Parasuraman: Service Excellence

Prof. A. Parasuraman, UM

A. Parasuraman teaches at the University of Miami Business School. Among his research goals, it is key to understand the elements that shape the market’s perception over some product, service and ultimately companies, which could also make the difference for business against competitors.

This is the original, unedited, English version of the interview to prof. A. Parasuraman that has been published in Spanish by AméricaEconomía, on December 16, 2013.

Globalization brings along diversity to the demographics of cities and countries. For companies that operate within these increasingly diverse environments, what are the biggest challenges in terms of service excellence?

The world is becoming smaller. Consumers around the world are becoming increasingly aware about what’s available on other parts of the world. I think there’s a general increase of the knowledge of consumers across different countries and different cultures.

To some extent, one can also argue that globalization is also reducing diversity. Nevertheless, markets are getting diverse. For example, in China are a lot of people that are moving to the cities and I’m sure the same is happening in Latin America. Urban population is increasing which brings a growth in the diversity of markets.

In relation to the issue of Service Excellence, among the biggest challenges is trying to understand the aspects of service that will appeal to different segments of customers.

What customer service really means is a very simple proposition. It is something that customers believe really superior companies should provide but often don’t provide. From a customer’s perspective, service excellence can be defined as the gap that exists between what we believe excellent companies should be able to deliver and what a given company within a particular sector is in fact providing. There’s typically a discrepancy between those two.

Studies show that customers’ expectations vary across places, segments and cultures. So that’s why that’s among the biggest challenges.

My own research also suggests that regardless of the type of service, and the part of the world, there soma basics all customers expect.

I think these basics can be summarized in five dimensions. So came up with a method to try to find the discrepancy. The basics underlying are:

One is tangibles, which refers to the appearance of the facility, of the people, appearance of the communication materials that customers receive and so on. Everything that is visual.

Se second is reliability. It has to do with the ability to deliver the promise of the service accurately.

A third component is responsiveness, which has to do with speed of the service and also a general willingness to be helpful to customers.  It addresses the way service employees behave with customers, implying that they really care and they actually want to help.  A lot of times customers feel like having to interrupt employees to get our questions answer or get services delivered, because they seem to be so busy or seem to be doing something else. That suggests a lack of responsiveness.

The fourth component is what I call assurance. This has to do with the courtesy level the employee shows to the customer. The employee is suppose to inspire in the customer the feeling of confidence, so they feel reassured that they are dealing with a responsible and capable organization.

The last component is empathy, which has to do with the extent to which a company and employees do understand what the customer wants and need. They can put themselves in the customers shoes.

They are basic and intuitive dimensions. That’s why I argue that these categories are universal. What might differ from a region to another are the specifics related to those broad categories. For example, if you take responsiveness in the USA, people generally tend to be more impatient. The actual speed of the service delivery might be more critical than let’s say in Latin America where there’s probably more tolerance toward time delay. Instead the willingness to be helpful to the customer probably will not be that different.

There might be some nuances in relation to the categories from country to country and among cultures. For example, if you take McDonalds that is a universal brand, in the USA 70% of the sales occur through the drive thru window, without entering the store. I understand in the vast majority of Latin American countries the sale occurs in the store. The customer goes to the location to sit down and eat. So when contrasting these different operations, it could be said that the appearance aspect of the store is more important in Latin America. Instead in the USA this may be less important than getting the orders correctly, because the customer is waiting the product and doesn’t want to find out later that the product is wrong. These differences need to be managed. Really good companies take this into account when designing the service strategy.

Having that level of understanding is a big challenge for companies that operate globally.

How does UM Business School help business students to understand what the elements of excellence in service are?

At UM we have a unique advantage. One is that the region of South Florida is dominated by service companies. So we have logistic companies, cruise lines, insurances, healthcare services are really big. The context for the students is dominated by the service industry. Thus they are able to explore very different types of companies within the service sector.

In terms of what the UM B-School specifically does to inculcate concepts related to service excellence, there are programs at our graduate level, the MBA program and also the Executive MBA program, and also among the executive education programs which include courses of service excellence and service marketing.

The subject is also among the research guidelines. We speak about a number of concepts and frameworks and measurement approaches to systematically studying how to improve the quality of service.

The idea is to find out what service quality gaps customers are experiencing. It measures the customers understanding of quality of service. We also have done a lot of research inside companies to find out the reasons of this gap.

It is suggested that there are a series of major basic organizational gaps within companies that affect or contribute to the quality of service gap.

