The innovation DNA at business school

Following the release of QS' Innovation ratings of the Global 200 Top Business Schools Report 2010, TopMBA.com asks Howard Anderson, senior lecturer at MIT Sloan School of Management's Entrepreneurship Center to explain how innovation can be taught to MBA students who choose to specialize in the subject...

The business world is comprised of two kinds of companies – Attackers and Defenders. And they both need you – if you have the right DNA.

Think about it. No company has ever achieved ‘sustainable’ distinctive competence, the best any firm can do is to achieve some ‘temporary’ advantage. The only real asset of a company is its ability to innovate and build another advantage before its competitors react.

Which is great. It plays to your strength if you have the Innovation DNA. Do you? How do you know?

Think about this: all business strategy is based on the idea that you want to upset the status quo. If you are a Defender, you want to increase market share, improve the position of your brand, be the product and thought leader.

If you are an Attacker, you have no customers, no reputation, no installed base and perhaps a weak balance sheet. But maybe you can develop a global strategy early; perhaps you can figure a way to imbue your products with a self servicing application that makes it easier for the ultimate customer to use. 

Business school criteria

Want a hint? Don’t go to any MBA school simply because of the professors. I have an undergraduate business degree from one highly regarded school, another degree from a second and have taught in some of the best in India, Russia, Israel, and the United States. Pick a school where you are not the smartest boy or girl in your class. Pick a school where there is hybrid vigor between technology and management, between local and international MBA students, between left brains and right brains. Pick a school where you will be sitting next to people who do not have the same background, or come from the same disciplines as you. You will learn from your classmates.

When I walk out of my classroom at MIT Sloan, the average IQ goes up. Think about it.

Now, here’s your question: Can innovation be taught or is it inherited? Answer: both.

If you have a spark, a great school can develop it. If you don’t… never mind. 

Here’s another hint. We don’t ‘teach’ anything, you learn by discovering. Instead of a silly lecture about ‘globalization’, we will send you to a different continent with a team to solve a logistics problem. Instead of lecturing about what an entrepreneur is, you will come up with your own idea, form your own team and build a company. If you are at a school that does not do that: demand a refund! 

Most people are going to get an MBA because they want to change their careers in some way – either going to a different company or pick a different skill set, right? If you are going back to that same job, just getting your ticket stamped, stay at home. An MBA program is too long, too hard, and too expensive for just that.

Innovation in business

If employers could isolate the illusive ‘innovative’ gene, they could bypass the whole interview process and just have you submit a lock of your hair, they would. But no one has yet figured that out, so companies do the next best thing - they look for people that can combine innovation with experience to find better ways to do things. Innovation cannot just come from delivering products or services; it may be in logistics, in financing, in marketing. It may be in organizational design or a better way to package.

Two points. You may someday want to start your own company, as many of our MIT Sloan students do. Here’s a hint: make sure that all of our starting team is as good in their jobs as you are in yours – as innovative, as committed, as uncompromising. Then, as you grow, you can demand that they also do not compromise.

 That is how great companies are built. If no company has a long term strategic advantage, then a company’s only real asset are the innovative people who will find better ways.

Second hint: The real advantage of someday starting a company or being on a starting team: you will never use all your talents again as intensively as you do in a startup.

Business is an exciting and evolving three dimensional multi-user game. You are going to love getting your MBA. Welcome to the club!

-Howard Anderson

The QS MBA World Tour touches down in Johannesburg on Tuesday 29 March and in Nairobi 31 March. For more information and free online registration: http://www.topmba.com/mba-tour/?partnerid=4370

Soft skills in demand, say MBA recruiters

The latest QS recruitment survey, the TopMBA Jobs and Salary Trends Report from late 2010, shows that demand for ‘soft’ skills has drastically increased in importance for MBA recruiters worldwide.

The survey of just over 5,000 MBA recruiters in 36 countries, shows that MBA recruiters already have very high expectations of rigorous finance, marketing and e-business or IT skills from business school graduates. MBA recruiters are now looking for another set of abilities to complement their businesses in today’s competitive economic climate.

