who seek "practical" applications in the class room seem to become disconnected managers who seek easy answers on the job". A food for thought....
Question: Do you think a drastic change is required in the management education system? If so, what are your suggestions?
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