Archive for the ‘Interviews’ Category

This is the original, unedited English version of my interview to Katie Kross, published on AméricaEconomía on September 1st.

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Katie Kross, author, academic and professor

Katie Kross is the Managing Director of the Center for Energy, Development and the Global Environment (EDGE) at Duke University’s Fuqua School of Business. She is the author of Profession and Purpose: A Resource Guide for MBA Careers in Sustainability (Greenleaf Publishing, 2014).

Could you introduce the goals of EDGE to AméricaEconomía’s readership?

As the world’s population continues to rise and become increasingly urbanized and industrialized, one of the biggest business questions of our time will be: how are we going to sustainably provide the energy and natural resources needed to meet that demand? The ability to access and use resources efficiently is an opportunity for competitive advantage not just in the energy sector but in nearly every industry.

At EDGE, we help current and future business leaders understand how energy and environmental challenges present both risks and opportunities for businesses. We offer education programs for MBA students, convene thought leaders, and pursue research on topics at the intersection of business, energy, and environmental issues. Fundamentally, these are issues of corporate strategy and competition that are going to be paramount for business leaders in the next few decades.

For a news consumer, it would seem that today every effort to foster sustainability is against business profits. What’s your main argument when convincing students and influencers about the need and benefits of implementing sustainable business practices?

There are different ways that sustainability practices return value to businesses. Some are direct – for instance, energy and waste reductions may lead directly to operational cost savings. But often, sustainability practices yield intangible benefits, like improved brand reputation, worker productivity, or employee attraction and retention. For example, retailers who have implemented green lighting strategies in their stores have yielded not just energy savings but also increased sales in those stores because the new lighting makes for more appealing merchandising.

When speaking with MBA students, I encourage them to understand how to make the “business case” for sustainability. That means understanding how sustainability is linked to these intangible benefits and then quantifying them in terms that can stand up to shareholder scrutiny. The business case will vary by company and by industry. But sustainability will never survive as a business strategy purely because it is “the right thing to do”; it must also be the profitable thing to do.

– In the long run, what would you suggest to MBA students and candidates in terms of career choices that bet for sustainability as a center piece of their activity?

For students who are interested in sustainable business, there are opportunities to work in the corporate sustainability or corporate social responsibility (CSR) departments at big corporations. There are also opportunities to work in sustainability consulting. But there are also ways for MBAs to apply their passion for environmental and energy strategies in many other roles. They might work in a traditional MBA role – in marketing, finance, or operations – but incorporate sustainability principles into how they think about those roles. They might also choose to work in business development or operations for a company that is working directly on cleantech or energy technologies.

In my book, Profession and Purpose, I try to illustrate that there are many possible paths for MBA graduates who are interested in putting their passion for sustainability into practice—whether that is as a sustainability program manager for Facebook, a green product marketer for Johnson & Johnson, a portfolio manager in the “impact investing” industry, or any number of other options.

– To what extent the private and public sector is prepared to offer such careers to students? To what extent the role of entrepreneurship can be of relevance in pushing forward sustainable business models, ideas, innovations, and practices?

Most of the world’s largest companies have established corporate sustainability or CSR departments. But sustainability is still a relatively new business practice, so the jobs within those departments are evolving as companies become more sophisticated in their approaches. The sustainability jobs that will exist 5 years from now may not exist right now. So, job seekers who are interested in these roles have to be entrepreneurial in their approach to the job search, often writing their own job descriptions.

There is also the need and opportunity for entrepreneurs who are inventing new approaches to the world’s energy and sustainability challenges. We have seen tremendous growth in energy industry hiring, and I expect we will continue to see exciting innovation opportunities for the entrepreneurs who want to address energy and environmental challenges with new solutions.

– What do you think are the biggest challenges that corporate America faces when adopting more sustainable business practices? And how do you see these challenges can be different from other regions in the world, such as Latin America?

One of the challenges that corporate America faces when adopting sustainable business practices is the challenge of measuring and quantifying the “business case” for sustainability. As I mentioned earlier, sustainability can yield substantial intangible benefits for companies, but it can be hard to measure, monetize, and report on those benefits to shareholders. Organizations like the Sustainability Accounting Standards Board are working with industry to bring standardization to sustainability disclosures, but there is still much work to be done.

Another challenge is that many corporations that have an established sustainability program have already captured much of the “low-hanging fruit” when it comes to operational efficiencies. They are now moving onto address sustainability issues that are more complex, involve more stakeholders, and require more systematic change. For instance, achieving a goal of zero waste, which Walmart has set, or assessing the sustainability of all of your products’ materials, like Nike is doing, can be more complicated challenges to tackle.

– As a female leader who advocates sustainability in business, one could argue you have to face a twofold resistance. Is that so? What do you say is the biggest resistance you must overcome?

I am proud and inspired to see many female executives leading in the sustainable business realm. Some of the women whose leadership I take inspiration from, for instance, are Linda Fisher, Chief Sustainability Officer (CSO) at DuPont; Bea Perez, CSO of The Coca-Cola Company; Diane Holdorf, CSO at Kellogg Company; Trisa Thompsen, VP of corporate social responsibility at Dell; Hannah Jones, VP of Sustainable Business & Innovation at Nike; and author Christine Bader, among others. I’ve also found groups like the Women’s Network for a Sustainable Future to be useful for making connections with female mentors and collaborators.