The first internal gap is Market Information Gap. This is a lack of understanding in managers about what customers expectations really are. That leads to misallocations of resources to areas that are not really relevant to customers.

The second is the standards gap. In a lot of companies, even senior managers have at least some understanding of what customers want but they don’t translate that knowledge into specifications. There’s a lack of standards for service delivery. In other words, there’s some knowledge somewhere in the organization about what the customers want but that knowledge doesn’t get translated into systems that could actually help improving the quality of service.

The third is the service performance gap which occurs due to a disconnection between what are the internal standards that could be in place and the actual delivery of the service. Returning to the reference of McDonalds, it has a lot of internal standards of service, but it has problems with the delivery of the service. You need the proper infrastructure, technology in place, trained employees, so the connection exists between the standards and the delivery.

The last gap is a serious problem today, and it is a lack of internal communication, a lack of coordination across different functional areas to which customers could potentially interact.

In a lot of companies there’s a lack of communication between the advertisement people that make promises that can’t be delivered by the employees in the operational area of the company.

My main thesis on this gap model is that to truly improve the quality of service and the customer experience externally, to close the expectation-perception gap, companies need to systematically study and improve the internal gaps.

Coming back to the question, in the courses we teach there are details about these issues affecting the quality of service. Courses and programs are going to talk in detail about these frameworks and what companies can do to improve the service to customers. These courses are not common in business schools.

Due to the increasing importance of providing an excellent experience to the customer, is it a trend for companies to create new job positions to focus on this area?

It is definitely possible. In many companies are interested in improving service excellence. The problem that I see it’s there’s not enough understanding yet about what service quality really means from the customer’s perspective. And what needs to occur inside the company to produce those external market efficiencies.

There’s the interest, and the investment in resources, but customers actually don’t see a lot of change. For instance, sometimes you go to a hotel and there are nine pillows on the bed, but the employee calls you later than the hour you asked to be woken up in the morning.

There’s a lot of competitive imitation. In the moment a company offers a new service every other company tries to do the same.

Still few companies appoint someone to take care of the service to the customer.

In terms of the use of technology and all social media, a study conducted by Duke University’s faculty found that among CMOs there’s no certainty about the real impact of social media investments on the performance of the business. What are your thoughts about it?

These are very interesting findings. It agrees to some of my own thinking. Many companies now are enamored with social media. Everybody talks about Twitter and there’s a lot of coverage about these new networks. Companies feel pressure to invest in this sense, creating a facebook page, a profile in other social networks. Companies in my view blindly imitate each other.

But no one has really understood the real impact of all that. My own feeling is that there’s too much hype around the influence of social media. At this stage, most companies are just imitating each other.

I recently came across the book: Contagious, by Wharton school professor Jonha Bergr where it says that much of the communication p2p occurs through word of mouth rather than through social media.

How could a startup or SME design a much better experience for the customer?

My view is that SMEs especially the ones that are starting have a great opportunity to make a big impression on customers. That is because they don’t have all the infrastructural problems, or corporate cultural problems that these big organizations have.

I think the gaps are likely to be smaller in the SMEs because the organization itself is smaller.

There’s opportunity for better communication and the coordination among functional areas.

With the economic growth perceived in several Latin American countries, there has been an increasing relationship and investment from US companies there, and Latin companies in the USA. From your perspective, what are the most important difference you notice between the way Latinos provide services and the way North Americans do so? What should these companies, from each side, consider in order to satisfy customers from a diverse cultural background?

I get asked that question ofte, about country-to-country differences in terms of service excellence.

I start answering this question by saying that the basics are the same. In my view, regardless of the country, the basics don’t change. It is important to realize the specifics associated with the basic categories, such as understanding the market place through research and observation. What might work in a country does not necessarily work as effectively in another country. A good understanding of different expectations of customers is important.

Another option for companies moving into foreign countries is to feel they can make some local partners. Local companies will be more aware about expectations and cultural expectations. Create local partnerships can be a way to quickly get the understanding of the needs and expectations of the new market.

In conclusion, companies across the board are focusing on service because it’s what can distinguish them from the competition. It is difficult to achieve competitive advantage based only on product. There are so many brands available that it’s difficult to achieve advantage based only on the service or the product. Likewise, you can’t compete on price, because it’s something that can be easily match. Whereas excellence service is something that can bring the opportunity, it’s a way to achieve sustainable competitive advantage. It may require initial investments, but it will be worthwhile.

John Fernandes: Latin America must globalize the quality of its education

This is the unedited English version of the interview to John Fernandes, CEO of AACSB (The Association to Advance Collegiate Schools of Business), originally published by AméricaEconomía on October 21st, 2013.

