Singapore’s “founding father,” Lee Kuan Yew died this Sunday at the age of 91. He was a key figure in Singapore’s transition to economic hub in Asia and one of the most competitive countries in the world.

Born in Singapore to parents of Chinese origin, Lee Kuan Yew was prime minister from 1959 to 1990. He led a regime known for its tight control over social issues, but liberal economic policies, and is widely credited with turning the city-state into one of the wealthiest nations in the world.

Kuan Yew visited IESE in September of 2005. He delivered the keynote at a conference entitled “Singapore’s role in the Asian boom.” He explained that the country’s economic success was, in part, thanks to the support of U.S. multinationals like Hewlett Packard, General Electric and Texas Instruments who had established manufacturing plants in Singapore, converting it into one of the world’s biggest exporters of electronic goods. And that thanks to improved education and literacy, the country’s had made the transition from noodle production in the 70s to developing biomedicine, nanotechnology, environmental technology, digital media and animation in the 21st century.

IESE would like to express sincere condolences to the family of Lee Kuan Yew and to alumni and executives living and working in Singapore.

Imagine a gourmet beer that your local supermarket doesn’t carry. You can personalize the label and purchase it online with 48-hour delivery to your doorstep. And then enjoy follow-up bottle collection service.

This is the proposal that has won a challenge posed by beer-maker Carlsberg to the second-year students of IESE’s Executive MBA (EMBA).

Each year Professor of Production, Technology and Operations Management Marc Sachon joins forces with a renowned international company to design a project for the Operations Management course. The idea is to give students a chance to “apply the knowledge they have acquired to a real-life, specific challenge that a company is facing,” he says.

Refreshing the Customers Other Beers (or Channels) Can’t Reach

Carlsberg’s challenge to EMBAs this year stems from the company’s goal of opening a new line of business in the United Kingdom consisting of direct online sales. Two requirements were stipulated: the proposal had to be consistent with the brand and with company strategy and it had to be feasible.

Carlsberg already has 500 brands, 16 of which it sells in the UK through traditional channels—supermarkets, bars and restaurants. The EMBA teams had a clear directive: proposals could not cannibalize Carslberg’s existing market by offering the same product online. Instead, Carlsberg wants to reach new customers – people who are not already buying Carlsberg beer through traditional means.

Knowing What the Customer Wants … Probably

“We did market research on the reasons why each customer segment buys beer online. This was the key when it came down to choosing from among the wide range of value propositions that we were considering. And we learned a valuable lesson: it’s better to ask what the customer wants instead of making assumptions,” says group member Leticia Pelizán.

Once they set aside their preconceived notions and listened to the needs of real people in the UK, the group discovered that the age 30+ market sector was most interested in the idea.

In terms of logistics, the group proposed using only part of Carlsberg’s infrastructure in the UK, which would be decided based on the country’s population and the number of people likely to buy the product today, according to survey results.

This would mean a very low initial fixed capital investment and few operational expenses. A flexible way to develop a new line of business, because if it didn’t work, the financial risk would be low.

The project not only contemplated the launch of this new line, but also two other stages if the business grew. In the second phase, existing Carlsberg warehouses would be incorporated, but with in-house couriers to make the final stretch from the warehouse to the customer’s home. In the third phrase, warehouses would be built to handle online orders. The warehouses would collaborate with couriers for the final delivery to customers.

According to group members, what tipped the balance in favor of the winning proposal was its “realism, its easy implementation, and the low risk that Carlsberg would face. The value proposition fits perfectly with the strategic plan of the brand: to offer ‘something more than beer,’ and do so in a sustainable way.”

Standing Out From the Rest

The ability to monitor what takes place on the online sales platform and the inclusion of a user comment area were other distinctive features of the winning proposal.

Another aspect that made this group stand out with respect to the competing groups was their analysis of the tax implications of importing the beer to the UK. This factor was on Carlsberg’s radar due to the high import taxes that the company pays in the UK.

“It was a real-world project that Carlsberg was working on. This added the pressure of being able to contribute something tangible to the company,” says Pau Llardén. And not only that: none of the group members had experience in the food and beverage industry.

The Dream Team

“With this project, participants fine tune their teamwork skills and learn about a timely and relevant topic, like multichannel business,” notes Marc Sachon.

This group fit together like pieces of a puzzle. Team members Francesc Busquets, Guillermo Coll, Marta González, Pau Llardén, Leticia Pelizán and Marcos Pérez all come from different industries. “We distributed tasks according to the skills and motivations of each member while also building a coherent overall plan. We worked together to define our commercial and operations strategies and from that point each person contributed his or her expertise in concrete terms,” explains Leticia.

“We respect each other as people and we always tried to bring out the best in each other,” adds Marta.

Prof. Sachon is proud of the students who participate in the class each year and of the projects they develop. “All of the companies that have participated in the challenge year after year have been very satisfied with the ideas the students have presented. These are companies like BMW, Escada, Hugo Boss, Media Markt, SEAT, or Swarovski.”

One sign of satisfaction is the invitation that the winning group received from Carlsberg. They will travel to Copenhagen in April to present their proposal to the company’s senior management team.

Celebrations for the 50th anniversary of the IESE MBA continue, this time in Shanghai, China. IESE partner, the China Europe International Business School (CEIBS), hosted a special event in March for faculty and program participants, with a keynote by Professor Paddy Miller on innovation.

Prof. Miller’s session, entitled "What do HR directors miss in the drive for innovation" covered a range of topics: the evolution of MBA programs from a ‘teaching the basics’ to assuming students arrive with a solid knowledge base; the changing meaning of leadership; and a deep focus on innovation in teaching and learning.

From Knowledge to Action

Prof. Miller presented the case study method: the lynch pin of the active learning methodology deployed across the IESE MBA. Central to this action-oriented approach, he said, is the question: What would you do?

He presented a case study on BP as an example. Following a number of small-scale incidents on rigs in the mid-2000s, the U.S. government commissioned a report, which found that BP had violated international safety standards. Miller, whose research specializes in change management and leading innovation in multinationals, posed a challenge to his audience: you are the CEO of BP with 100 days to implement a strategic plan in the context of a reputation crisis. What do you do?

The session illustrated the efficacy of the case method as an innovative learning tool in identifying a broad diversity of potential strategies and leveraging the experience and insight of participants from different sectors and backgrounds.

Bracing for the Curveball

Key to understanding and developing effective leadership competencies, said Miller, is learning how to make decisions. And understanding their potential impact. He asked his audience how they, as CEO of BP, would have responded to the Deepwater Horizon oil spill in the Gulf of Mexico in April 2010. Underpinning risk assessment, analysis, communication and response strategies, he said, is a simple question: ‘what do you believe?’

The session drew animated discussion from participants, especially around the topic of the Internet and use of social media, which can fan crises in real time. "What we are teaching tomorrow’s leaders on our MBA program is that they need to grapple with decision-making in a context in which your every statement can cement in the public image and destroy your reputation – overnight."

Doing an MBA today, said Miller, is about practicing and preparing. "Tomorrow’s leaders need to be ready for whatever curveball comes their way – and there will be plenty."

Learning to See the Biggest Picture

In today’s highly complex, global business landscape, change is a certainty, said Miller. And organizations need to be aware that change management begins at the bottom. "As strategies flex and adapt, the organization needs to adapt from the bottom up," he said. Having a rounded, general management perspective of the organization – the approach taken by the IESE MBA – means being able to see your business holistically; there will always be the risk-takers, but keeping your focus on safety across your entire organization is key to navigating risks, uncertainty and change, he said.

IESE Dean, Professor Jordi Canals, closed the celebrations with a summary of the IESE MBA over the last 50 years.