There is, in general, a strong collegiality among sustainable business practitioners. Further, sustainability is a business disciplines that benefits from diverse perspectives and stakeholder inclusion. The sustainability challenges that businesses and society face require ingenuity, creativity, and collaboration from all corners of the world, from men and women alike.

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Linda Livingstone, current Chair at AACSB

Linda Livingstone, current Chair at AACSB

As new elected Chair at AACSB, Livingstone share her perspectives and ideas regarding current and future challenges faced by leaders -both corporate and academic- as well as the Business Schools’ role in improving the quality of education.

This is the original, unedited English version of the interview to Linda Livingstone published on AméricaEconomía on August 7, 2014. 

You are assuming as Chair of AACSB in a time when B-schools from all over the world are competing even more to attract the best candidates and faculty. But there’s also a need to foster collaboration in order to give students exposure to various cultural and business environments. How will the AACSB balance its relationships with individual schools, and its role in improving management standards in different regions of the world?

We see those two issues as really working together. As we work with individual schools to help them improve and get better and to advance what they are doing, it obviously has an impact on the quality of management education in whatever region of the world that they are part of. In addition to working with individual schools and with schools within a region of the world, we are also working hard to find better ways to connect schools across regions of the world. We see how a lot of that has already happened. The more we can do about that, the more we can learn from each other, because in different places of the world, people think differently, have different challenges and different opportunities.

So it is about working at those three levels, individual schools, schools within a region, and connecting schools across different regions.

There are a lot of new concepts and notions claiming what the best management standards or strategies are. Looking at the bottom line and seeking efficiency is neck to neck with the need to take risks fostering innovation and creativity. How are the AACSB standards assessing the new programs that schools create to tackle new needs and concepts?

The way standards are written in AACSB, they very much focus on schools’ missions, wanting to ensure that any new program, anything the school is doing, is driving that condition as an institution. That’s at the upper level.

We are really trying to apply those across all process at the school, whether it’s existing programs they had for many years or its new programs, to ensure that they are really seeking to provide high quality at any program they are providing.

And they have standards for the kind of faculty they have in the classroom and the kind of services of support they provide to students. The standards are really applicable to all programs.

It’s all about helping the school to think about its mission and how it’s playing out in the different programs.

In terms of keeping up with new developments, we have conferences and seminars we give around the world, where deans and faculty and staff of business schools come together and share with one another what they are doing, what’s working, what the challenges are. What we are really trying to do is creating learning communities of business schools professionals to share and learn from each other.

It’s about the standards but also about other things business schools are doing. As we all think differently, we spend a lot of time learning from each other. Learning best practices of others.

Other thing that has been discussed about it’s this issue of efficiency kind of versus fostering innovation and creativity, which is a great issue we are all dealing with. I do think that the need for efficiency and finding the most cost effective ways to do things in business, as opposed to creativity and innovation and making think differently on how we do things, I think often they can work together. They may seem to be mutually exclusive and working against one another but I think in reality in many cases is the need to be more envisioned as to think differently helps us to be more creative and to be more innovative as business schools.

There has been a polemic around MOOCs. Despite different visions, opinions and implementations carried out by different B-Schools, it seems that online courses are here to stay and will impact even more the management education worldwide. Where is AACSB standing in this regard? Is there any debate, or consideration towards creating standards, or offering accreditation to some MOOCs?

The way accreditation works with AACSB is that we accredit institutions or business school units. We don’t accredit individual programs. When the business school unit is accredited, all of the programs within that institution are looked at. If the institution is accredited, then all programs are accredited.

When we revised the standards in 2013, we had a pretty significant discussion whether we should have a separate set of standards for online courses or online programs, meant for more traditional online programs, and we made a decision that we would not do that. We would have a set of standards that would apply regardless of the delivery mode, the location of the program.

We try to determine always if schools are delivering programs in a high quality way, regardless of the delivery mode.

The standards look across all kinds of delivery systems in a school.

What happens when a school creates an alliance with another school, which maybe not be accredited? Would that affect the initial accreditation received?

A school is reviewed every five years, taking the standards into account for that revision. As such, the school would maintain accreditation through that whole period. If it adds new programs during that five years period, then it would fall under the review of the next revision on schedule. Unless something very unusual happens, we would not go back to review a school that had received accreditation after one or two years.

If the school is partnering with another school that is not accredited, the program in which they are partnering has to meet the accreditation standards, even if the other school is not.

Today female leaders are under the spotlight -both in the public and private sectors. As female leader, what do you think will be the most important challenges that a woman in a leading position faces now and will be facing in the near future?

I don’t really think that the challenges women leaders are going to be facing in the future are going to be much different from the challenges male leaders will be facing. I do think sometimes society is expecting women to respond differently to those, which may or may not be the case. But I think in general, whether it’s in higher education or other areas, being able to drive innovation and change, and help lead an organization through change, it’s critically important.

Technology is having such an impact, also education reforms around the world is a bigger issue, we are getting a lot of pressure on pricing and cost of higher education. There’s also increasing competition and increasing quality of higher education around the world. Being able to manage in this ever changing environment, being able to innovate in it, in the middle of resource-constrains circumstances, it is a true challenge for anybody leading an organization, particularly in higher education.

As emerging economies, especially in Latin America, keep developing and attracting FDI, it is crucial to produce professionals with management skills able to perform at global levels. From the AACSB perspective, is there a perceivable evolution in the quality and competences of business graduates in Latin America? Is there any strategy or initiative or actions that AACSB will be supporting, or leading or contributing to within the next years?

