‘Davos Man and his Defects’ Schumpeter column, Economist, 26th January 2013

Ben Crowley2 Blogs Leave a Comment

This article is typical of what the writer of the Schumpeter column does best; it is concise, insightful and topical.  It uses the annual talking shop of the world’s leading politicians and business people – the World Economic Forum at Davos – to make some penetrating points about global leadership and business education.  He (or she?) starts by quoting the standard cliché of this year’s forum, the need to provide ‘Global Leadership’ which must be ‘mission led and principle driven’.

There are examples of the way in which Business Schools from various countries in the world are climbing over each other to jump on the global leadership bandwagon, each claiming to be the most international. INSEAD – based in France – pretentiously calls itself the ‘Business School of the World’ and proves it by having schools in the Middle East and Asia.  The Business School at Duke University in North Carolina – hardly the place you would expect to see global perspectives – can make a similar claim because it has six overseas campuses, though the size and quality are not specified. 

It is interesting that these schools seem to believe that the number of overseas locations is a key factor in globalisation when the development of virtual learning methods makes this less relevant by the year.  One also wonders about the nationalities of the faculty, which is usually a better guide to global perspectives.  French or American professors will say much the same things wherever they are based.

The article then moves on to suggest that lack of global talent is a major factor preventing top companies from growing, particularly if that growth is sought in emerging markets.  It also makes the point that business schools have not been producing high quality executives, as measured by the incompetent and sometimes dishonest examples of performance during the financial crisis.  This has led to business leaders being seen as untrustworthy; a recent survey indicated that only 18% are trusted by the general population.

This leads Schumpeter to the conclusion that the ‘industry’ that teaches global leadership needs to be shaken up.  There is too much superficial coverage of international management that overestimates the importance of global thinking and leads to managers knowing a little about a lot of places.  The reality is that most managers need to have in-depth knowledge of the cultures they work in one at a time; otherwise they are not credible and are unaware of risks and opportunities.

Harvard Business School is tackling the problem in a different way from INSEAD and Duke.  It is adopting the more realistic and cost effective route of insisting that students spend time in different countries as part of their MBA course.  The best run companies are adopting a similar philosophy by insisting that those in senior positions have worked in several countries before appointment.  Another sign of a truly international company is that it has a number of different nationalities in the top team; this is a much more effective way of making a company truly international than sending individuals on Global Leadership courses.

The article closes with the warning that there can be too many leaders who think they are superior because they have attended such courses or have been to places like Davos.  This breeds arrogance and causes the sort of mistakes that were made during the global financial crisis.  Schumpeter closes the article by suggesting that the CEOs at Davos might be better employed listening to their customers, rather than each other.  

Read the article in full;

Leave a Reply