Central to the program, he said, is a commitment to international experience, innovation, ideas and impact: "the impact of a business school can and should be defined in terms of its impact on its students." The enduring popularity of the IESE MBA, he said, is evidenced in its diverse and global community of past, present and future students.

Ever since helping to establish Lagos Business School in Nigeria and Strathmore Business School in Kenya, IESE has worked to encourage reciprocal knowledge-sharing and closer ties with Africa. Issue 24 of IESE Insight magazine is fruit of the latest collaborative effort.

The executive dossier was guest edited by IESE’s Lluís G. Renart and Africa Ariño, two of the driving forces behind the IESE project known as The Africa Initiative. In her article, Africa Ariño shares the collective wisdom of business leaders on the do’s and don’ts of internationalizing across the continent, based on interviews she conducted during a research sabbatical there.

Writing with Robert Mudida of Strathmore Business School, IESE’s Alejandro Lago highlights the main macroeconomic trends and presents a road map for companies planning to enter sub-Saharan African markets. Lago has been a visiting professor at Strathmore and worked as a consultant in East Africa since 2007. He is the acting director of The Africa Initiative and the academic director for IESE’s Overseas MBA Module on "Doing Business in Africa," accompanying groups of students to Strathmore where they gain on-the-ground experience interacting with Kenyan students, professors and executives, and work on consulting projects for local companies.

Franca Ovadje of Lagos Business School describes the leadership qualities needed to succeed in sub-Saharan Africa. She also reflects on whether the same principles hold true for the Millennial generation, whose shifting preferences represent the African leadership of tomorrow.

Whether you have business interests in Africa or not, the issues the authors raise are relevant for whichever market you’re in:

• the importance of digging beneath the hard numbers to get at the soft variables;
• the impact of cultural, administrative, geographic and economic distances on internationalization strategies;
• the need to adapt leadership styles for diverse contexts and different generations of workers;
• the pursuit of long-term objectives that prioritize job creation and sustainable development.

Preparedness, rapid response and community engagement are other relevant lessons, as shown in a feature on Ebola, whose spread, some say, has been facilitated by globalization. Yet it would be unfair to blame our connected world for such problems. Another article by Pankaj Ghemawat and Steven A. Altman reveals that the actual level of global connectedness is much lower than one thinks. On balance, greater trade, capital, information and people flows bring more advantages than disadvantages.

Continental Grain Company CEO Paul Fribourg makes a similar point regarding risk and volatility: these are not necessarily bad for business, he says, provided you know how to manage them well. In an exclusive interview, he stresses the importance of taking the long view – something he should know, as the sixth-generation CEO to run his 200-year-old family agribusiness and investment firm.

Elsewhere, IESE’s Evgeny Káganer envisages the need for a new organizational figure – the data experience designer – to help companies make sense of the vast amounts of personal data they are accumulating on their customers. Spotify is an example of a business that is leveraging data to create a powerful streaming music service. Yet as an IESE case study shows, Spotify may need to adjust its business model to remain viable in the face of growing competition.

Members of the Alumni Association and subscribers to IESE Insight – a quarterly research-based magazine, published in separate English and Spanish editions – can read all these articles using their membership credentials.

Those who are neither Alumni nor subscribers can access the premium content either by subscribing to the magazine or buying the articles.

The entire IESE community would like to express our profound sadness for the tragic loss of life in France yesterday.

Our prayers, thoughts and condolences go out today to families and friends of passengers on the Germanwings flight, among them an IESE alumnus. We extend our deepest sympathy to his loved ones and pray that they are able to find the fortitude and comfort that they need at this very painful time.

How do you accurately predict what price customers are prepared to pay in order to maximize both sales and margins?

Felipe Caro and David Simchi-Levi, experts in supply management, joined IESE MBA students and alumni on campus in Barcelona in March to explain how modeling and machine learning can be used to do both.

Fashioning a Global Success

Felipe Caro is associate professor of Decisions, Operations and Technology Management at UCLA Anderson School of Management. He has enjoyed a long association with Spanish-headquartered fashion multinational, Zara.

Zara’s global success stems from its leadership in innovation in the ready-to-wear sector, said Caro. One of the principal challenges the fashion retailer faces in its operations, he said, is how to optimize item pricing during sales periods – a conundrum the Inditex brand has attempted to overcome by applying powerful modeling techniques.

The Highest Possible Low Price

With markdowns, the object is to maximize margins while selling as much stock as possible. Unsold – or salvage -- stock is stripped of its branding and sold by weight to countries where Zara has no outlets, for a fraction of cost price, explained Caro.

Historically retail managers have had no fixed methodology to use with markdowns. They have had to rely on their own (sometimes limited) experience and "gut instinct" to suggest markdowns, which in turn would be prone to discussion and ratification across different levels of the organization – a time-wasteful process with unpredictable results.

In 2005 Caro began to work closely with Zara’s CFO to develop a tool that would help accomplish markdown goals – both across its own chain and external, franchise stores in any territory.

Tried and Tested, Then Rejected

Caro and his team developed a mathematical methodology that would take the guesswork out of the process, by dynamically combining demand estimation with price optimization. They tested their method it in the Republic of Ireland and Belgium – with success.

Zara immediately set about designing a usable tool for all its managers. However, they found that in many territories there was reluctance on the part of managers to deploy the new tool itself – and in some cases, shop managers were adopting a mixture of the new system and old methods.

The Human Factor

Part of the problem Caro learned was skepticism over the forecast.

"No prediction can be 100 percent, and this combined with the fact that managers were only being told how effective the tool had been in their territory at the end of the discount period meant that they were unenthusiastic about using the tool."

Zara responded by giving managers an ongoing figure for each week and enabling them to compare figures for the corresponding week in the previous year.

"It's important to understand how people think if you want them to use your model" said Caro.

Online Retail – A Multi-Billion Dollar Business

David Simchi-Levi is professor of Engineering Systems at Massachusetts Institute of Technology. His research focuses on developing and implementing robust and efficient techniques for manufacturing and supply chains.

The challenge he outlined to MBAs also related to understanding how people think and behave: specifically, how willing people are to buy goods online at an optimal price.

Simchi-Levi says that the application of machine learning can be used to not only work out the optimal price for maximum sales margins, but also to avoid endangering market share; significant news for the online retail industry, which is currently worth $300 billion, and predicted to grow at an annual 10 percent.

Real Time Retail

Online retail has the advantage over bricks-and-mortar of being able to gather and act on data in real time. But the very sophistication of these types of business, says Simchi-Levi, is also one of their biggest challenges. Sites offer daily deals and "flash sales," where prices can remain low for just 48 hours. Added to which, high demand uncertainty, short product lifecycles and retailers with limited inventory can present complex challenges in terms of supply chain, he said.

Exploration Versus Exploitation

The solution, says Simchi-Levi, is developing a "balancing act that has to trade off exploration and exploitation:" the longer the period the system has to become more accurate at predicting customer behavior, the less time it is left to actually utilize the information. And of course the opposite is true, too.

Moreover, any workable solution has to accurately predict what price the customer is willing to pay; secondly, it has to figure out how much time should that price be offered; and thirdly, the order in which the different prices should be on offer.

Working Models

Different types of retailer require different approaches, too. Simchi-Levi cited the example of Rue La La, which operates flash sales and has a severely limited inventory – products that brand-name suppliers won't allow to be sold at reduced prices after the initial offer.

In addition to maximizing returns, the business is concerned that while higher prices may result in greater profits, they might damage market share.

To address this, Simchi-Levi has combined machine learning and optimization techniques; an approach that is set to yield a 10 percent revenue increase for Rue La La with little impact on demand.