We have already seen a significant growth and development in the quality of management education in Latin America. There are some outstanding schools in Latin America that are producing exceptional graduates. We are seeing an increasing number of schools in that region desiring to participate in the AACSB activities and seminars and conferences because they want to continuously improve what they are doing. I believe we will continue to see the enhancement of quality of programs and graduates.

In terms of strategies or initiatives from the AACSB, we have a task force now looking at how we can best serve management education around the world. We spend a lot of time in focus groups with different leaders from different regions of the world including Latin America. From what we learn, I think we will be seeing more and more tailor offering, based on the specific needs of that region. An example is a seminar we did, our first seminar in Spanish in Latin America. It was very well received, great attendance.

I think we will see a development of the quality, if in a somewhat different way than in other regions of the world.

Geoffrey Garrett will assume duties as the new dean at Wharton, UPenn, very soon next July. He answered questions for AmericaEconomia, this is the original English version.

Geoffrey Garrett, new dean at Wharton

Geoffrey Garrett, new dean at Wharton

Wharton is a global powerhouse when it comes to business education, but the current context is determined by uncertainty, change and constant need to adapt to new directions. What’s the vision of the new dean to lead Wharton to its next step?

It would be hasty of me to talk about a vision specifically for Wharton given the newness of my role. However, I think there are three big trends in the world that are affecting not only business education, but the world of business as well, that Wharton is very well placed to respond to.

First, globalization is affecting everything—and that doesn’t mean just traditional trade and capital flows, but more importantly multinational firms and global supply and distribution channels. Business schools are in essence like MNCs, and have to focus on internationalizing the curriculum, building international alliances, and creating international opportunities for students and faculty. The new Penn Wharton center in Beijing will be in the vanguard of this educational globalization.

Second, technology is disrupting business models from newspapers and retail to 3D printing and manufacturing. Challenges are everywhere, but so too are opportunities. Some people worry that universities are an endangered species, like newspapers and retail malls. But if we are smart, the opportunities provided by technology both to improve the quality of what we do and to increase its reach are immense. Wharton’s leadership role in the dominant MOOC platform, Coursera, is a prime example.

Third, while societal demands from better infrastructure to accommodating aging populations are ever increasing, the ability of cash-strapped governments to respond to them is limited. This will inevitably mean involving the private sector more in solving big global problems, from start ups for purifying water in Africa to financial innovations in public-private infrastructure partnerships. Wharton’s public policy initiative to bring business savvy to major policy challenges will be an important catalyst for new thinking and new action on the public impact of the private sector.

What will be the most important priorities for Dean Garrett, as soon as he takes over the role of new dean at Wharton?

Assess and absorb! Wharton is a huge institution with two campuses in Philadelphia and San Francisco, more than 230 faculty members, 5000 undergraduates, over 850 MBAs, 9000 executive educations clients annually and 92,000 alumni in its network. Taking over the role will require an exploration and discovery of all Wharton’s assets, its strengths and where there are opportunities for growth.

It was recently reported that Wharton has reached the first position of the U.S. News & World Report ranking, along Harvard and Stanford. But some months ago, there were concerns about the admission process, and declining interest on the school from MBA candidates. What is the actual situation of the school?

Admissions numbers dip and rise naturally in all business schools. The important factors for Wharton are the caliber of its class (this year’s GMAT was 725), its high yield (meaning better-suited students), the diversity of its student pool (42% women, 35% international students from 71 countries) and our high job placements (97.8% of last year’s class accepted job offers within three months of graduation.)

Prof. Garrett stated, “globalization and technological change are poised to transform business education. I have no doubt Wharton will be in the vanguard of this transformation” here and in other countries”. How does he envision that transformation? How does Wharton plan to be at the vanguard of transformation? Could you mention some concrete actions, innovations or initiatives?

Wharton has had a strong global brand for decades. In addition, Wharton believes in bringing the world into the classroom to prepare our students to be truly global leaders. We offer 10 intense in-country Global Modular Courses around the world, faculty and student exchange trips, partnerships with dozens of international institutions and a new point of presence in Beijing slated to open in 2015. My experience in Australia and as an Australian gives me a unique view to see Wharton as an asset to the world though seated on both coasts in the United States. Through the transformative nature of online education, like Wharton’s current work in Coursera, the School can touch more people than ever before in the world. In addition, the continued progression of using online modes of programming will shape a new method of pedagogy that opens up possibilities beyond geographical borders.

Wharton has taken steps to collaborate with other international business schools, to provide students with opportunities of a global experience (i.e. the “Business Strategy and Operational Execution: Bridging the Divide” course for the CEO Global program with IESE). Is this a trend that will continue? Are there any other global school being considered for future collaborations?

Wharton believes in partnerships with other institutions to share knowledge with scholars across the globe.  We continue to look for and explore those opportunities.

Considering that Latin American countries, and other emerging countries, will now offer the biggest pool of student candidates, is there any particular initiative or strategies to address these markets?

Latin America continues to be an important region to Wharton not only in attracting prospective students, but also in looking at some of those emerging economies that are vital in understand global business. The successes of major economies like Brazil in the past decade or so have been extremely impressive. When we think of emerging markets it is tempting to focus only on growing Asian titans like China, India and Indonesia. But the strength of democracy and free markets in Latin America positions the region ahead of Asia in terms of developmental time lines. For a school like Wharton, Latin America has to be an important pillar of its globalization strategy.