John Fernandes, CEO at AACSB

As CEO of AACSB, John Fernandes shared his take away and expectations about some of the most important issues discussed at the Conferece of the Latin American and Caribbean Advisory Council (LAAC), that was celebrated in Mexico on August, 2013.

LAAC’s main goal is to support Latin American Business Schools, not only those accredited by the AACSB but the total amount of the almost 2000 schools offering programs in the region. The LAAC will gather again this November 2014 in Lima, Peru and later in Buenos Aires, Argentina, in June 2014.

What were the main voices represented at the LAAC Conference in Mexico, and what were the main debated issues?

As we discuss AACSB’s inaugural Latin American and Caribbean Annual Conference (LAAC) held in August, I will be referencing the top business schools across all of Latin American and the Caribbean coming together as one. Such schools are institutions that are financially equipped, and sufficiently developed to be able to join the best-of-the best in conversation. Unfortunately, there are still many schools in Latin America that are not familiar with AACSB, or are not at a point where they can participate in such an event.

In total, we had eleven countries represented, with more than 80 attendees – which was a great turnout, as we had counted on maybe slightly more than 70 schools represented.  So, when discussing viewpoints of attendees to this Conference, you are getting a viewpoint that is coming from the elite business schools, not necessarily those that make up the 2,300 schools across the region.

AACSB Accredited: EGADE Business School, Tec de Monterrey

EXCITING TIME IN MANAGEMENT EDUCATION

The biggest issue we discussed at the conference is that right now it is an exciting time to be a business school in Latin America.  In many countries across the region, such as Mexico, Columbia, Peru, Chile, Brazil – maybe not as much yet in the Caribbean – the economy is booming with significant growth in GDP and substantial activity of business, so there is demand for students to fill those positions. This puts business schools in a key position, as what they are doing can make significant impact on their economies.  Such an opportunity is very intrinsically rewarding and very productive for the business schools. They are training and graduating students that are immediately going into booming economies to make a difference.

Business schools across the region are excited about being in this position, and are trying to do the best they can for their students, and for business needs. At the same time they are also very concerned about their countries because they know that most are still, primarily, in the extraction business.  They want to help transition their economies to eventually become service economies, not focused chiefly on extraction (because in the long term that will start to run out).

In that, it’s very important for these schools to graduate individuals that will help build the fabric of the economy to expand past extraction to the point of providing higher level services. As leaders of the community, this is something that business schools can do, but they would have the capability of doing it much better by having a better number of academic faculty.

Let me explain what I mean by that: when you have someone from industry teaching a course, mostly what you have is a business person teaching what a student can read via a textbook, and what the individual knows hands-on from doing their job. It’s not necessarily teaching the individual how to think critically in abstract business situations or in a different point of the economy’s development.  If I’m a manager from a mining company in Peru, and am teaching a management course, I’m most likely going to focus more on the current, contextual viewpoint and convey that to students. If am an academic I would approach it from both an extraction viewpoint, as well as how it should be in a service economy or other industries. Such a narrowness in the development of students worries me, to some extent, and how that occurs in a vast majority of schools in Latin America.  However with all things said, it’s a very exciting time because business schools are graduating people right now that will make a difference from day one, and this has a significant impact on the economy.

DOCTORAL FACULTY SHORTAGE

AACSB Accredited: IAE Business School, Argentina

Another thing that comes out of the conference is that the schools are uncertain about what to do regarding the lack of PhD programs. I hear from many: “We are not growing academics;  we don’t have the funds to produce PhDs; it’s difficult to recruit faculty members from other regions to come in; our programs are mostly in Spanish so we have to recruit people that a) have their doctorate, and b) have Spanish skills”.  As a result, many are facing frustrations about finding doctoral faculty. Currently most institutions do not graduate them internally and find that it’s hard to import PhDs from other countries—such individuals that are Spanish speaking are expensive and budgets are tight, there is certainly a global shortage of doctoral faculty across the region. They are battling for very few spots, and unless a school is well endowed financially, it’s very tough to address the problems that we’ve discussed.

There are many that attended the LAAC conference that want to seek the AACSB accreditation, but yet in doing so they know they will have to build their academic faculty and better balance the academic versus practicing ratios.  It’s not that practicing faculties are bad, they are valuable, but you can’t have all practicing part-time faculty filling the roster of professorships. To build a good business school, institutions must have  both academic faculty and practicing faculty, (mostly full-time, some part time), and that’s a big challenge for many of the schools in the region.