"Rue La La’s use of this new price-optimization application demonstrates how analytics can change the way a company operates. We have created a cutting-edge, demand-shaping application that has a tremendous impact on the retailer’s bottom line," said Simchi-Levi.

Felipe Caro and David Simchi-Levi were keynote speakers at the first IESE Fashion Operations Conference.

The media landscape is in continuous flux. Changing technology gives users new ways of experiencing news and other content. And while the newspaper is certainly not dead, print journalism is no longer the number one news source. But who can users trust in a world where content is more widely available – and from many more sources – than ever before?

Richard Gingras, Senior Director of News and Social Products at Google joined Bill Baker at the Global Leadership Breakfast celebrated at IESE New York earlier this month.

He discussed these issues and shared some insight into what media professionals can do to keep up with the pace of change.

Managing a Mass of Information

Today there is an unprecedented wealth of information quite literally at our fingertips. And users have a seemingly infinite selection of content and news sources to choose from.

Google’s mission, said Gingras, is to organize this mass of materials into something that is not only comprehensible, but also comprehensive. "Our primary objective is to provide users with a broad range of perspectives."

Google News is unique, he said, in that it is not a "go here" site, but rather a "go away" site. By sending its users to other news organizations around the globe, Google News promotes a diverse set of views that goes beyond mainstream sources, combining content from well-known and smaller publishers worldwide.

"This is important to the user in introducing them to different perspectives, and for publishers so that they can build audiences in this new ecosystem – we are very proud of our role in this," said Gingras.

The Internet Ecosystem: An Information Symbiosis

Gingras believes that there is a natural value exchange between the publications that produce content, and sites like Google that bring people to them.

"Any media product is a child of the distribution ecosystem that it lives in. While Google inevitably relies upon external publications to function, these publications in turn depend upon Google for outreach."

He cited a recent study, which estimates that the average visit to a news site is worth approximately 27 cents. With over 10 billion Google-referred visits per month to their websites, these publishers have the potential to make billions of dollars from their collaboration with Google, he said.

"There are real revenue values to the traffic that we send," says Gingras. At the same time however, Google’s worth depends upon the information in the ecosystem surrounding it. Google Search is only valuable if there is a vast ecosystem of quality knowledge to link to."

Who to Trust?

While the Internet represents "the first amendment brought to life in terms of open, complete and free expression," says Gingras, the multiplicity of content and content sources poses new challenges. "One thing that we lose with the Internet is the unifying characteristic of mainstream media."

Traditional news sites, publishers and journalists jostle for clicks with bloggers, corporate advocacy sites and even regular Internet users via social media platforms, said Gingras. In today’s modern media landscape, users are influenced by friends’ endorsements as well as "professional opinions."

"Given the change in the ecosystem, journalists and publishers should grapple with the question of how we can evolve the architecture of news sites to fit the modern world and build trust in reliable sources."

Gingras’ response has been to launch the Trust Project together with Sally Lehrman, a fellow at the Markkula Center for Applied Ethics. The project sets out a number of practical tactics such as mission statements from news organizations and journalist, and full disclosure of bias – or even author biographies – in news articles on the Internet.

Not only would these signals help consumers to differentiate between reliable and unreliable sources, says Gingras, but they would also help Google to pull high-value content out of the archives and into the spotlight.

The Future for Information Sharing

Gingras is "optimistic" about the future of media.

"My optimism stems from the fact that we have so many new capabilities," he says. Articles and storytelling are no longer the only way to share information. Data journalism in particular – where "traditional" journalism meets numerical data and intersects with other disciplines including investigative research and statistics – opens the doors to radical innovation, he believes.

"There is a view that the Internet is an extension of paper news. But that’s only one tiny slice of what it is," Gingras says. Businesses should look at data not just for analytics, but also as a means of creating new forms and products.

However, with change comes uncertainty. And navigating disruption means staying informed about changes. And having the dexterity to adapt when change comes.

Think Beyond the Current

"Things are changing rapidly and will continue to change. You cannot simply assume anything. Larry’s (Page) big message to us is to think 10X," said Gingras, referring to the Google CEO’s desire to create products and services "10 times better" than those of the competition.

To thrive in the rapidly changing media landscape, said Gingras, you have to "think beyond the current."

Google has developed its corporate culture with this objective in mind, he said. From its hiring processes to strategies for testing new products, the company’s modus operandi is built on promoting creativity, risk-taking, deftness and experimentation.

"A perfect corporate culture is one that has the ability to realize its imperfections and to change and adapt. You need to be nimble, fast changing, willing to take risks and to accept mistakes."

As part of its suite of executive education programs, IESE New York offers the Media AMP to executives operating in the media and entertainment spaces.

Could Japan see a return to growth in the next five years? And what would drive this growth?

These were the big questions asked by Ken Shibusawa, founding partner and director of Commons Asset Management, and CEO of Shibusawa and Company at the IESE MBA 50th anniversary celebrations in Tokyo this month.

Shibusawa gave a talk entitled: Engaging elements of humanity in capitalism for the 21st century," in which he described the emergence of a new model of capitalism more closely aligned to society’s common goals. Japan’s economic fortunes, he said, could be improved by adopting this new model – a challenge to future generations of Japanese business leaders.

2020: A Year for Change?

Japan’s so-called "lost years" – the economic downturn that began in the early 90s – could be set to come to an end in the next five years, said Shibusawa. In 2020 the Olympic Games will be coming to the country, however, he added: "it’s also the year when the baby boomer generation will be retiring, and stepping aside to make room for the next generation."

The challenge to this generation, he said, is to find a model for "sustainable growth, which has been a 'side issue' for the last 30 years – and one that will require the creation of new and different systems."

This challenge would be hard to overcome, he warned. "I have two pieces of bad news: the demographic evolution of the country hinders the creation of this sustainable economic system, and the new protagonists – who were educated and trained during the bubble – won’t have the money they would have had during the growth period."

Working Toward the Common Good

Shibusawa cited the "original values of capitalism" as key to stimulating sustainable growth: a joint commitment to company profits and to broader society benefits.

"My great grandfather was part of the early years of the Bank of Japan, and he explained that the bank was like a river of money, which flowed far enough to affect social reality. This new form of capitalism must restore ideas like this," he said. He illustrated the point by citing Nobel Prize winner, Milton Friedman: "there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game." A view shared 30 years later by economist Muhammad Yunus, Nobel Laureate of 2006, who believed that organizations have a duty to increase their contribution to society, he added.

Peeking out of the Box

Shibusawa pointed to some of the issues currently holding Japan back. Difficulties in capturing value, he said, were amongst the factors that continue to hamper growth.

"I’m an investor, and for me, investment means buying when you believe that the market price of something is lower than you believe it is worth and selling when the price is higher. But people still think that price is equivalent to value. We have an entrenched mindset that says if something is expensive it has high value – we need to change this way of thinking."

For business leaders, he said, this means leaving the comfort zone: thinking outside of the box.

"We Japanese tend to feel comfortable inside our box, where we’re born, where we grow up and work. We are convinced that only those of us inside create value and those outside are on their own."

"But from outside there’s a better perspective to see how factors like corporate social responsibility harbor great potential to create value. Just by peeking out of the box, we can easily find answers to the questions that seemed to have no solution from within it."

The Dean of IESE, Professor Jordi Canals, closed the event by summarizing the story of the IESE MBA since its inception 50 years ago. He talked about the continuing developments that nourish the MBA program, and ensure that it remains "at the forefront of innovation and internationalization" in global business education.

Celebrations will continue this year to mark the 50th anniversary of the IESE MBA all over the world. Upcoming events will be held in Singapore, Miami, New Dehli, London, Barcelona, Santiago de Chile and Sao Paulo.