Dave Senay is the CEO of FleishmanHillard, one of the most relevant Communications firms in the USA, and the world. Its portfolio includes corporate clients and government institutions. It was recently named Large Agency of the Year at the 2014 PRWeek Awards.

Dave Senay, FleishmanHillard CEO

Dave Senay, FleishmanHillard CEO

A few weeks ago, I found on my LinkedIn feed an ad to a webinar about effective workplaces, sponsored by FleishmanHillard. He was the main keynote speaker. So I reached out to their team to ask for an interview.

I haven’t met Senay face to face, but from our conversation over the phone I could tell he is a seasoned communicator, a cut-to-the-chase with strong commonsense kind of guy. Even though this could sound at odds with the image we all have about PR people with their perennial smiles and uncontested diplomacy, it would be nice to think that a PR firm is led by someone so refreshingly straightforward.

Any case, these are Dave Senay’s answers to my questions. This is the unedited, English version of the interview published in Spanish by AmericaEconomia.

Fleishman Hillard has built a solid reputation as global communications firm. But this is a time of change and uncertainty. What are the biggest challenges that a company in service of other company’ image, brand and reputation is facing and will need to address in the near future?

In the old days, you could organize around brands and organize around reputation separately, because they tended to be governed by different audiences. That is no longer the case. Brand and reputation are now working together inextricably. You cannot separate those two.
Therefore organizations have to reflect that in how they arrange their functions. Agencies like ours have to react by developing new skillsets that help clients maximize the interplay between brand and reputation.

Previously, what was a brand? It was a promise. It was what we said about ourselves, what we broadcast out there, what we promise to do. It sets an expectation.

What’s reputation? It’s what others say about you. That is usually based on their experience. Today you could be in the most remote part of the world and have an experience with a brand. If that experience doesn’t match your expectation, what the brand promised, what are you going to do? You are going to do what we all do today: that is share the experience with hundreds, if not millions of followers through shared media.

Suddenly the brand experience becomes a reputation experience. Nothing happens today without someone talking about it or sharing it. This is why reputation drives so much purchase consideration. That’s really at the heart of our business today. Of course the accelerator of all this, the thing that has lit the fire is social media, the ability to share, to publish, to critique anything at anywhere at anytime. In summary, that is the number one challenge.

Others would say we are in an era of great transparency. That’s true. There’s nothing that happens that someone won’t eventually find out. Telling the truth, behaving ethically and honorably, delivering on the promises, it is the number one guarantee in Public Relations.

Public Relations is not the solution for unsupportable behavior.

Technology is changing the way a company interacts with stakeholders. With so many venues and platforms both offline and online, how can a company reach coherence in the way its brand and identity are communicated?

There are some structural changes occuring in corporate America. I would say there’s quite a movement to plant all communications, including PR, under the wings of the Chief Marketing Officer (CMO).

In the all days the Chief Communications Officer (CCO) would be the top corporate communications person reporting to the CEO. Many argue that he/she still should. But the CMO seems to have become the one winning the battle of creating that coherence.

It all starts with a very good understanding of the identity of the company, the corporate character. Everything tends to spring from there.
We’ve created a model that it is called the authenticity gap. It measures nine drivers of reputation and brand, by industry, by company and by country.

You’ll see the public has certain expectations along those nine drivers. For example, innovation, treating employees well, performing consistently, taking care of the environment.

You can compare what consumers are experiencing versus what they expect. We call that distance between expectation and experience, the authenticity gap. Now that we have tools, I think organizations can’t help the interrelation between reputation and brand. This is important because we are learning that reputation issues drive purchase, more than anybody ever thought.

With so many digital/social platforms, associates, clients and allies who are all senders and receivers or information. How are these media changing the way employers communicate with staff and stakeholders worldwide?

In the old days it was all push. We were pushing messages, sometimes in the most unwelcomed way. We were interrupting people’s lives when they didn’t want to be interrupted.

As well, on earlier days there were fewer touch points. My father read the morning paper when he got up, he might have listened to the radio while driving in the car, at his work he probably talked to few people, and then over the phone maybe to five people all day, then he came home and listened to the radio and maybe the evening news.

Today, you are choosing between a tidal wave of interaction opportunities. The way that you interact is very special to you. Only you interact with media the way you do. I call it the media consumption fingerprints. Everyone has their own media consumption fingerprint.

The idea isn’t to put a target on your back and hunt you down and harpoon you with messages you don’t want. The idea is to understand you so well that I can show up where you are showing up, so you can discover me as part of your life in a way that is timely, personal, relevant, useful, credible, and even entertaining. If our marketing does that, they are going to be a success.

We have the technology today to be able to reach anyone, anywhere, at any time, with any message through any channel. And this is a very important point for a company like ours. Once we have the story, the message, at the very end of the process, we are deciding the media mix. We include earned media, shared media -which is very much a cousin of earned media, much more in PR because it is about dialogue and relationships, not monologue and transactions. But we also use paid media.

This is shocking to some people, that PR firms are using more and more paid media. The reason isn’t that we want to become advertising agencies: we don’t. We think advertising agencies models are broken. We will use paid media if it makes sense to match up with the media consumption model of our audience.

With such fragmented audiences and so many media choices, how do you make sure to be at the right place at the right time? Do firms need to be ubiquitous? Is it about keeping up with research, or technology, or both? How to make sure you are reaching out to the right public?

Do you remember the fairy tale about Hansel and Gretel? They went out to the woods and dropped stones on the ground… Well, all of us are leaving our footprints, all of us are leaving little stones on the ground.

