Front runner

AUTHOR: Helene Zampetakis   DATE: 30.11.01   ISSUE 3, 2001

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"If we’re going to transform organisations, we have to have a critical mass of people changing the corporate culture."

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Knowledge is power. But in today’s uncompromising global marketplace, power comes only with the right application of knowledge. Telecommunications player Vodafone Pacific recognised this when it went looking for a source of knowledge for its rising stars. It sought out a program that would not only offer a sound foundation in the principles of management but also the skills to effectively apply them.

Vodafone’s chief executive, Dr Brian Clark, puts it like this: “As a global organisation, Vodafone recognises the importance of leadership in achieving competitive advantage.

“We were looking for a program that could give us increased leadership capability, a group of key leaders who are significantly more committed to the business, increased cross-functional innovation and increased creativity and innovation around specific business issues.

“And we hoped to embed the learning from the program into the workplace,” Clark says.

With this in mind, Vodafone approached the AGSM to help it put together a powerful leadership program.The outcome is a customised MBA program that combines the cut and thrust of business practice with the academic rigour of a high-calibre research-based business school.

The AGSM’s corporate education unit, as the incubator for this approach, has the responsibility for managing the client relationship on the Vodafone program. Sheena Frenkel, the unit’s director, says creating a link between the formal award programs and other forms of management development meets changing market needs.

Vodafone has made a substantial investment in the initiative, this year committing up to 20 of its top-tier managers to a three-year course, with another group likely to follow in 2002.

In August, the first group of Vodafone managers took their initial bite of the program, making a five-year commitment to stay with the company.

The program, called The Leading Edge, has passed the same academic scrutiny as, and is the equivalent qualification of, the AGSM’s Executive MBA. Much of the material is the same as the EMBA, which Vodafone participants join for certain subjects. However, a substantial part of the program is designed to cater for Vodafone’s specific needs.

A series of intensive residential components encourage participants to brainstorm ideas and create solutions to problems. Participants also team up with mentors from the ranks of senior executives, and corporate coaches are provided to stimulate personal development.

The program also emphasises on-the-ground learning. From the second year, participants are encouraged to take on a global secondment by working with a supplier such as Nokia, or undertake a cross-functional project.

Program executives are drawn from New Zealand, Fiji and the Pacific, as well as Australia, which requires the initiative to incorporate some online learning via the AGSM’s dedicated Web environment.

Forward thinking
Vodafone’s program cuts to the quick of emerging trends in business education. It is highly customised, incorporates e-learning, embraces leadership development as a driving force and focuses on collective education. It also takes a long-term, relationship-based approach to the AGSM.

This approach represents a fundamental shift from traditional management learning practice, where theory ruled and course content was defined by the academic institution. Instead, companies are demanding programs that can react quickly to changes in their circumstances and be more closely aligned to their particular needs.

Globalisation, rapid changes in technology and the accelerating pace of mergers and acquisitions are driving the trend.

In a recent survey on executive education, the Financial Times disclosed a growing sophistication in corporate education requirements and demands. It also found that only 10 per cent of companies surveyed would consider cutting back on customised business school training and only then in the case of a severe economic squeeze or dissatisfaction with the program.

In Australia, customised in-house study is the biggest growth area in executive education, according to recent AGSM client research.

Globally, relationships between business and academic institutions are spreading. Business giants such as Microsoft Corp and Ford run their own universities and subcontract the teaching to educational partners. Deutsche Bank, for example, has an alliance with Babson College in the US. In Australia, the Coles Institute partners with Deakin University, although such relationships are thinner on the ground here.

As an alternative, companies like Vodafone are increasingly outsourcing their requirements to design or produce learning materials for in-house courses, provide distance education or evaluate the impact of training.

The AGSM’s dean, professor Michael Vitale, says this development will increasingly blur the boundaries between business and education.

“I believe the relationship between business schools and the marketplace is becoming closer, and both could benefit by collaborating to make research more relevant to business needs,” he says.

David Hoare, AGSM chairman and former chairman of Telstra, says companies are increasingly looking for ways to improve the leadership skills of their senior managers.

“Leadership is very important for companies that run global operations. In a time when people are looking at managing expense they will need to be more rigorous about how training at management level is carried out," Hoare says.

Customised solutions
For Vodafone, a requirement for close collaboration with the AGSM was just the first step. Initially inspired by a similar, five-year EMBA program run by Vodafone’s head office in the UK, the Australian operation identified an opportunity to add value to its own executive development program by injecting a strong dose of leadership development.

The initiative sits well with emerging trends for companies to nudge their most promising performers away from excessive reliance on formal strategy towards more individual responsibility.

Rachel Laws, Vodafone’s senior organisational development manager, says, “From our perspective, the combination [of theory with leadership training] will be incredibly powerful”.

Consequently, the customised MBA is designed to develop leadership qualities that support best practice management theory. The Leading Edge program tackles this in two ways. It teaches management skills through the AGSM modules and supports that via executive coaches from corporate education firm, Corporate Spirit.