The European Union is declining as an institution. It is dominated by Berlin-mandated policies and it is "not inconceivable that it will lose members."

This was the warning issued by former president of the European Commission and former prime minister of Italy, Romano Prodi, at IESE’s Barcelona campus last night.

Prodi was the keynote speaker at an event co-hosted by the Italian Chamber of Commerce and attended by key dignitaries, including Barcelona Mayor, Xavier Trias.

It’s bad news for Europe’s influence in the world and its economic performance, says Prodi. The Juncker Plan in itself is not enough to reboot growth. Europe’s economic, business and political health hinge on closer and deeper political ties – ties that only an integrated "European project" can facilitate, he said.

France, Italy and Spain should be working more closely together to preserve their mutual interests – and to create a counterweight to the political and economic influence currently wielded by Germany, he said.

"We’ve Lost Our Way"

Much has changed in Europe since 1978, when Prodi held the post of Italian Minister for Industry.

Since then, the European Union itself has transformed beyond recognition, said Prodi, expanding eastwards, tightening its mutual ties and adopting a common currency, much of which occurred under his presidency of the European Commission.

However, the European project has "lost its way," he feels, in recent years.

Looking to Berlin, Not Brussels

"China is interested in speaking to European countries – it is not interested in speaking to the European Union," said Prodi.

Europe’s decline as a cohesive economic and political entity is something he attributes to "shifting tectonic plates of political power within the institution."

At one time, the EU was what Prodi describes as a "union of minorities," with a Franco-German power base, but no single dominant country. At this stage, the UK also had a big influence on the organization, operating what he described as a "deft although sometimes opaque diplomacy."

Taken together, this "balance of forces" helped preserve a degree of plurality within Europe. But times have changed.

"Now, everyone looks to Berlin, not Brussels," he said, pointing to the "increased weight" given to the pronouncements of the Bundesbank in comparison to decisions made by the European Central Bank.

Meanwhile, the UK government has promised a referendum on leaving Europe if re-elected this year; and the specter of Greece leaving the EU looms large.

The previously "unthinkable" notion of the union breaking up is now "top of mind" – despite it being against everyone’s interests, said Prodi.

Closer Ties Within Europe

Europe’s influence in the world is decreasing. And this in spite of it being the world’s number one industrial producer and exporter, says Prodi.

Examples of the disintegration of European unity can be found, he says, in world reaction to the current crisis in Ukraine, which are "dominated by the U.S. and Germany." All things being equal, said Prodi, the "dominant response" to Ukraine should have been "European."

He is in favor of "closer ties within Europe" to support economic growth and business. If the common energy market could be "better harmonized," he believes that Europe could become a major player in global energy exportation.

A better-coordinated Europe would also be better equipped to deal effectively with financial crises, he said, suggesting that Greece’s financial woes could have resolved faster and for less than €40 billion. Lack of agreement has meant that within three months, this figure has spiraled out of control to €300 billion and counting.

He rejected the notion of a Greek exit from the Union. "It is not in any country’s interest to leave the club as they will stand alone against the threat of competition from emerging countries like China, Russia and Brazil."

France, Italy and Spain: A Counterweight to Berlin

But Prodi is optimistic. He sees the current decline as part of the ebb and flow of European politics. The "European project is a long-term and inter-generational undertaking," he said.

He also sees short-term opportunities for economic growth in the Eurozone, thanks to cheap oil, quantitative easing and the current strength of the dollar versus the euro. "We should at least get one or two years’ growth out of this," he insists.

Longer term, Prodi feels that France, Italy and Spain should develop closer ties and speak with a more united voice in Europe – providing a counterweight to what he sees as Germany’s political and economic dominance.

He also stresses that new generations of Europeans must be won over. European integration, he said, needs to be "relevant" to young people to be sustainable and far-reaching.

"Repairing and re-establishing Europe’s place in the world is essential, I believe. Europe is no longer a ‘dream.’ It is a necessity."

Though global connectedness, which correlates with global growth, appears to be recovering since the global economic crisis, there is still a long way to go, as the latest issue of IESE Insight reveals.

Global strategist and professor Pankaj Ghemawat and research scholar Steven A. Altman unpack the findings of the latest DHL Global Connectedness Index, a comprehensive study that measures the depth, breadth and directions of trade, capital, information and people flows between countries. Greater international flows and deeper global connectedness correlate with faster growth and other benefits for countries, according to their research.

They discuss some of the implications for multinationals, analyzing the results for four Western economies worth watching: Spain, the United Kingdom, Germany and the United States.

• Spain. While Spain is finally growing again, the country has huge untapped potential, say the authors. Deeper global connectedness could help bolster Spain’s economic recovery.
• United Kingdom. With its global connectedness underpinned by its ties to Europe, a proposed U.K. referendum on EU membership and recent growth in anti-immigration sentiment could have huge implications there. A U.K. exit from the European Union would have serious consequences on its global connectedness, say the authors, adding that the United Kingdom could gain from strengthening its ties both to Europe and some of the world’s faster growing regions.
• Germany. Like other advanced economies, Europe’s industrial powerhouse has struggled to keep up with the shift of economic activity to emerging economies, and its ties to emerging economies have not kept pace with those countries’ fast growth. German firms will need to stretch themselves to retain and reinforce their positions abroad.
• United States. The U.S. economic recovery appears to have taken hold. However, a rising dollar could mean greater trade deficits in 2015. Fears about Europe’s economic prospects and new military commitments abroad make it tempting for many Americans to hunker down behind fortified borders. But doing so would ignore a golden rule of history: human progress is advanced by nations courageously reaching out to expand circles of cooperation.

Words of Warning

The majority of international interactions tracked by the authors have gone from being mainly between advanced economies to increasingly involving emerging economies. The authors see the declining breadth of global connectedness among Western multinationals as a worrisome trend. In their article, they suggest four things Western MNCs can do better to tap into growth in emerging economies.

The biggest mistake would be to opt for protectionism; in fact, they should do the opposite. "It is precisely when growth slows that the power of global connectedness is needed to accelerate economic recovery," say the authors.

"The future of globalization lies in the hands of a much broader collection of nations than was the case at any point in the recent past – a reminder, if ever one was needed, of the empowering and enriching benefits of globalization’s slow but onward march."

Members of the Alumni Association and subscribers to IESE Insight – a quarterly research-based magazine, published in separate English and Spanish editions – can read this and other articles using their membership credentials.

Those who are neither Alumni nor subscribers can access the premium content either by subscribing to the magazine or buying the articles.

Read the article "Benchmarking Globalization to Boost Business Connections."

On its third leg of the Asian tour in celebration of the 50th anniversary of the MBA, IESE alumni and friends met on March 24 in Hong Kong with guest speaker George Yeo.

Yeo is former Foreign Minister of Singapore, member of IESE’s International Advisory Board and currently Vice Chairman of the Kerry Group.

Cultural Sensibility: Feng Shui for All

Yeo’s session touched on global politics, business strategy and managing diversity. He began by discussing the importance of Feng Shui to the Chinese. This age-old practice aims to harmonize individuals with their surrounding environment and has been used historically to orient buildings and homes, taking into consideration the "invisible forces" that bind the universe, earth, and humanity together.

Strange as this practice may seem to a Westerner, he said, "if this meant having to keep the blinds down, you had to, even if the share price did not go up."

"By disregarding the views of others I would have created a negative spirit. While we cannot comply blindly, the point is that culture is important. Respect for others means respect for their cultural preferences."

A Harvard graduate, Yeo lauded IESE for being "highly sensitive to cultural diversity compared to other business schools."