We have invested millions of dollars in analytical procedures and people and software and hardware. They data is available today to understand precisely that. Not just what you want, but how it should be delivered to you, with what tone, with what length, at what time of day…

We have a great tool that we call the six Ts, those Ts relate to something like tone, timing, and so forth. We can optimize all of our online communications by understanding the most preferred and welcomed ways for individuals or groups to receive our messages. Even though it sounds like an impossibly large task, the data and the analytics we have today and the ability to crush that data makes it easier and available to great marketers to truly understand the behaviors of their audiences.

From your perspective, what are the main mistakes or problems that companies fall into when communicating their image and reputation?

First and foremost, leadership in this industry requires to be a great deal of focus on the character of the company. The world will want and reward companies that do well and play fair. The world will not reward companies that did not play fair, or which have flawed processes that appear to the public as been uncaring. All this is to say that companies need to align their business objectives to those in society. They need to do so in a way that’s very transparent and understandable.

In communication, and this is one of the great myths, you cannot communicate yourself out of something you behaved yourself into.

If your company has polluted a river, or if it has sold faulty products that don’t work, medicines that hurt people, then you are not going to be able to use communications to wipe wash behaviors like that. Everyone today talks about loss of control, the one place you can control communications is how your corporation behaves. Behavior drives communications.

Long before you get out the press release, or the blog post, or the tweet, you really have to think clearly about how the company works together in a way that is beneficial to society.

I’ve given a number of speeches on this topic of corruption and ethics. The short speech here is that corrupted and unethical business models are not sustainable. Eventually they collapse.

In China they are cracking down on corruption, because they know corruption leads to shortcuts, to food that isn’t healthy, medicines that don’t work, cars that don’t run, electricity that doesn’t work. All because somebody paid somebody off. All that will lead to civil unrest and nobody wants that.

The single biggest issue is to operate as a company in private the way you want people to perceive you in public.

I was in Seattle last March attending the 2014 Sheraton General Manager Global Brand Summit. I was reporting for AmericaEconomia’s print magazine. This is the original, unedited English version of my interview to Hoyt Haper, that was published in its Spanish version by AmericaEconomia on early April. You can now access the full Spanish content online.

HHWhat motivates Starwood’s leadership to conduct continuous research? What are the main research questions and what are some key resulting points?

The reason why we continuously do research is to stay on top of trends and trend-lines. We understand that whatever we create today may not be relevant four years from now. So we are constantly, through our GEI -Guest Experience Questionnaires- learning from our guests. Periodically we conduct research to understand what we have to focus on next.

The Link@Sheraton, for example. When we decided to create this lobby experience, we asked ourselves “does it work everywhere? Do people in all parts of the world relate to the notion of getting out of your guest room?” So we tested this idea in Boston, in Bangkok, in Brussels and in Buenos Aires. We found these ideas and issues are universal. They follow the human truth that is “I want to feel like I belong, I want to feel in control, want to be my best”. There is another human truth that people like to be around other people. So when we executed the lobby experience we did it everywhere.

The other aspect to keep in mind is that we cater to a global customer. So, Buenos Aires is not only a great hotel for locals to travel within the country or the same region. It’s a destination for people from around the world, China, US or Europe. Continuity and consistency of a product is important. People have expectations when they go to a Sheraton and we want to create socially active spaces for them.

Globalization is a common topic, but everything global manifests locally. What is Sheraton doing to achieve a more inclusive image of a client that’s not only linked to a Caucasian-middle-aged-male business traveler?

That’s a very important aspect of our research. Customers are changing all the time. More female travelers, particularly in business such as consulting, high-tech… There’s a world of truly being global. We have an increasing amount of travel from China to South America. There are also great historical connections between Latin America and Europe which fuels traveling both ways. We see these travel patterns, we see our guests changing, so we always need to stay on top of what they need, what’s going to make them feel comfortable, feel at home when they travel.

When I first went to Buenos Aires in 1996, I remember one of my fondest memory is related to the wine shop that was at the lobby of the hotel. Every afternoon between 4 and 6 they had wine tasting. It was not just any wine, but local wines. They are proud of them. They presented them, and conducted the sampling with so much pride. Ten or fifteen years later we are looking at leveraging wine as social beverage and recreating that atmosphere, that experience. Giving our hotels in different countries the opportunity to promote their local wines, making the event locally relevant. Same thing in Chile.

Sheraton is a global brand with hotels in all the different countries and regions, does it consider alliances with local or regional partners, representative brands from specific locations?

It depends. For example we work with Starbucks worldwide now. But five years ago that wasn’t true. The acceptance of Starbucks in Asia or Europe wasn’t as strong as it is today. Now you can go to Eastern Europe and find a Starbucks, you can go to the Great Wall of China and there is a Starbucks.

If there are opportunities to create a more local experiences by working with local operators, that happens too. It depends on what product is it. Dining is an opportunity. I ate more red meat in Argentina than every country I visited before, because it tastes so differently than what I was used to, because of the way it was prepared.

Our guests want local culture. You want to get off your plane and feel like when you get to the hotel you will experience the destination. That’s important to us.

But there are other things. Our customers feel a sense of comfort in knowing that when they get to a Sheraton hotel they will have a Sheraton suite sleeper bed and it will be that bed they are familiar with no matter where they go, that they will have high quality bath amenities, that they feel safe and secure, those are things that are associated with Sheraton. It can also be very practical things, that we have staff that can help them to facilitate a meeting, or help them enhance their social or leisure experience. All those things we want people to expect no matter where they go to a Sheraton in the world.