The report, which predicts an improvement in MBA recruitment for 2011 in several industries, shows that the big four soft skills demanded by MBAs recruiters are: Interpersonal skills, Communication skills, Strategic Thinking and Leadership. And around 50% of the recruiters that responded are based in Asia; this is notable as MBA students from this region have traditionally been strong in the hard skills associated with business school and weaker in soft skills.

MBA recruitment

This news is unsurprising, however, as TopMBA.com has noted the rise in soft skills for several years. MBA programs globally have taken this demand on board and many top business schools are attempting what can be a tricky balancing act, shoring up MBAs soft skills while, simultaneously, trying to firm up the traditional knowledge that MBAs will need. After all, a great communicator with little idea of financial models is going to severely limit their job opportunities when leaving business school. 

Additionally, many MBA candidates I have spoken to on the QS World MBA Tour, in Asia particularly, fail to appreciate the value of such learning, even seeing it as a waste of time. Especially when compared with more classroom hours with a noted finance professor, for example.

For those MBA candidates, the need to look at the Jobs and Salary Trends Report is greater than ever before. According to recruiters, too many business school graduates hit the job market lacking the demanded skills that go beyond the qualification.

Mitch O’Brien of Emissary Pharmaceuticals in Australia says, “MBAs represent an interesting pool of potential business leaders with broad business skills, however they often come with an arrogant expectation of career progression. I would like to see more emotional intelligence taught and realistic career counselling provided.”

Sean Hewitt, a careers advisor, highlights the following nine areas as a general guide: “Keep a winning attitude; be a team player; communicate effectively; exude confidence; hone your creative skills; accept and learn from criticism; motivate yourself & lead others; multitask and prioritize your to-do list; see the big picture.”

Easier said than done perhaps? Wendy Lyons, Managing Consultant at London’s Human Assets, and an expert in the field, says: “For employers, getting the right people means identifying people with the right skills and qualities to fulfil the role and contribute to the organization’s success and it’s really important to be aware that different roles have different requirements.

"You might need to be an amazing communicator for one role but not necessarily for another so it’s important to recognize what is needed by the role in question.”

Whatever role the MBA graduate is aiming for, improving all areas of their leadership personality, including their soft skills, will greatly benefit their career progress, if the opinions of recruiters are important. And, as the TopMBA Jobs and Salary Trends Report clearly says, MBA recruiters’ opinions are the most important of all.

Basic soft skill development techniques

Despite this, I am often asked about what exactly soft skills are and how to develop them. The simplest answer is to work to your strengths, but work on your weaknesses even harder. It’s clear that the MBA is a complex program, and takes up a lot of time, so doing this while poring over complex case studies may not be everyone’s idea of a good time, but it’s evidently worth it.

The following is a list of suggestions on how to adapt successfully to a role and to learn a better approach to communication, man-management and leadership:

1)      Get specific feedback from colleagues and peers (and clients if you can) on the qualities that are important for the roles you want or may be applying for. Consider ways of capitalizing on your strengths as well as focusing on areas that need development. And prepare to take negative criticism on board as well as positive.

2)      Identify somebody who you think is particularly successful at demonstrating the skills you want to develop. Talk to them/sit in meeting with them and gain an insight into their approach.

3)      Think back to a recent time when you weren’t very successful at influencing or convincing an individual. Ask the individual how you came across and what you might have done differently to be more successful. Prepare for bad news, and accept it.

4)      Develop the habit of critically reviewing the impact you have had after any meeting. Consider ways to increase your impact and put this into practice. A top tip here? Record your thoughts and refer to them before the next meeting.

5)      Take opportunities to regularly network, within your organization and externally. Don’t just approach people when you need their help.
      Spend more time with people who you find difficult to deal with. Don’t just think about your feelings about them, but think about how they might view you. Try out different approaches with them to see if you can develop a more effective relationship with them.

6)               
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-          Ross Geraghty

The Africa leg of the QS MBA World Tour takes place 24 March to 31 March and touches down in Accra, Lagos, Johannesburg and Nairobi. For more information and free online registration visit our website: http://www.topmba.com/mba-tour/?partnerid=4370

Adapting to London: An MBA profile

When he decided that a career change was in order, German born Jochen Mueller opted to look into pursuing an MBA. After his partner was offered a job in London, Mueller explains that accepting his offer at the privately operated TASMAC London School of Business wasn’t a difficult decision to make.