"Harvard is still very much an American institution. London is still very British. But IESE is neither here nor there. It is betwixt and between. And while the lack of a dominant culture can somehow be a bit discomforting, this discomfort is in fact a source of energy. If you can make a small puncture in the boundaries, you can derive value. When cold and warm winds meet, you get tornadoes, hurricanes and typhoons," he said.

The world we are living is going through a profound shift. In the past it was dominated by the West and its ideas, but today’s world has become increasingly multi-polar and multicultural, and differences are a part of daily life, said Yeo. "Those who are able to manage these differences, will add value to society. Those who can't, who retreat into their own boundaries because it gives them more comfort, cannot add value."

Building Bridges Benefits Both Sides

The biggest and most important change happening in the region, said Yeo, is the re-emergence of Asian civilization in the global stage – principally China and India. This is a huge phenomenon which will change our lives, he said. For the first time China's trade with its neighbours - Japan, Korea, Asean, India, Central Asia, Russia - has overtaken its trade with the US and EU combined. China has become the world's prime trading nation. And the trend is likely to persist.

"In five to ten years from now, China's trade with its neighbours, its economy integrating with other economies in Asia, will create the most important economic hole in the global economy; and change patterns throughout the region."

Yeo went on to talk about China’s infrastructure bank – "World Bank for Asia" – originally meant to improve connectivity between China and its Asian neighbours. "The U.S. were concerned about their position vis-à-vis the Breton Woods institutions – principally the IMF and World Bank – and attempted to dissuade several countries from supporting this endeavor."

"However, the Chinese worked on their friends and explained that this was not a contest for dominance. "We need the connections," he stressed, "every time there is a difference or boundary and you build a bridge, a road, a tunnel, an air connection, a fiber optic link, both sides benefit enormously. There is value creation and you improve the lives of millions of people."

Asked about the dangers of a predominant on the global stage, Yeo observed: "In Western mentality, power is constant jostling: if one rises, it is at the expense of someone else. If China behaved like a Western country, then the emergence of China would lead to war. If China had a ‘missionary’ mentality like the U.S. which thinks that that if everyone were like them – democratic, with freedom of speech, etc. – the whole world would be at peace. If China shared this mentality but felt that its rise had to be accompanied by its ability to make other people Chinese, then we would have a troubled world. But luckily the Chinese have no such ambition," he affirmed.

Learning to Manage Diversity

China's growing influence on the world stage also means it can no longer "keep a low profile." There are key issues to be negotiated, such as the extent to which China will internationalize its economy; and how to manage cyberspace. Is China likely to "homogenize" like other global players?

"I don't think so," says Yeo. "Its civilization has stood the test of time and has shown there is something tenacious in its internal design, which is also in the DNA of the Chinese people," he said.

The growth of China’s influence will create a lot of new boundaries with Japan, Central Asia, Russia, South East Asia; increasing beyond to India, South Asia to the Caspian, Africa, Central America. New Chinese communities are being seen in Africa, Central and South America. There are more inter-marriages creating a new culture of overseas Chinese.

"If we studied these boundaries and remembered that every time there is a boundary there is a pressure difference, and every time there is a difference, there are possibilities to add value," said Yeo.

"IESE teaches us how to manage this diversity. If you can accomodate differences, then you can become friends – not only is this wonderful, it is also morally right because everyone one of us is different. We are created different. The evil of communism was in trying to make all of us the same which is against our very deep nature. Each of us is individually accountable. So when we deal with one another, the respect for diversity, for individuality, for the uniqueness of every person is critical. In this regard, IESE provides one of the best environments in the world’s leading business schools."

"Growth is the number one KPI. You can improve the margin, but growth is what counts."

Manuel Puig, vice chairman of the Puig Group, visited IESE’s Barcelona campus this week to share insight with students of the MBA program on the drivers of growth.

Puig Group which owns a number of global fashion brands including Jean Paul Gaultier and Nina Ricci, recently celebrated its one hundredth anniversary in business: a sustained success story that Manuel Puig attributes, in part, to its ability to "analyze megatrends to determine future opportunities."

Megatrends: Demographics, Megacities and Digital

Megatrends identified by Puig as being "key drivers of growth" include demographic changes, the emergence of megacities and, above all, the digital revolution – with the Internet "facilitating the disruption of business models and bringing new players into the arena."

"Über will operate in Barcelona, like it or not; Netflix will work in Spain, like it or not," Puig said. "Changes will increase. We have to live with it and accept this new world."

The Internet is also driving changes in consumer behavior, empowering consumers to inform themselves about products and prices – and make "intelligent" purchase decisions. Improved and immediate access to information also means greater transparency and the demise of the "moment of truth" marketing model.

"This model consisted of stimulus, in the form of ads, followed by the first ‘moment of truth’ at the store, where the purchase takes place and then a second ‘moment of truth’ at home when the product is used and evaluated."

"Today, there are zero moments of truth: After receiving stimulus, a consumer can immediately purchase and evaluate a product. This makes every brand interaction important. And now with the Internet, those stimuli can also be predictive. If someone watches a video on YouTube about a specific model of car, Google knows that he may soon be buying that car," said Puig.

Winds of Change Blowing East

The world is changing and the business center of gravity is moving to Asia, as a growing middle class there become consumers, said Puig. In the so-called developed world, the population is becoming older as life expectancy increases, and people are having fewer children. Companies need to have a strategy for Asia while not neglecting their Western consumer base, he said. "Exports should not however be the principal aim, but rather a consequence of quality."

Combined with this demographic shift is the emergence of the megacities – which are making the world "a bit more boring," he said: "In London or Paris you find the same brands and shops and the same kind of restaurants."

However, the growth of the megacities means that a brand can effectively have a global presence simply by operating in those cities. "Approximately forty percent of the world’s consumption of luxury goods happens in the ten largest megacities."

Where’s the Competition?

Competition will come from players that think and act differently than you — as well as from other sectors, said Puig. "Perfumes compete against watches or cell phones today," he said, as more and more products become "signifiers of lifestyle."

And the future cannot be predicted by past results. Puig cited the example of Sony’s content-driven marketing strategy. "Sony’s plan was disrupted by Apple’s iTunes – a clear example of the sales channel overtaking content in importance. But perhaps no one could have foreseen that change."

Asked by MBA students how the Puig Group analyzes the world’s megatrends, Puig said that the company focuses on "segmentation and deep analysis."

"We work on loyalty. We have to learn more about the consumer: why does a consumer buy a product? Why is a customer loyal or not? What can we do to encourage loyalty?"

Analysis of megatrends yields crucial data about who your future potential customers might be, he said, and what your sources of future growth look like. "And then it’s up to your company to have sufficient agility to bring your brands and products closer to those future customers."

"This isn’t easy. But like it or not, the companies that can step up this challenge will push the others aside."

Unilever CEO, Paul Polman, has joined IESE’s International Advisory Board (IAB), a governing body which advises IESE on trends and advances in leadership and management training.

Two other senior executives also join the IAB: Benita Ferrero-Waldner, Advisory Council President of Cremades & Calvo Sotelo, and Ibukun Awosika, CEO of The Chair Centre Group.

With these new appointments, the IAB is now made up of 38 prominent business leaders, including Isak Andic (Mango), Stanley Motta (Motta international), Michael Camdessus (Banque de France), Rafael del Pino (Ferrovial); Mariano Puig (Fundación Puig), Mar Raventós (Codorniu), Siegfried Russwurm (Siemens), Roberto Servitje (Bimbo), Martin Sorrell (WPP Group), Francesco Vanni d'Archirafi (Citi), Werner Wenning (Bayer), Bruno di Leo (IBM), George Yeo (Kerry Group), and Ermenegildo Zegna.