An orientation toward a more tech-friendly environment is visible, the will to make it easier to connect, to access the hotel services and people from online platforms and mobile devices. Is it part of a strategy that targets Millenials? Is it about rejuvenating and bringing diversity to the Sheraton’s image?

We use technology as an enabler. We use it to connect with our guests more efficiently, to store and pull data. Customers give us data for the sole purpose of us enhancing their experience. It should be easier to connect a phone call with us, it should be easier to make a reservation with us, it should be easier to check in a hotel with us. If I give you information, I expect you will deliver a higher level of service to me. I want those amenities in my room. We normally put still water in rooms, but someone likes sparkling water better, or not necessarily wants to have cheese and wine in the room. So why not to save the money and provide something more relevant to me?

Those are the things we do by leveraging technology. We have technology that it’s guests facing. We are now developing a digital wine list. That becomes important because the availability of the wines changes quite frequently, based on popularity, supply, among others. We might have a special offer that isn’t normally on our list; on the digital menu we could change it in an instant. The customer may want to know more about the wine, then it would be useful to offer an option for video or text content with further details.

Moving into a digital age allows us to provide more information. You may want to rate our wines; we have professional ratings but everybody’s tastes are different. So having guests tell other guests which wines they like the best is information and it makes it fun and interesting.

Technology will touch almost every aspect of the guest experience, from how you make your reservation to how you communicate with us at arrival, making us to know when you will walk in through the door so we are on time delivering your amenities. It will touch the way you communicate with us during stay. Before picking up a phone you may just want to send us a text because it’s more convenient, or asks us something…

We are also looking at ways to create more self-service. You can help yourself to a cup of coffee, or a single glass of wine. We have automated wine dispensers that we are testing now and we could put in our club lounge. There are lots of ways in which technology will touch the guest experience and we want to be cutting edge.

It was announced that Sheraton has enabled a specific website devoted to Chinese travelers. Is it there any difference in the message Sheraton wants to convey to different regions of the world?

We want to speak to our guests in the language of their preference, through the channel of their preference, whether it is phone or text, or website, or social media, we want to be responsive no matter the channel the guests will select.

We have an elaborate program to handle Chinese travelers going to other parts of the world, that relate for example to different food items. They are also more likely to wear slippers so we provide it in the rooms. They are not as accustomed to the social gathering places we create. So we are creating opportunities for them to interact in a setting they feel more comfortable. Same thing is happening with India, as India becomes a big outbound travel market. It is also about providing training and cultural awareness to the associates. It involves education, information to our associates, which will help us deliver more relevant services and make people feel like they belong.

There are also differences we find among the genders, not only cultural. There are certain items some gender values more… We all value to feel safe and secure, but there are some items women care about more than men. For example, the idea of having an adjoining door, women don’t feel comfortable with it. But we have guests who ask for the adjoining door because they are traveling with their children. Actually some guests don’t want it for the noise factor.

We have to cater to all different types of customers. We have airlines crews and they have their own inspection process focused on security and safety. There’s a lot that goes into our big bookings and operations of a hotel.

We are careful not to make assumptions. We prefer to ask questions and have that dialogue with the customer.

Are there any particular strategy or future projects designed for Latin America? Are there any plans to change ownership of assets and keep the brand and management fees?

We have an asset light strategy. That means we are primarily in the business of managing and franchising hotels.

That being said, we are always looking for opportunities to enhance our portfolio in properties, which might mean an acquisition or an opportunity to sell anything at the right price. The real state is something we are always mindful of. We just spent 55 million dollars renovating the Sheraton in Rio. It will be in its best shape in two decades, getting ready to welcome the World Cup in Brazil. We have new openings in Recife and Bolivia. So our portfolio continues to expand. Buying and selling hotels is something it’s done on opportunistic bases. There’s no strategy to sell anything at this point.

Arturo Bris, Spanish author, researcher and professor at Swiss IMD, was recently appointed as head of the World Competitiveness Center (WCC). This is the original, unedited English version of this interview published by AméricaEconomía on March 3rd, 2014, accessible here.

Arturo Bris, head at WCC

Arturo Bris, head at WCC

As new director of the World Competitiveness Center (WCC), what are the most pressing challenges that will define your work?

The competitiveness of nations is currently on top of politicians’ agendas these days. We are observing anyhow that also corporate executives and industry leaders see country factors as relevant at determining their own competitiveness. Therefore the ability to create wealth and welfare (this is how we define “Competitiveness” of nations) needs to be looked at with a different lens and methodology. We are currently working to extend our approach to measuring competitiveness.

Prof. Pankaj Ghemawat has argued that a comparison between developed and developing economies would show how the availability of management talent and skills can make a difference. You have examined competitiveness in developed and developing economies so you must have a very clear notion of what fosters competitiveness. What’s your point of view over Ghemawat’s argument?

Management skills are certainly a driving force in the competitiveness of nations. The 2013 IMD World Competitiveness report shows that countries that rank the highest in terms of Management Skills (Switzerland, Denmark and Singapore in this order) are also among the most competitive economies. With respect to business schools, their location in a global world is somehow irrelevant, and it does not seem to be the case that developing management education in the home country results is more economic development. Switzerland is one of the most competitiveness nations in our rankings, and also home of several world-class business schools, IMD being at the forefront. But Switzerland is the exception rather than the rule: there are no highly-ranked business schools in countries such as Sweden, Taiwan, Norway, and Germany, however these countries have ranked historically among the top ten in terms of competitiveness.