So, these are exciting times due to the growth of the economy, and because of the number of higher-education aged students in Latin America is quite high. Comparatively, (and unfortunately), this level is at a bit of a decline in Western Europe and is pretty much flat in the USA (maybe with a little bit increase).  But Latin America and the Caribbean,  the higher-education aged students are keeping a good pace with those in Asia, the Middle East and Africa. So there’s a big pool of students to pull from, which it is exciting for the schools too.

But then they sit must back because they “don’t have the faculty”. It’s challenging for them yet exciting all at the same time.

Among the topics of debate at the Conference there was “the evolving trends on management education”. How updated is the academic curricula at Latin American B-Schools to fit the new 2013 standards?

The new 2013 standards that were approved by the AACSB membership are very good for Latin America.  Let me provide a few examples:

For the first time, executive education programs are part of the standards.  Executive education is very important in Latin America, and this inclusion will help to both grow and improve quality of exec ed programs at the global level.

Another very important and relevant change, is how the standards approach the appropriate  composition of a “leader”.  We have always said that “leaders” should be ethical, but now we say they should be ethical but also socially responsible in their communities. In society today, it is important that leaders and their companies get back to the community. Thoroughly we are saying that leaders should make sure that they are ethical and sustainable, that their organization is ethical and sustainable, and that each are not doing short-term “fixes” that would hurt in the long run. Also, that business must consider ways to develop, or improve, their environmental sustainability practices.

AACSB Accredited: Fundação Getulio Vargas, Brazil

Through the 2013 Standards, AACSB is saying that this is what we, (business schools and society as a whole), need to emphasize to develop leaders, to make sure they have the necessary fabrics in them from their first day on the job. Many individuals are dealing with governments and sometimes practices that don’t operate in accordance with these traits of a leader, or at least not consistently. Our membership felt that it was very important that these be included in in the new standards, to help institutions change their curriculum to better build responsible leaders.

There is also an emphasis on strong teaching, and an emphasis of the standard on assuring student learning through program improvements that assurance of learning practices. The whole umbrella of the standards says that you should follow your mission, be very clear about your mission and seek to be innovative, and be engaged with business practice – which many already are today.

The point is that the standards are going to a direction that is helpful for Latin American Business Schools. The only downside is that there is still a large requirement of doctoral faculty, and that’s where the standards hurt. The standards also have intellectual contribution requirements, but currently most of the faculty within the region are teaching part-time, and they not have the opportunity to provide such items. These are generally research, papers, or other innovative techniques that come out of a business school, most often as a product of a full-time faculty.

By and large, the schools in Latin America that embrace the new standards will find them very helpful. The only one that we are still seeking answers for right now is the faculty challenge—which in the short run will probably deter many schools from seeking AACSB Accreditation.

As an organization, we have to figure out how this can work – how can we modify the faculty requirement so we can get more schools from Latin America (or other emerging economies) more involved. It is a difficult question to answer, because accreditation needs to be fair to all. As an organization, we have to think about whether we should develop something else that would be very similar to accreditation, but maybe not at the same level of faculty requirements.

Can we expect a greater engagement of the AACSB with Latin American B-Schools?  In case there will be, will the AACSB take a more “hands-on” role helping B-Schools to improve the quality of the education offered?

Among one of our initiatives for the region has been the development of AACSB’s Latin American and Caribbean Advisory (LAAC) Council.  The LAAC Council was established with the goal of improving AACSB’s support to those within management education in Latin America and the Caribbean regions.  We realized that AACSB has many top schools that are part of our accreditation family, but what about the other 2,200 or so that could benefit from our membership services, thought leadership initiatives, and professional development opportunities?

Today, AACSB is set up better to help schools that have more balanced faculties, more balance of full-time/part-time students, or schools with a rich or historic academic tradition.  What we’ve found is that most business schools in Latin America have more of a practice relationship, where business people tend to be part-time students. Aside from the 16 accredited (and approximate 8 to 10 in process), most business schools within the greater region do not “look” like AASCB schools worldwide in terms of  curriculum and structure. So it is up to AACSB to establish how we can better work with this large number of schools, to find out what they need, and determine how we might be able to help them.

AACSB Accredited: Universidad Adolfo Ibáñez, Chile

We realize that most schools cannot just change their structure because we come in and ask them to have 40% scholarly academics and 10% practice academic faculty, or tell them you must have scholarly practitioners, etc… I anticipate that most would answer they are lucky to have faculty. So as an organization serving management education worldwide, we need to find out how we can structure our services to help this vast majority of schools. Most likely, it will be different in many ways than the services we provide to the more developed nations’ school faculties.