IESE’s International Advisory Board was founded in 1989 with the objective of analyzing the socioeconomic context in which businesses operate, as well as needs, trends and advances in leadership and management training. Led by IESE Dean, Professor Jordi Canals, the board is composed of entrepreneurs and business leaders from continental Europe, the United Kingdom, the Americas, Africa and Asia.

The IAB meets regularly to assess the socioeconomic context in which companies operate, the evolution of business management around the world and the challenges and opportunities related to training new leaders.

IESE’s International Advisory Board meets this week at IESE’s Barcelona campus, and a special session will be held for executive alumni.

"You can’t predict earthquakes, but you can detect fault-lines," said George Yeo, former foreign minister of Singapore and chairman of the Kerry Group and member of IESE’s International Advisory Board.

"You need to look at the deep forces that cause changes and move with them. If you fight these forces, you’re like a ship that refuses to pull up anchor and set sail; you’re almost guaranteed to sink eventually. The biggest risk is being risk averse."

Yeo was addressing an audience of MBA students and alumni in Barcelona this week, who had gathered to hear analysis of the global economy from members the International Advisory Board.

The session, entitled "How International CEOs See the World Economy" was introduced by IESE Dean Jordi Canals and chaired by Associate Dean Eric Weber. Yeo and five other members of the board analyzed the risks and factors currently affecting stability and growth – and the opportunities that lie ahead.

Difficult Times and a "Feeble West"

Patricia Francis, chair of public sector transformation for the government of Jamaica, noted that geopolitical instability remains a risk to global trade – a view shared by the majority of CEOs, she said.

"The risks to change are mainly on the downside," she said, pointing out that any shortfall in U.S. performance could stifle global demand, as demand from China was likely to be "steady rather than accelerating." This was evidenced by the fact that China’s GDP growth in 2014 was the lowest for 24 years.

The subject was explored from another angle by Dame Janne Haaland Matláry, professor of international politics at the University of Oslo, and former state secretary in Norway’s Ministry of Foreign Affairs. Drawing on her work at the Norwegian Military Staff College, she likened geopolitics and business to games, in which only two factors matter: rules and the "trust between partners."

From 1990-2008, successful Western economies had prevailed but a "spiraling decline in defense spending" had left them "feeble." Defense spending in Europe, she said, was now less than two percent of GDP but much higher in China and Russia where it is increasing by 15 percent a year.

"Our political institutions are in crisis. These are difficult times, but the solution is to analyze the risk – and deal with it."

The Pillars of Success

Hans Jacob Bonnier, executive vice president of Bonnier AB, said that the three pillars for sustained growth remained the same as at the time of the French revolution: Liberté, Égalité and Fraternité.

"If these pillars are imbalanced, we are in trouble," said Bonnier, who listed the greatest threats to the balance as extreme poverty, financial collapse, limited global resources and climate change, and the risk of war.

The Only Constant Is Change

"Where are the opportunities of the future?" asked Bruno Di Leo, senior vice president of sales and distribution for the IBM Corporation.

Everything is in transition, he said, and this is creating new paradigms: "In a world with limited resources, it’s changing from ‘who can make things cheapest’ to ‘who can make things smartest.’"

And in terms of trade, he said, it’s changed from: "made for China, to ‘made in China,’ and now it’s ‘made with China.’"

The global trend of increasing urbanization, the huge cohort of ‘millennials’ and an ageing global population, he said, were examples of transitions that presented opportunities as well as challenges.

The theme of opportunity amid risk was picked up by Francesco Vanni d'Archirafi, CEO of Citi Holdings. "Globalization," he said, "has created a more complicated world."

He described the bilateral relationship between the United States and China as the "most important" in this globalized world – adding that, a positive note, this was "on a better footing than most people realize."

Dramatic improvements in life expectancy and incomes in the developing world had been created alongside increased systemic risk because of increased connectivity.

"The pace of change has leapfrogged the ability of institutions to cope," said Vanni.

The Geopolitical Dinosaur

This point was echoed by Patricia Francis, who said: "Changes are being driven by the private sector. The rules and regulations are antiquated. Flexibility needs to be built into political systems in order to adapt to change. This hasn’t happened, and the result is fragmentation."

According to Dame Janne Haaland Matláry, the opportunities of globalization are only starting to be exploited.

"Most people are still mentally tied to a region, but geopolitics is a dinosaur – it can’t compete with globalization."

The insurance industry is emerging strong from the crisis, increasing its solvency margins by 18 percent in recent years. It is also undergoing renewal as a sector, and preparing itself for new challenges.

These were the conclusions drawn by participants of the 5^th Insurance Industry Meeting, organized by IESE’s Center for International Finance (CIF) in collaboration with Ernst & Young (EY).

During the meeting which was hosted by IESE Madrid on April 15, experts agreed that a series of trends will shape the development of the insurance industry in the short and mid term: The European Solvency II Directive, digitization, internationalization, evolving customer relations and the growth of products related to health and assistance.

Solvency II

Starting January 1, 2016, the full implementation of Solvency II will strengthen the insurance sector not only in Spain, but throughout Europe. This directive aims to improve products while increasing oversight and limiting risk (with respect to the market, operations, credit and liquidity).

Solvency II is structured on three pillars: the quantification of assets, liabilities and capital; an oversight process; and transparency requirements.

The directive will compel the European industry to grow, to harmonize its practices, and to become both more dynamic and more solvent.

"But let’s not mistake ‘harmonize’ for ‘homogenize.’ The insurance industry in Europe will only grow if it analyzes the needs of the societies it serves, if it respects local uniqueness and if it opens itself up to competition," said UNESPA President Pilar González de Frutos.

The experts predicted that Solvency II will help harmonize the industry and promote growth. "We all want it to work," they agreed.

Internationalization to Find New Revenue

The recent crisis forced many companies, including Spanish ones, to expand into other markets in search of new revenue. Insurance companies have also increased their presence on the new global scene. Technology has facilitated the internationalization process. In addition, strategic diversification has helped insurance companies minimize risks and take advantage of business opportunities in other geographic areas.

The experts agree that the key to success is to adapt the business model to local needs without forgetting the big picture, and this requires being flexible. "It is essential for the matrix organization to function well and this is not always easy. Another challenge are cultural considerations: you have to understand customers and adapt to their needs," pointed out Ignacio Izquierdo, CEO of Aviva.

But being global merely for the sake of being global doesn’t make sense. Insurance companies have to be selective and compete only in the markets in which they can give value to their shareholders, he said.

Digitization and Innovation

The industry must adapt to new technologies to ensure its future. Digitization is a pressing need; it will affect the corporate culture and the marketing model of each company. Digitization will force the industry to rethink all its procedures. Only those insurance companies that innovate and take risks will grow. Those who don’t may disappear.

"The ability to adapt to change is vital in business," noted CEO of Aegon Spain, Jaime Kirkpatrick. According to Managing Director of Insurance for Mutua Madrileña, Juan Hormaechea, digitization offers insurance companies "a completely unknown world," which will facilitate the customization of products and will allow companies to reach the ideal customer more easily.

Focusing on the Customer

Another effect of digitization is that it dramatically changes customer relations. An important percentage of new customers buy insurance via the web, social networks and mobile platforms. As we know from other industries, such as banking, the process is irreversible.

This forces companies to simplify processes in order to make it easier to purchase insurance online. "Customers need to be at the center of this technological process, which is going to allow us to segment products very well. Everything we do should be focused on the customer," explained Óscar Herencia, general manager of MetLife Iberia.

This segmentation allows insurance companies to offer products that are increasingly adapted to the needs of customers. "Customers and technology are the most important things at the moment," said Marketing and Sales Director of Axa Assistance, José Félix Cañas.