When it comes to determine which factors make a company competitive, fostering innovation, keeping control over cash flows and excellence in customer service, come at the very top of any list. When it comes to nations, what are the relevant categories?

First, as I mentioned above, variables such as the strength of a country’s financials and the quality of the country brand are also extremely significant at explaining the competitiveness of companies. In any case, competitiveness at the firm level is understood as the ability of the company to excel among its peers. One company becomes more competitive at the expense of another industry rival. Competition at the national level instead requires cooperation among nations—that is, countries can all become more competitive at the same time.

However, our experience has shown that only those economies that manage both their intangible institutions (education, management values) and their infrastructure (regulation, transportation network) stay competitive.

What can companies learn about the management of a national economy, and the other way around?

The lesson for firms is that winning the market in the short term may not be enough—they need to preserve and develop talent, work with society, generate future business at the expense of current profits.

What can countries learn from how companies compete? There is no doubt to me that the world economy would have fared better if world politicians had behaved like business leaders. Talent is the factor that determines which individuals end up in the top positions of our large companies. Excellence is almost always rewarded in the corporate world—however the way to political leadership is a process which in most countries does not guarantee that the most talented become leaders. Why do CEOs and senior executives attend IMD’s business programs, but not Presidents or Prime Ministers?

When you compare competitiveness among nations, what are the key elements to observe? When observing their limitations and potential solutions, what are the factors and frequently hamper a nation’s progress?

There is an interesting academic debate regarding which factors determine the competitive of nations. Researches like Jarred Diamond would agree that access to natural resources has been, or their lack therein, determines the fate of nations. More recently, Acemoglou and Robinson (“Why Nations Fail”) have argued that history shows that competitiveness requires that countries develop the right institutions (“inclusive institutions” as they call them).

At IMD we have shown over the last 25 years that the latter is more important: nations that are rich in natural resources but fail to develop an institutional framework that facilitates business and growth rank very low in competitiveness (e.g. Venezuela). However, natural resources are not a necessary condition for competitiveness: Qatar, the UAE and Hong Kong are worst in “Access to Water” among 60 economies, yet in the top ten of competitiveness.

You have defined Economics as “the science that studies the allocation of scarce resources”. Political science defines politics as the answer to the question of “who gets what”. Both definitions sound similar. From your perspective, is the increasing political polarization in the legislative institutions of modern democracies affecting the economic performance of the countries? How so?

Those definitions correctly point out to the normative aspect of both fields. However economists study primarily the role of markets in the allocation of resources. Markets need to be regulated, and regulation is the subject of Political Science. My opinion is that each political approach to a problem is usually in line with a certain economic way of thinking. And both political and economic opinions are nowadays polarized, as they should be in times around crises. I want to think that discrepancies and debate result in efficient outcomes, as long as we respect each other.

This is the original, unedited English version of my interview to prof. John Graham, publish in Spanish by AmericaEconomia on July 27, 2013.

John Graham, professor of Finances at Fuqua

John Graham, professor of Finances at Fuqua

John Graham is professor of finances at Duke’s Fuqua School of Business, where  he is also the head of the Duke/CFO Magazine Global Business Outlook. Along professors Manju Puri and Campbell Harvey, Graham was part of the team of researchers that conducted a study to find out the most common and representative traits of executives at the C-Suite, specially CEOs. The investigation was published with the title “Managerial Attitudes and Corporate Actions”, and the researchers surveyed more than 3 thousand participants from all over the world who answered questions related to personality traits.

Graham offered a unique perspective over relevant data and criteria found during the analysis of the data, concerning the financial, economic and corporate landscape in Latin America and the USA.

What’s the goal of the study?

The study was conducted to see what happens with a premise, with an idea that has been out there. The notion tells that executives have a tendency to show very cautious visions once they have become established, once they have become successful. Then their main goal is to preserve their jobs rather than to necessarily take on more innovation and being entrepreneurial.

Some of that turned out to be true. There is always some force working for that, there’s always going to be a possibility for an executive whose goal becomes to protect his job and act very cautiously. But it turns out as well, when you are actually trying to hire your CEO, you are trying to look for someone who has different characteristics, someone more optimistic, a little less risk averse, somebody willing to take risks.

I want to get around here that even to say someone is overconfident, or someone too optimistic, it may sound bad. But it might actually have some benefits to it, because it might get them to take on risks on projects that might otherwise wouldn’t, and stop being as worried about preserving the way things are today.

Among the characteristics you would look for in a CEO there is for instance how much risks is he willing to take, how confident is he, or she, how optimistic are they, and even how patient are they.Whether they can demand results today or whether they can be patient and willing to wait.

Different research papers, including some of my own, have tested whether these things can affect the decisions companies made. For example, in the paper that was published about it, we performed a psychological test to CEOs and found out which ones are willing to take more or less risks, depending on whether they are more risk tolerant or more risk averse. If they are more risk tolerant, they are more likely to make acquisitions, which is to buy other company, they are more likely to use more debt, more likely to work in companies that are growing faster. In other words, they sort of make decisions that lead to more growth in a more aggressive mode.

Another thing is whether they are very confident, or perhaps even overconfident. We found out that if you are very confident in your company, what you might do is not to pay as many dividends, instead you would hold on to the money for the company and do more investing. If you are a very confident executive you are going to think your company has all these great outcome possibilities, you are not going to pay back to your investors and you are going to hold on back to the cash and you will invest that on projects.