There’s a lot of listening going on now. We are making great efforts to encourage schools to become members of AACSB. We are doing more things in Spanish for this demographic—items such as a website, or even more articles printed in Spanish.  This August we offered the inaugural Latin American and Caribbean Conference, which is going to be every year. We are also doing seminars in Spanish about business accreditation and about improving teaching effectiveness… The intent is to do a lot more professional development services like those as well.  I’m excited to see the results of the work that is being put into place by the LAAC Advisory Council.  Lead by Fernando Antonio D’Alessio, director general of CENTRUM Catolica, the Council has already provided an immense amount of insight and guidance, and the LAAC conference and seminar serve as a small sample of what we would like to do to help schools.

But in the long run, AACSB still has an obstacle it must overcome in its efforts to help schools across the region. We have an accreditation model that was built for a very mature business school market, but most of Latin American business schools are young, and are practitioner taught.  As an organization we have to find a way to help schools to continuously improve, but at the same time respond to their faculties’ makeup.

Currently AACSB does not have quality insurance product (or even certification) that works for schools that are more practitioner taught. Part of our job for the next couple of years will be in studying schools – not just those in Latin America and the Caribbean, but many countries in Asia and Africa – that do not have the faculties to participate in or benefit from AACSB Accreditation.

Pankaj Ghemawat, author of World 3.0 and professor of Global strategy at IESE, has stated that Business Schools have a crucial role in economic development and thus societal progress, because they are directly involved with the education of the business sector professionals. He points to the fact that there are only a limited number of schools –those in the rankings- offering the kind of state-of-the-art education that students need, and most of poor countries can’t offer it to its population, so the poverty cycle repeats itself. What do you think it’s the current situation in this sense in Latin American countries? How could, or what do you think the AACSB could do to support the quality of business education in Latin American, improving or balancing its standards?

We as an organization need to be much better at serving emerging economies. It is incredible the shifts that are occurring in both the economic cloud and also student volume cloud that is coming from emerging economies. It is much greater than in some developed economies.

AACSB is built out of a “developed nation” status, and as a result, it is causing us to retool our own models so that we are relevant with emerging economies’ business schools. This is very important with the organization’s mission long term. As for the Latin America and Caribbean initiatives, such as the LAAC Council, we are focusing on Latin America, but a lot of what we are learning there will help us worldwide.

The Council is made of deans from eight or nine of the top schools of the region. Unfortunately this small number doesn’t represent the vast majority of the schools, but it is a start.  But, the leaders of the Council operate in the environments that all of the Latin American or Caribbean schools are in. So they understand the needs at those schools that are not with AACSB, and thus far has done a good job. A strategic plan has been approved by the board, and the Council will meet two more times within the 13-14 academic year – once in Lima, Peru, in November 2013 and then in Buenos Aires, Argentina, at the end of June 2014.

The Council is doing well, and there’s a lot to learn from emerging economies’ business schools. Such institutions are right on the front lines producing students, and are looking at innovations in a very open business environment.  I think developed countries will soon learn a lot from emerging economies about the innovations they are making, because their economies are a lot more flexible right now. It encourages doing things differently as opposed to “this works so let’s keep doing it this way”. It’s an exciting time for business, and for business schools in Latin America.

There is competition between Business Schools in Latin America, while the context gets more globalized with increasing internationalization. From the time you shared with deans from the top business schools, would you expect to see more collaboration with each other, or are they more inclined to compete with each other? Can we expect more faculty exchange or joint programs?

As it relates to collaboration, the best schools in Latin America have strong international collaborations outside of their regions. But what I’ve sensed, within their local region, it is different. The August LAAC Conference was held in Mexico City.  The city itself has three world class business schools –ITAM, Ipade and Egade.  As a part of the conference, we invited the deans from each of the local schools to a dinner to speak with our Council’s members. I think there’s a high likelihood that this dinner was the first time most of them had ever have gotten together. And I think that’s the case in most every Latin American country—the top business schools know who each other are, but they do not usually have the opportunity nor make an opportunity talk to each other.

AACSB Accredited: Universidad de Los Andes, Colombia

So one of the benefits of the AACSB is, (and I’m not making a sales pitch!), is that we provide a platform for them to all come together. There they start talking,  find out what each other do, and start expanding campuses…they talk a mile a minute with each other and you can see that they love it. I think these schools have very strong collaborations with international partners and intercontinental partners, but within their country or region, there are still very few acts of collaboration. What they tend to do is decentralize their campuses so they can serve multiple regions as opposed to establishing collaborations locally. That’s very expensive, to move faculty.