“The advantages of further studies in general, and the possibilities of the TASMAC MBA in particular were too tempting,” Mueller tells TopMBA.com. “So I quit my job, went house hunting in London, organized the move, and a few weeks later I attended the student orientation event at TASMAC.”

However, before making his decision, in order to better understand how studying for an MBA in London would suit him, Mueller sought advice from a fellow countryman who had been through it all before.

“I got in touch with a German MBA alumni who used to work in my office. He told me all about the program he completed at TASMAC, as well as what it was really like to attend business school in London. This offered me a really valuable insight into what life would be like as a student in the city.”

An MBA versus a social life

To Mueller, one of the major benefits of living and studying in London are the many entertainment and sightseeing opportunities the city offers.

“As our time in London is limited, we want to get as much out of it as possible. So we spend at least one day a week in central London, going to concerts, the theatre and visiting the sights.

“I also spend a lot of time with my classmates. We have a good, sociable class and make an effort to share in all London has to offer.”

In fact, the German MBA student has enjoyed his time in London so much, that he doesn’t really consider his program to be work at all.

“It might sound funny, but I don’t perceive the MBA as a burden,” he says. “I am interested in all (okay, most!) of the topics, and I regularly read the newspapers, business books and other essential materials. But of course, I do appreciate the whole concept of the work/life balance.”

Funding an MBA

Mueller might not consider his study to be a burden, but what about the financial cost of the course?

“The funding of my MBA program is divided into the salary of my partner, support from my parents, wages from my part-time job, and my savings. London is one of the most expensive cities to live, but at the same time you want to enjoy the whole range of opportunities that the city offers, so it is advisable to have a sound funding for your studies.

“I would advise MBA candidates in London to try and work part-time, as it is not too hard to find a good job. However, with a pretty tough time schedule, you will need to be well organized for any extra work not to affect your studies.

“I would also recommend that candidates look for suitable scholarships. TASMAC offered me a scholarship for part of my fees, as I fulfilled the requirements. That has really helped me to manage the cost of my course.”

Post-MBA career

Now, eight months into his year-long MBA program, Mueller is contemplating his career options after he graduates.

“After a short holiday, (this is necessary, as the studies are quite demanding!) I am going to apply for a manager position, most likely back in Germany.

“I hope the current positive news about the German economy and labour market proves to be true, and that I will find a good job quickly. I am very confident that I will succeed in my next role as I feel that my business school prepared me well for the demanding needs of the current business life. It has helped me to develop both my hard- and soft-skills.”

Meet with the admissions staff and alumni of the TASMAC London School of Business at the QS MBA Fair in Accra 24 March. Free online registration

MBAs Salaries – expectations and reality

Nunzio Quacquarelli, editor of topmba.com, compares the latest reported salary data, with expectations of MBA applicants.

In an era of financial uncertainty and intense global competition, the MBA qualification is becoming a safe haven for young professionals seeking career advancement and salary progression.

First degree graduates and young professionals around the world have been hard hit by the credit crunch. Unemployment rates amongst new graduates has reached 10% in the USA, and as high as 20% in some EU and Asian countries.

By contrast business schools continued to report good post-MBA placement figures. Last year 279 business schools reported that over 90% of their class had job offers three months after graduation and 123 schools reported average salaries in excess of $75,000, according to the latest TopMBA.com/Scorecard.

The 2009 edition of TopMBA.com/Scorecard – the personalised business school ranking tool - reveals the average salaries self-reported by 350 of the world’s leading business schools.  IMD, IESE, London Business School, Stanford and INSEAD reported the highest average salaries in this latest edition based on students graduating in Summer/Fall of 2008.

Table 1: Averages by region for the 50 business schools reporting the highest salaries

Schools In	Average base starting salary US$	Range: Min. Salary	Range: Max. Salary	% Accepted employment 3 months after graduation	Average years work experience	Number of schools in top 50
North America	102094	93000	117000	91	5	19
Europe	106595	94000	129000	90	6	27
AustralAsia	101010	97000	105000	93	7	4

Source; QS TopMBA.com/Scorecard 2009

Table 1 reveals that of the 50 business schools yielding the highest salaries, 19 are in North America, 27 in Europe and 4 are in Australia and Asia. Employment rates are similar across all these schools with between 90-93% of students having accepted employment within three months of graduation and the profile of candidates is similar, with an average of five to seven years of work experience. In the 1990s, salaries for graduates of top US schools like Harvard, Wharton and Stanford were consistently higher than their European counterparts. In 2008/9 it is European schools which take the honours with an average reported starting salary of $105,248. It’s important to note though that the above salary figures do not include the guaranteed bonuses received by many MBAs and which are more common amongst graduates of US business schools.