These things can go both ways. You can have people making too many acquisitions, or getting too much debt. But again, this is not necessarily something bad, because some of the best companies are those willing to take chances, willing to invest in things and acquisitions.

So back to psychological traits, there is a tendency to observe that people who are CEO are more optimistic, confident, and more willing to take risks. What may sound dangerous might be good characteristics for an executive, because he/she might be the type of person who can lead the company and be very successful, more than someone who prefer to sit back and be cautious all the time.

There’s a very famous list of professions that are supposed to be preferred by psychopaths. CEO makes the top of that list. And this condition tends to be related to a tendency to self deception. Isn’t there a chance that this sense of optimism could be a mask for not seeing reality, in a self deceptive way?

I don’t think we can make a blunt statement that all CEO are too aggressive or too oblivious of the true risks. That’s probably true for some. On the other hand a little bit of that is probably a good thing. Think of an athlete, star athletes are almost always very confident, too confident in a way yes, but that helps them get through the difficult times because they know they will succeed. Also the soldier, a SEAL, you don’t want them cowering because of lack of confidence. And with a CEO is a bit similar, you want them to evaluate and make tough decisions. But yes, for sure there’s a risk they can be a bit diluted in overconfidence. And they do make mistakes. There’s no doubt.

For example, when you look at mergers and acquisitions, only about 1/3 of them can you look at after the fact and say it was a good acquisition, it made sense, and it worked well. Most of the time you think they paid too much, and what were they thinking, why did they do that? Wouldn’t be better for them not to do anything at all? In some cases probably yes but other cases probably don’t.

It is a bit of a mixed bag. Even politicians for that matter, typically they like to see themselves on TV and else. Unfortunately along with that comes some baggage… And sure CEO can fall under that category as well.

Culturally speaking…?

We did some of these tests to CEO as well as CFO. For the CFO, not only from the USA but also from other parts of the world, we found that US CEO are the most optimistic and confident, more so than US CFOs. It’s almost like in order to become a CEO you have to be a really confident person. CFO in the US were less optimistic, but compared to Asian CFO, US CFO were more optimistic than Asian CFOs. That is probably one of the cultural influences, rather than the job description item.

If you think in Japan, a classic culture, they are basically brought up to be modest people, who tend to not overstate things, not publicly overstate about their skills and confidence levels. It is not the case in the USA, here if you are a winner is allowed to talk about that. There are cultural differences here.

Usually it makes sense to operate within your own culture, to operate your business where you can be successful. If you would transplant a US CEO to Japan, that person wouldn’t necessarily be successful. You have to operate within the context where your business is located.

Having said that, you look at Japan, for the last 25 years, they basically had a very stagnant, zero growth economy, I’m not blaming that on culture, but they should definitely take some actions and changes like to consolidate some of their industries, they should merge companies to have fewer competitors in certain industries, they would be more powerful within the world economy, but they don’t do that because it’s not part of their culture to make this aggressive acquisitions or to give up their own company to an acquisition. And that can be part of the reason why they haven’t changed because they are more cautious, which on the other hand under the light of the financial crisis this may look smart.

We also compare the optimism level of CEO to the optimism of the average person. We found that only about 10% of the people in the US are risk loving. And 80% of CEO would be characterized as risk loving. This can be caused by cultural differences, but it is a very dramatic difference to be just that.

Gender gap in CEO position: how women tend to take risk in comparison to men?

In terms of women CEO, they are more risk averse. They’re more likely to be methodical decision takers, they take more time before taking the decision. Although this is a result from other more general research not ours. Sadly the representation of women in CEO position is still scarce for this study. So it is hard to draw strong conclusions.

What we did find difference: women are more risk averse, it’s not like women need to act like a man, and once she become CEO she needs to be more of a risk taker.

I really don’t know how this affects the odds of becoming CEO, if you are a more cautious person whatever your gender is. But once they become CEO there is a tendency to be more risk averse as a woman in that role.

For example, there is research that shows that men have a tendency to trade more often in the stock market and women tend to buy and hold, stick to the investment for longer. And this is something that should be studied because I’m not implying that any behavior is best, considering for instance that every time you trade in the stock market you have to pay a fee. So it could even be considered as bad strategy to make a lot of trades. Women could actually win better by sticking with the investment. Though I haven’t seen research that proved this point, it’s only my take.

Is there a difference between CEO of startups and really big corporations?

Typically you would like to have the startup person to be a more entrepreneurial person. To succeed you would have to be able to take risks, mortgaging their houses and stuff like that to get by. I don’t know about the large firm vs small firm, but in relation to overconfidence and optimism, it seems to be that the bigger the company gets the more optimist and confident the CEO seems to be.

There’s a psychological occurrence that if you have been involved in a lot of good outcomes and successes, you attribute them to yourself, you are on the winning team. I think it may be probably what’s going on. The higher up, the more important the CEO becomes, it kinds of builds up their confidence and their ego. And maybe the CEO of a startup hasn’t been yet so related to a big success to there hasn’t been that chance to really boost the ego.

How to keep control over the excessive confidence and optimism of CEO? How to tie their benefits to the company’s benefits?

After the crisis, it has been more frequent to find a type of contract stating the CEO’s payment is tied to the performance of the company, often the stock market. Not just for the current year, they are going to make them wait for 3 or 4 years. If things go bad over the next 3 or 4 years they are going to lose whatever they gain on a good year. This is getting popular because of what happened with the financial crisis.