One of the benefits that AACSB will have throughout this process is our power to convene, to bring people together. The Latin American Council has brought together LA schools for the last years. But now through our new efforts, we will be able to bring together even more schools, which will encourage a much higher level of communications, cooperation, and potential collaborations for the future.

AACSB has been around for almost 100 years here in the USA, and as a result, we have always served that role. Through our outreach efforts we have served that role in Europe for the past 15 years, and Asia for the past 5 years. But we haven’t done too much of this in Latin America. But now it is time to begin to bring schools together, which in the end is going to help them.

Corporate voices keep repeating that there’s a talent gap – mostly in the Centro America region but not exclusively- and it is hard to find and retain high skilled workers, even for administrative positions, marketing, finance, etc. What are business schools doing to help tackling this need? Was it a topic discussed at the Conference?

This is not only happening in Latin America, but it’s happening in emerging economies all over the world. Big multinational corporations enter in with a sophisticated level of management and they hire locally. I hear CEOs saying, half the people we have to fire, and the other half we have to completely retrain them. We are not getting what we need out of the schools.

Then they look at their practices and realize none of the schools that they are working with or have recruited from are accredited. This means that nobody is reviewing the institution to make sure the business program is providing  a state of the art education, or even simply meeting learning goals… so of course that is going to happen.

AACSB Accredited: INCAE, Costa Rica

The schools that met at our conference all know this and are trying to produce better and better students. Unfortunately, that’s only 60 or 70 schools that attended, plus the 16 that are accredited. This is going to keep happening, as there are more than 2,200 schools in the region. Business is going to keep having situations where they hire graduates and they are going to be disappointed,  and they will have to retrain or replace. This cycle will not get any better until more schools get serious about improving their quality. And what forces them to improve quality is an external review process, such as the accreditation process. This requires schools to be reviewed against a set of standards every 5 years, and benchmarked against other schools in the institution’s peer group … and that’s globally.

Another problem that corporations have in all emerging economies is that they all want the same quality of graduates. But just as I described, business schools that are not focused on improving their quality, produce an uneven quality of graduates. This is a problem, but it’s yet to be fixed. And in circumstances such as the Latin America region, having less than 1% of schools accredited is very low. It just can’t continue to be that way.

Anderson: why do we need the multicultural executive?

This is the original, unedited version, of the interview to University of Miami’s Business School’s Dean Eugene W. Anderson, published in Spanish on AmericaEconomia on September 8th, 2013. The interview covers the new “Miami Executive MBA for the Americas” program, which aims to be the new flagship program of UM B-School.

Eugene W. Anderson: UM Business School Dean

Among so many MBA programs out there, what would make this program relevant for Latin American executives who aim for a second time in academia to update their skills and knowledge? What are some distinctive features of this program “Miami Executive MBA for the Americas”?

We are hoping that this program is that program. The one program Latin American executives who want to go back to school want to be a part of. As far as I know, it is really going to be the only program out there that has uniquely taken as its focus doing business in Latin America, in the Americas. I think it’s such an important high growth area of the world.

Then most MBA programs have a very traditional structure and are organized around specific functional areas like accounting, finances, and marketing. And most MBA programs are using the same text books and cases, which are all very are all very US based, US centric. This programs aims to be very different. Instead of having a functional structure, we are going to try to focus on the issues that are important to managers and organizations doing business in the Americas. It’s about multicultural leadership, it’s about entrepreneurship, and innovation, managing international and global operations.

Attacking anyone of those individual areas, doesn’t fit neatly into the disciplinary box of any particular functional area, real business problems, real business issues are multifunctional, cross-functional. So we are designing the program around those issues and specifically around issues that are important to folks working in Latin America. We are going to provide that as architecture, and then the students are going to be bringing current problems and issues they are facing in their businesses into the classroom. In fact, they are going to create the cases to be very current and also based on the geographies they work on and are doing business in… instead of analyzing ten-year-old cases that are based in Iowa or something like that. In that regard we think that we are taking a very different and unique approach.

I think the result would be a really terrific program for anybody who wants to up their game and learn more about doing business in Latin America. And also, there’s not only the intellectual content, but the opportunity of peer interaction, the friendships and networks that will be built in the program.

