Profitable advice to leaders
Academic says top company managers can help solve many of the world's problems and make money
For Robert Joss, dean of Stanford Graduate School of Business, the solution to many of the world's problems lies within senior management of major organisations.
His rationale is this: businesses exist in context. If the social and physical environment is in disarray, then economic processes that lubricate business transactions become difficult to maintain and businesses themselves suffer.
He believes the world's problems are so big they will only be solved through massive groups of people working together.
As a result, he expects nothing less from future captains of industry than an ability to eliminate poverty, pollution, infectious diseases and climate change.
Where else, he asked, would people find the best managers who could apply their skills to address these worldly problems, but in profit-making companies?
Management, Dr Joss believes, will not just deliver stellar corporate earnings, it is also the key for a better tomorrow.
'These big problems [of today] will only be solved through the efforts of managed organisations, so bringing the knowledge and expertise of management to be part of the solution is essential. It may or may not be the case that [particular] businesses have an important role in a particular problem - but it is most definitely the case that management will have a key role in all of them,' he said.
Speaking in Hong Kong last month after delivering a speech entitled 'The Stanford Way: Turning the Problems of the 21st Century into Entrepreneurial Opportunities', Dr Joss also noted that the purpose of businesses was to meet market needs for solving problems that society was willing to pay for, and issues such as global warming topped everyone's agenda today.But before these major issues can be solved, management needs to be able to operate successfully at the very heart of the organisation, and the challenge of solving global problems can only be met when the fundamentals of good management are in place.
It is only through managers or leaders of an organisation that we will have the ability to 'turn ideas into real beneficial action'.
'Good management guides the organisation towards realisation of a sound mission and accomplishment of its goals on a sustainable basis. Good management creates and sustains value.
'Bad management takes the organisation in the wrong direction, destroys value, and leads to lost jobs, lost opportunities, lost savings, and lost value,' he said.
And why is bad management such a problem? Dr Joss explained that 100 years ago most people worked on farms or were part of a small family-run business. Graduate management education a century ago was a virgin concept, and was not needed in the way it is today.
However, nowadays, according to Dr Joss, everything in society is managed by organisations, and the failure of organisations to work well or perform well is an enormous obstacle.
'When they work well, our standard and quality of living improves, but when they don't work well, people get hurt, lose their jobs and their savings. Just look at Bear Stearns and Enron,' he said.
According to the dean, the hardest skill to achieve is the leadership of people, and everything that goes into managing people.
He said: 'The selection, the development of team work, the giving of feedback, the growth of people are the hardest things to achieve because all people are different; it's not a technical problem to be solved. It takes a lot of emotional intelligence, and that's a hard thing for people to develop. It's much easier to develop technical and cognitive skills.'
The complexity of managing a successful team is further increased by a staff member's motivation, the team's chemistry and how each member with a different cultural background will react to different situations. He also explained the necessity to work within a team in today's business world had triggered many education systems to involve more students in group and team-based projects, which would better prepare the students for the workforce.
For the entrepreneur, Dr Joss said the knowledge of how markets worked, how firms competed, how operations within the firm were structured, how you combined physical, financial and human resources to get something done, and how people behaved were key elements in creating a successful business.
However, he stressed the importance of knowing how to apply these knowledge components into real-life business situations. 'I'd hate to try [to do] business without accounting or finance [knowledge], or some background in operations or marketing. There's a lot to know, but then they are totally useless unless you know how to apply it,' Dr Joss said.
'So much of the challenges now in education are how do you bring an idea into actual application? Academics are all about ideas, creating and inventing new knowledge. But ideas by themselves are not terribly helpful.'
He gave the example of a newly discovered vaccine, which wouldn't be enough of an achievement without proper distribution, mass production, operations and cost.
He believes the technical challenges in producing a successful organisation involve having a clear business strategy, a competitive product, efficient supply chains, and balanced finances.
However, while these challenges were complex, Dr Joss said that 'getting people to work well together is undoubtedly the most difficult thing and that's not something you can teach in school'.
The keys to a profitable, thriving company are based on good managers. 'Ultimately, we're talking about responsibility for the performance of a firm. And the managers are the people responsible. They need to feel it, accept it and be responsible for delivering it, often it's not just one person but a team.'