Health and Long-term-care Insurance

The aging population means that more and more people are buying health insurance and, to a lesser extent, medical reimbursement plans.

Top executives of three major insurance companies specializing in health (Asisa, Sanitas and SegurCaixa Adeslas) called for greater collaboration between the private and public sectors for health management, which would "take the pressure off public hospitals." According to them, citizens should be able to choose between public hospitals and private facilities.

Enrique Porres, CEO of Asisa, explained that other countries have developed rules that make it possible to reduce the pressure on the public health system with the support of insurance companies. The speakers warned that Europe has a serious sustainability problem because the cost of the public health system is expanding faster than economic growth.

In terms of long-term care, the participants agreed that without public-private collaboration, it will be impossible to develop an effective approach to caring for dependent persons.

Excellent Assistance Policies

Extended warranty, travel, family, legal, health, home, road... The array of assistance offered is extensive and, in the case of Spain, its quality is exceptional.

"Spain’s assistance policies are among the best in the world," noted Juan Carlos Guzmán, CEO of Mapfre Assistance. So much so that countries like China and the U.S. have begun to adopt the Spanish model, which prioritizes direct and constant contact with the customer and solves problems by providing services rather than merely writing compensation checks.

Pundits have dubbed personal data "the new oil" of the 21st century. Yet for all the hype surrounding big data, people complain they have less meaning and are frustrated with how poorly brands leverage their information. That’s because many companies still mine data with the end goal of streamlining business processes, largely neglecting an essential piece in the data economy puzzle: the person.

Writing in the latest issue of IESE Insight, associate professor Evgeny Káganer and Abby Margolis, director of research at Claro Partners, define the core elements of a new design mind-set that companies must adopt as they create new data-rich products and services.

In the emerging Personal Data Economy, firms will reap value to the extent that they enable, empower and meet future needs, rather than merely analyzing past behavior. The authors envisage a new organizational figure – the data experience designer – to take the process forward.

A Different Mind-set

The mind-set of the data experience designer differs from that of the traditional data scientist in several regards. Whereas scientists view data primarily as outputs of human activity, designers regard data as inputs into human activity that can change and enhance the way people interact with the world.

So, instead of mining and aggregating data to track past consumer behavior, designers try to understand the situational context in which consumers generate data, and use that data to create and deliver meaningful experiences for future engagement.

The authors list several new tools coming onto the market that suggest how to reach today’s new class of customers, or "prosumers," i.e., those who are both producers and consumers of data.

One example is Gym-Pact.com, an app that uses cash wagers to help people meet their fitness goals, which taps into meeting the functional, emotional and social needs of prosumers. Another is Waze, a social GPS solution, which pools data about current road conditions from fellow drivers who suggest which route to take to get home fastest. Both are trying to make life better for people, enabling new interactions and experiences based on personal data and contextualized to the actual lives of real individuals.

Getting Inside the Head of the Prosumer

The authors interviewed data prosumers in cities around the world, including Berlin, Boston, London, New York, San Francisco, Sao Paulo and Tokyo. Their research turned up some surprising results.

For one thing, data prosumers are fully aware of the digital footprints they leave behind. They see value in pooling data rather than just harvesting one’s own individual piece. They don’t like to be treated as averages.

As one young New Yorker explained, "I may visit Amazon as a foodie, as a Gen Y expert or as a business analyst, but I don’t want to be treated as all three at once. I will just end up getting a lame recommendation for another Harry Potter book that I don’t want!"

Moreover, people are not naive to the ways that businesses make money off their data. Indeed, most are willing to share data with companies so long as they perceived some equitable value in return. The companies that grasp this will emerge as the leaders in the new Personal Data Economy.

Although the data prosumers in the authors’ sample may not be representative of the broader population, the authors believe these outliers, given their growing numbers, provide clues for how the average person might think about and interact with data in the not-so-distant future.

Members of the Alumni Association and subscribers to IESE Insight – a quarterly research-based magazine, published in separate English and Spanish editions – can read this and other articles using their membership credentials.

Those who are neither Alumni nor subscribers can access the premium content either by subscribing to the magazine or buying the articles.

Read the article "Why All Companies Need a Data Experience Designer"

"Business people have a calling not only to do business, but to be exemplary business leaders."

Cardinal Peter Turkson, president of the Pontifical Council for Justice and Peace, visited IESE’s Barcelona campus this week to present The Vocation of the Business Leader: A Reflection.

The document, he said, is a practical resource for business people that "expands on the concept of business as a ‘noble vocation’ – as stated by Pope Francis in Davos in 2014 – to meet the needs of the world with goods that are truly good; and services which truly serve."

Cardinal Turkson was speaking at the 4^th International Colloquium on Christian Humanism in Economics and Business, which was moderated by IESE Professor of Business Ethics, Domènec Melé. Joining him were José Maria Simone, president of International Christian Union of Business Executives (UNIAPAC) and Luis H. de Larramendi, president of Acción Social Empresarial (Social Action in Business).

Time to Think, Reflect and Plan

Rather than present a "minimalist or negative set of guidelines," the goal of The Vocation of the Business Leader, is to "help build a model for action," said Larramendi.

"This document is not intended to admonish business people or to stigmatize efficiency. Nor is it a set of formulas to remove each and every doubt. It is a guide to help Christian business people improve themselves and to help make the world a better place."

The financial crisis of recent years has increased the pressure on business leaders to seek profitability, he said. Meanwhile, the increasing speed of information sharing and communication has had a "negative impact" in reducing the time available to think, reflect and plan.

"There is a need to combine the logic of the market with the logic of the gift. The gifts of talent, education and support that business leaders have been given by God and should be seen as gifts to be shared, not as private goods," added Cardinal Turkson.

He went on to talk about the "divided self" – a tendency to compartmentalize and separate attitudes and behaviors from values or personal faith.

"Faith is not like spreading marmalade on toast – something to be added or removed to suit your taste," said Cardinal Turkson. "It should be an integral part of life."

"In this way business people overcome cynicism and fear arising from a divided self through faith; aiming to overcome obstacles and bring hope and light."

Redefining "Success"

The Vocation of the Business Leader also seeks to expand the definition of success beyond monetary terms and encompass concepts such as "human dignity and the common good above those of private gain," said José Maria Simone.

"We business people have excellent methods to measure the monetary value of work, but we do not yet have ways to fully measure all its benefits. Take the example of a worker who is fulfilled by his job – what is that worth?" he asked.

"One of the jobs of a business leader is to create jobs for others and to give those workers to opportunity to grow," Simone said. "The best way to create added value is to see people not as means but as ends in themselves."

Responding to the question of how business profits should be shared, Simone added: "Profits are vital, but how should they be used? All stakeholders in a business should be beneficiaries: owners, workers, shareholders..."

Cardinal Turkson brought the discussion to a close by urging readers not to view The Vocation of the Business Leader as a finished work but as a "work in progress." He welcomed feedback from the business community: "Businessmen and women reading this book should feel free to share their comments with the Pontifical Council for Justice and Peace."

The sports industry is growing exponentially. And creating a breadth of opportunities for those ready and willing to ride the wave of disruption it’s experiencing.

At the 9^th Conference on Sports Business Management, IESE Professor of Entrepreneurship, Antonio Dávila, highlighted three trends that are disrupting the industry – and generating interesting new opportunities for entrepreneurs who are up to the challenge.

These are: new developments in television broadcasting rights; the ‘professionalization’ of sports; and the digital revolution.