Best practice Employees who take on executive education must be extensively supported if the organisation is to extract full value from their learning. AGSM professor of management, Roger Collins, says this support should be given before, during and after the course. Ahead of the program, the company needs to identify clear objectives that are specific to the individual’s undertaking and the organisation. Employers should offer encouragement before courses begin. Part of this is to acknowledge that at times there will be a conflict between the student’s job, study and private life. A company needs to understand that students’ workload should decrease, given that they will be spending an additional 15 to 20 hours a week studying. During the course, managers should set up regular reviews in which they debrief the student and provide further encouragement. One way of doing this is to offer students opportunities to apply their knowledge in the business environment so that they can see the immediate benefit of their learning. After the course, companies should appoint the graduate as a mentor or coach so that their learning can be passed on to peers or subordinates. “You need to reward them for making that extra effort,” says professor Collins.

It is also essential to extend these employees by giving them extra challenges such as stimulating projects. “Very often new graduates leave a company soon after they complete their course because they find that they are losing their knowledge,” says professor Collins.

Marcus Cohen, adjunct faculty at the AGSM and program leader, says the emphasis on personal development is predicted on the understanding that good management of others arises out of good self-management.

"Leaders are people who can cope with change and a turbulent environment, and who think creatively, flexibly and laterally. Leaders are people who can champion change and inspire others," he says.

"We try to differentiate between these people and those who are constrained by order and routine.

"We want the students to understand success and failure, and how organisations can turn around by having managers who let go rather than hold on."

The managerial skills component of the program aims to build on individuals' strengths and help them develop a skills set they can draw upon in any situation. This module incorporates online learning, with participants sometimes working asynchronously via the Internet. The intensive residentials employ hands-on learning techniques such as simulation games and role playing to foster personal growth.

Gai Roper, managing director of Corporate Spirit, notes that many old-school executives are extremely smart people with poor social skills. "There's a recognition now that emotional intelligence is critical in the workplace," says Roper.

"Workplaces today are much bigger, much more competitive and more alienating. There's high staff turnover, so employees are much more self-orientated.

"The focus on academic qualifications has left the development of emotional intelligence behind and some executives are almost Neanderthal socially."

Roper says that over the past five years, demand for training in personal skills has burgeoned, with client requests for coaching leaping from six times a year to three or four times a week.

That growth is reflected in a recent survey by business research firm RightD&A, which found that more than half of 34 major Australian companies across industry provide external personal coaching for executives.

Roper says: "A large part of our work involves teaching basic social skills, like greeting people and acknowledging their efforts. Evidence suggests that there's a huge return on that in terms of increased productivity and motivation."
The overriding message is that managers need first to change themselves. Those changes then filter down the organisation to transform the corporate culture.

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We are looking for a program that could give us increased leadership capability.

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Vodafone CEO Dr Brian Clark.

Collective knowledge
In its bid to invigorate its organisation through the program, Vodafone has also recognised the compound value of educating its high performers collectively.

Laws says Vodafone set out to develop a group of people as a cohort which would ultimately be able to address issues pertinent to the company’s operations in the region. The objective fits in with current thinking on executive education.

Until recently, most tertiary education has focused on the individual, says AGSM professor of management, Roger Collins. That emphasis is now changing.

“If we’re going to transform organisations, we have to have a critical mass of people changing the corporate culture. We have to move to collective learning.

“That enables you to transfer knowledge to the work environment so that even if people leave, the knowledge remains within the organisation.”

Professor Collins says another trend is to move beyond one-off degrees to life-long learning for knowledge workers. Indeed, Vodafone’s objective in committing its senior staff to a three-year course was to embed learning.

As Vodafone sees it, longer programs give participants greater opportunity to apply their knowledge and help them become more committed to the organization. This also helps address critical issues of staff retention in an industry where the skills shortfall is around 30,000 people, according to the industry-backed IT&T Skills Exchange.

Chief executive Brian Clark notes: “The telecommunications sector is highly competitive, and Vodafone faces the same issues of attraction and retention as do many other information technology and communications organisations.

“We recognise that the market for talent is highly competitive and aim to attract and retain people by providing an environment in which they can make a real contribution to the business whilst, at the same time, developing their skills and broadening their exposure and experience.”

The Leading Edge participant Jonathan Shinn believes the program will provide “the broad business framework which will assist my move to executive leadership”.

Another participant, Adam Sandiford, notes the AGSM is “paramount for my career development and personal credibility with employers of choice, like Vodafone”.

“Integrating the MBA with a highly focused internal leadership program completes the cycle.

“As a participant in the program you are not just a student doing assignments based on the company in which you work; you are an integral part of a team using the latest management principles to work on projects internally to effect change.

“I see this as an exciting opportunity for personal and professional growth at the highest level,” Sandiford says.

Education specialists believe that as corporate requirements for executive training and knowledge management expand, more Australian-based companies will undertake customised programs that go all the way through to an MBA.

According to professor Vitale, changing work practices will generate a trend in which students may undertake executive education courses that deliver credits that will add up to an MBA.

“The original impetus for executive education was set by market demand 20 years ago,” he says.

“We need to keep changing our approach and responding to changing needs to remain fresh and relevant.”