IMD in Switzerland reports the highest average salary among European schools at $129,000 (up from $121,000 in the previous year). Janet Shaner of IMD says, “IMD looks for high-achievers and their general management MBA results in many of their graduating MBAs entering industrial and commercial management functions within Europe, a segment where demand is continuing to grow.”

But it’s not just the established business schools producing impressive salaries on graduation. Ashridge Business School reports an average starting salary of US$115,000 for their 50 MBA students. Amy Armstrong of Ashridge says, “our students have an average of over 10 years of work experience and they remain in strong demand with employers, even during an economic downturn.” Small class sizes, slightly more years of work experience and the strong Euro go, some way to explain why European schools are outperforming their international counterparts.

Comparing MBA Salaries with Expectations

MBA salaries have stood up well during the recession, but it is important for MBA applicants to remain realistic about what is achievable. QS TopMBA has also recently surveyed applicants to measure these expectations with some surprising results.

Table 2 shows the expected salaries amongst MBA applicants from countries around the world, the percentage uplift compared to current salary and the proportion intending to study outside their home country. Candidates from Japan, the USA, UK, Germany and Canada have high current salary levels and realistic salary expectations in the range of $90-116,000, representing salary uplifts of between 58-85%. U.S. candidates primarily are looking to stay in their own country to study and benefit from the high local salary levels. Although the 12% looking to study overseas represents an increase on previous years, as they seek to differentiate themselves form the large numbers of locally educated MBAs by gaining international experience.

Table 2: Comparison of current verse expected salaries for MBA applicants

	Current Salary $	Target Salary $	Expected % Salary Increase	% Looking To Study Overseas
Japan	69,852	111,000	58%	80%
United States	62,892	116,198	85%	12%
Germany	57,053	90,384	58%	75%
United Kingdom	52,812	91,250	84%	18%
Canada	51,034	100,378	73%	34%
Brazil	49,054	109,539	123%	96%
France	48,467	93,269	92%	55%
Italy	42,500	99,230	133%	65%
Israel	41,851	141,500	258%	85%
Singapore	40,795	86,617	112%	54%
Turkey	40,416	77,065	91%	89%
Russia	40,020	105,827	164%	88%
Spain	39,852	81,617	105%	65%
India	35,339	96,145	172%	75%
China	34,417	81,504	137%	85%
Mexico	34,414	69,342	101%	87%
Venezuela	30,135	64,609	114%	90%
Peru	29,594	87,714	196%	93%
Taiwan	28,750	80,000	178%	85%

Source: TopMBA.com Applicant Research 2009

Table 2 also reveals that applicants from some countries might have unrealistic expectations. Israeli applicants expect a salary uplift of 258%, with target salary level of $141,000 per annum. This is achievable for those who join top investment banks and consulting firms. However, in the current economic climate it is unrealistic for all Israeli candidates to receive job offers from these elite firms.

For candidates from emerging markets, a high proportion intend studying overseas, in the USA, Canada, Australia or the European Union and their salary expectations are based on securing employment in the country in which they choose to study. Visa restrictions on working in the country of study vary. At present, the USA has limited the number of work visas available to graduating MBAs. By contrast the European Union, Australia and Canada have very favourable work visa environments.

Despite the global recession, MBA employers have continued to recruit international MBA candidates. Lord Michael Hastings, Global Head of Diversity at KPMG International, says “KPMG is constantly working with global clients who are not just saying ‘here is a tax issue we’d like you to advise us with.’ They are asking us how we shall function to best develop our business. MBAs provide this richness of perspective that is not easy to pick up by standard study. There is huge value to MBAs.” With the prospect of economic recovery in 2010, the likelihood is that the current crop of MBA applicants will achieve their salary objectives when they graduate in 2011.