Television Rights

Three years of television rights to the English Premier League recently sold for a record figure of almost 7 billion euros, marking a milestone in European football. And not only because it opens a significant gap with respect to the rest of the major European leagues (in Spain, for example, broadcasters pay approximately 800 million euros). The Premier League also draws the largest audience and has the most equitable distribution of TV revenues among clubs.

At the same time, the multi-million-euro contract signed with the channels BT (UK) and Sky (New Zealand) is evidence of the advantages of collective negotiation over club-by-club negotiation (the Spanish league is the only major European league in which clubs negotiate their own television rights).

With collective bargaining, leagues take in more money and distribute it more evenly. This affects the entire structure: leagues become more competitive and exciting, more modest clubs can survive, and there is more investment in sports facilities and the development of future players.

The Professionalization of Sports

The sports industry is clearly a growth market. Professor Dávila demonstrated that revenue from TV contracts and agreements with sponsors is increasing exponentially in almost all professional leagues, both in the U.S. and in Europe.

Moreover, there is a convergence of business models and structures. In the U.S., for example, expenditure on signing players tends to be around 45-50 percent of revenue, a phenomenon that occurs in different sports, leagues and clubs.

And the same trend can be seen in Europe, although in this case the figure is slightly higher— 60 to 65 percent of revenue (with the exception of the German league, which allocates approximately 50 percent of revenue to signing players).

In general, contract amounts for players are on the rise, but there are enormous differences among sports and between top players and average ones. "There are big disparities in the sports industry," noted Dávila.

Big data and the Digital Revolution

Alex Martínez Roig, content manager for Canal+, highlighted the factors in understanding the Internet’s revolutionary impact on every aspect of television; including technology, content, consumer habits and distribution models.

"Windows of exploitation are changing rapidly," he explained. And the result of all these changes is the ability to personalize offerings. The new consumer is digital, mobile, multi-screen and always connected. And this consumer demands what I want, when I want it, how I want it and where I want it. "The consumer is in charge. Our job is to offer content and make it maximally available."

A New Era for Sport

But this is just one part of the radical change that new technologies are bringing about in the sports industry. The Internet of Things, wearables and big data are creating huge challenges – but also new initiatives in sports management.

As Vanessa Palmer, (EMBA ’10) said: "This is not an era of changes; we’re in an altogether new era."

Palmer is CEO of eSportics, a young company that has launched a platform for managing sports events and a social network for padel tennis enthusiasts.

There are growing opportunities for startups that link sports and technology and the development of applications that affect how sports are both managed and played.

Oscar Pallarols, director of the Smart Living program of Mobile World Capital Barcelona, predicted that these innovations will have a great impact in several areas.

New apps will enhance the experience of fans at sporting events. And fitness and monitoring are a thriving market segment that sports brands like Nike and Garmin are capitalizing on. Meanwhile, Elite sports are benefiting from technology that can improve athletes’ performance and massive real-time data analysis that can predict and improve play.

The future for the sport industry is looking interesting. And it’s all to play for.

Unilever CEO, Paul Polman, has joined IESE’s International Advisory Board (IAB), a governing body which advises IESE on trends and advances in leadership and management training.

Two other senior executives also join the IAB: Benita Ferrero-Waldner, Advisory Council President of Cremades & Calvo Sotelo, and Ibukun Awosika, CEO of The Chair Centre Group.

With these new appointments, the IAB is now made up of 38 prominent business leaders, including Isak Andic (Mango), Stanley Motta (Motta international), Michael Camdessus (Banque de France), Rafael del Pino (Ferrovial); Mariano Puig (Fundación Puig), Mar Raventós (Codorniu), Siegfried Russwurm (Siemens), Roberto Servitje (Bimbo), Martin Sorrell (WPP Group), Francesco Vanni d'Archirafi (Citi), Werner Wenning (Bayer), Bruno di Leo (IBM), George Yeo (Kerry Group), and Ermenegildo Zegna.

IESE’s International Advisory Board was founded in 1989 with the objective of analyzing the socioeconomic context in which businesses operate, as well as needs, trends and advances in leadership and management training. Led by IESE Dean, Professor Jordi Canals, the board is composed of entrepreneurs and business leaders from continental Europe, the United Kingdom, the Americas, Africa and Asia.

The IAB meets regularly to assess the socioeconomic context in which companies operate, the evolution of business management around the world and the challenges and opportunities related to training new leaders.

IESE’s International Advisory Board meets this week at IESE’s Barcelona campus, and a special session will be held for executive alumni.

La palabra "reinvención" define bien la trayectoria profesional de Luis Ferrándiz, socio desde hace tres meses de la consultora KPMG y uno de los mayores expertos de España en el ámbito de las estrategias digitales.

Corría el año 2006 cuando Ferrándiz, entonces directivo de TPI Direct (Grupo Telefónica), se encontró de repente sin trabajo por una serie de circunstancias ajenas a su voluntad. Pese al varapalo personal que supuso esto supuso, no cejó en su empeño y, absolutamente convencido de lo que hacía, decidió montar su propio negocio de servicios de marketing y ventas.

Desde su casa, con un ordenador y sus propios ahorros, fundó la agencia ADN. El primer año, la empresa facturó 30.000 euros. Doce meses después, la facturación ya ascendía a 500.000 y, el año pasado, la cifra de negocio superaba los dos millones de euros con unos márgenes del 30%. Hoy, ADN es un proveedor de referencia en el mercado español, cuenta con 35 empleados y acaba de aliarse con KPMG. "Hay que creer en uno mismo y no dejar nunca de pedalear. Para correr un maratón tienes que entrenar todos los días. La perseverancia es fundamental", admitió Ferrándiz durante una sesión con los alumnos del programa Executive MBA (EMBA).

Licenciado en Ciencias Económicas y Empresariales, este emprendedor de éxito cursó en 1998 el programa MBA del IESE en Barcelona. Enseguida se centró en el mundo de las ventas dentro de la multinacional Johnson’s Wax, y durante un año y medio recorrió supermercados de Castilla y León vendiendo productos de limpieza. "Uno vende cuando genera una necesidad y ahí aprendí la base del oficio", recordó en la ponencia.

Empezar a ras de calle le aportó mucho. Su progresión en la empresa era imparable, pero Yahoo se cruzó en su camino y Ferrándiz no se lo pensó. Las nuevas tecnologías le interesaban, corría 1999 y las "punto.com" estaban en pleno auge, y pronto en caída libre. Desde su puesto de director de ventas, sufrió en primera persona aquella crisis. De allí fichó como responsable de marketing en el área de Deportes del Grupo Recoletos, hasta que recaló en TPI Direct y, seguidamente, se quedó sin trabajo.

"Que seas bueno no significa que te lo reconozcan. La vida está llena de altibajos", reflexionó. Pese a que el panorama era complicado, y consciente de sus conocimientos de marketing y de herramientas digitales, Ferrándiz apostó por ser su propio jefe. "No hay gente mejor que otra. Hay gente que entrena mejor que otra", incidió a lo largo de la conferencia.

Con mucho esfuerzo, sacrificio, trabajo y el apoyo incondicional de su familia, ADN ha multiplicado su negocio en los peores años de una crisis económica voraz, sobre todo en España. "Uno no sube el Everest sin dolor. Cuesta muchísimo sufrimiento subir y mantenerse en lo más alto", añadió.

En opinión de Ferrándiz, quien también es colaborador del IESE, profesor del Instituto Superior para el Desarrollo de Internet (ISDI) y asesor de compañías internacionales en materia digital, una empresa va más allá de los meros beneficios económicos. "Hay que huir de los pelotazos. Soy una persona muy idealista, y creo que los negocios deben aportar un valor a la sociedad. Este ha sido mi leitmotiv desde el primer minuto en que puse en marcha ADN", concluyó.