We are hoping that people graduate from this program and walk the stage feeling that they are not only prepared to be great managers and leaders of their companies in Latin America, but also have a much broader view of the different cultures that are there, and of themselves, so they will feel more multicultural. And also they can feel they have created new networks of colleagues across many different countries, because we are hoping to draw students from Mexico, Colombia, Panama, Brazil, some of the Caribbean and certainly some from South Florida. We are hoping we will help these people to develop a powerful network which will benefit their career on the long term as well.

You just mentioned the program would use cases brought to the class by the students, considering their experiences, what exactly does it mean?

We hope that they will bring current business issues and things they are facing. For instance, maybe some of them will be working for a family business in Colombia which is seeking to entering Peru.

In terms of methodology, how are the professors going to be prepared for the challenge, considering they will have less time to prepare for the analysis of the cases?

First, we are going to be using our faculty that are most seasoned. They are not only used to working with executives but also are used to work in these markets so they will have a deep understanding when the issues will come in.

The other thing that will be asked from the faculty is that instead of being the proverbial sage on a stage where the professor knows the case, what questions to ask and what kind of answers will get, the faculty members will be more of the guide by the side. They will be working with the students to help them formulate the right questions to ask, to help them think about how they want to answer those questions. So everyone together can learn and discover what the most current issues are out there and what the best approaches are to try to address them successfully.

My hope is the faculty will be learning a lot in this program from the students too. That should be because when you have seasoned executives, people who have been out for 10, 15 years, they have a lot to offer when they come in the classroom. If you are using a traditional teaching model, where the students are listening to the faculty member who knows everything, walks in to kind of to project to the audience the knowledge that they received, that may work ok with a classroom of undergrads, but if you have a group of 30 or 40 executives with 10 to 15 years of experience, then you are really missing out by not tapping in all that experience and knowledge that is sitting there in front of you. If you have a classroom with 40 people with 15 years of experience, you have 600 years of business experience in front of you. If you stand there and lecture them with power point slides you are not going to tap in that knowledge and experience in the way that you would learn as a faculty member. But more importantly, how the other folks on the room are going to learn from each other, we expect a lot of peer to peer learning in this program.

Who are the potential students? Will the program target some specific kind of executive, with expertise in certain areas or specific time of experience on the job?

We rather like to stay away from saying specific numbers or thresholds for the folks. We rather have been thinking how it would be the ideal professional, man or woman, for this program. How he or she would be like.

If you think in admission on the individual level, we would be looking for people with really high potential, with a track record of success, probably a record of progressive management responsibility.

But also their colleagues and their superiors, as well as to our interview, we determine how high potential they are for senior level positions. Our ideal folks would be the people that their organizations view as their future leaders. That’s kind of what we are looking for at the individual level, so whether or not the person has 8 years experience or 15 years experience, that can probably vary a lot from person to person.

There’s other thing we are going to be looking for when it comes to admission, it is the creation of a group. If we have 25 managers from Bogota in the classroom that’s going to make the conversation different than if we have 5 from Bogota, and 5 from Panama city, and a group from Lima, and somebody else from Puerto Rico… We want to have a real diversity of perspectives in the classroom. We like to think that we are not only looking for people that have the ability to learn, which is kind of the first part, that they demonstrate they are high potential people, we are also looking for the right group of people that have the ability to teach, because we want them to be able to teach each other in this program.

It is likely that the program will gather two kinds of students, some will come from the USA with intentions to go to work in Latin America, while others will come from Latin America with the interest of learning about other Latin American countries but also about the USA. From the program’s perspective, how will be tackled these two specific needs from both subgroups?

Those are exactly the two groups that we want in this program. We think we have a lot to teach to each other, one group about learning how to do business in Latin America, and the other group learning about doing business here in the US, and both getting an opportunity to develop networks in places where they want to go to.

We think the program is going to have the most value if we get a good representation from both these groups. Now, what are the big themes of the programs? And how can these groups take advantage of the program?

One of the big themes of the program is multicultural leadership, so certainly we are going to want people to learn about, for example, what the cultural business practices are. For instance, some of the people who can be 4^th generation US citizens, they still have a lot to learn, even if they grew up here in Miami which is very multicultural, they still have a lot to learn about doing business, or the cultural side of doing business that is interacting with folks in Lima, Santiago, or Sao Paulo, and how these places are different from each other.

Something that inspired this program was listening to businessmen who have dealt with these differences expressing that they wish to have had better preparation over the cultural differences, in the societies, in the way business are conducted in these different countries… because one would be not only living and managing an organization in a foreign country, but overseeing the entire let’s say Andean operation, which includes countries like Ecuador, Colombia, Peru and Chile.

I think that’s a very important goal we have for people who are coming from the US to learn about Latin American context, and vice versa for managers from Latin America to learn about US culture. And hopefully we will learn from each other, because one thing I hear from talking to business leaders in Latin American countries when I have visited Bogota, Sao Paulo or Lima is that they want to do with their management talent is help people that are very focused on their own country to learn more how to be multicultural within Latin America. The Brazilians have grown up learning about Brazil and doing business in Brazil, but more and more if they want to take the next step and become multinational –and often the first step in becoming multinational is to enter a neighboring country’s market- so they need to learn how to take those steps.

At this point, is there any definition or particular interest regarding a particular country, or even city, and also industries, developing in Latin America that you consider as indispensable to be addressed in the program?

In that sense, we really like to make sure we gather a good mix of people coming from the different major business centers in Latin America. Ideally we would like to have a good representation from places like Bogota, Lima, Panama City… those would be very important for us.

In terms of industries and verticals, considering we are in Miami and what the city has become, I’m sure there will be a strong financial services aspect to the program. There are so many financial services that have been based here for the Latin American operations. I don’t think that it will be limited to that. I expect we will have a good representation from the many other kinds of services and consumer products companies, the healthcare companies, and so on that have put their Latin American headquarters here in Miami.

The other group that is not precisely a vertical, but we would also like to have a strong representation of in the program, it’s people coming from family businesses, all the way across the board, because that’s such an important part of the business world in Latin America. So we want people that are into family business and people that are not, especially from the US side, they need to learn what all that is about in Latin America.

Will the program somehow address the kind of particularities that can affect the executive’s performance which are not part of the office work, but are embedded in the context?

Absolutely, we really want to focus on not just navigating new cultures, but different government rules, regulations… the different kind of socioeconomic, legal, political things that you come across. That is a very important part of it.

We will tackle topics related to international contract law and compliance, which is a big issue especially in healthcare and in some other financial services as well. One of the points of focusing on making sure we are getting good representation from some of the major business centers in Latin America, it is to have people in the class who can share with people interested in moving to Sao Paulo or Lima some of the challenges that they will face not only in the business sense, but also on a personal level as well.

Are there any plans to foster the participation of students from Latin American countries with scholarships or grants of some kind?

Yes, one of the things we would like to offer for students who are really great is that there could be chances of financial aid. We could certainly consider merit scholarships. We have started initial conversations, still when we are a year away from launch, but we are talking with corporations who might be willing to help support this.

As you can imagine there is already a lot of companies that are multinationals, either coming from Latin America and are based here, or multinationals from elsewhere that try to go to Latin America to have operations there. This could be a very attractive program to them to help develop talent that is capable to be fluid and moving back and forth between these two different worlds.

 The program will blend the on-campus experience with the online learning format. Even today, there are not many Business Schools adopting the online learning variant. Why has UM decided to adopt it? What are the expectations in terms of potential challenges and benefits?

There are an increasing number of schools which are adopting online variants of learning formats. Maybe they are not going fully online, but there is an increasing number offering hybrid formats like we are doing. Some of them are quite prestigious schools like Duke and the University of Michigan, which have hybrid programs for 10 years now.

I think that it’s a growing trend in business education, and I think there are some great benefits to doing things at a distance. Part of it is that there’s so much work these days is done virtually by people working at a distance in virtual teams, that I think it’s essential for business education to include that in the experience we are offering to our students, so they can learn more about virtual collaboration and how it works.

I think it’s an important benefit of distant learning. I also think that online has some real strength, you get great consistency because people can go at their own pace. But also if set it up right they can have great collaborative experiences within their smaller groups, and working with the professor in small groups that they will never get in a classroom with 50 other people.

For instance, in a discussion around a certain issue, in the classroom would only have the chance to ask a limited number of people in an hour, but if you do it on an online environment where the professor can connect with 8 or 10 other people, everybody better get prepared because everybody is going to get the chance to talk and be called by the professor and will have to interact with the other folks.

Then I believe there can be real benefits to the online environment, though I don’t think online has gotten to the point where it can fully replace the richness of the experience of bringing people together in a face to face interactions do. That’s why the blend of the experiences is very important for us.

That’s from a learning perspective. The other I think importance thing about a hybrid format in today’s world it’s that gives people flexibility in their very busy lives. It’s a very fast paced, interconnected world that we are living right now. If you are in a program where you are expected to come to campus every two weeks for a couple of days, it’s more restrictive considering both your professional and your personal family time than a program like this where your commitment is to come once every two months. It helps you to balance all the competing demands you have at work and hopefully help people achieve a work-life balance while they are going through one of these programs.