London Business School

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Profile: Sara Watts, Vice Principal (Operations), The University of Sydney

With qualifications including a BSc from the University of Sydney and an MBA from Macquarie Graduate School of Management, Sara worked for more than 28 years at IBM Australia and New Zealand. She became CFO in 2008. Soon after attending the Proteus programme in 2014 she took on her new role as Vice Principal (Operations) at the University of Sydney.

The Proteus Experience

“I was looking for an alternative executive education programme and Proteus was just that. There is nothing else like it. I wanted an executive education experience that would pique my interest, that wasn’t necessarily classroom-based, and that would teach me more about myself and becoming a more effective leader. I was at a turning point in my corporate career and it was time to determine my next steps and shape my legacy.”

The London Experience

“The London setting was a major enticement for me for reputational, central location and cultural reasons. At the end of the week, we visited an inner-London high school where I found the stories of students we met both humbling and inspiring. After Proteus, I took a few days off and immersed myself in the city’s culture. I saw West End shows, explored museums and absorbed the huge range of art and culture on offer. It was wonderful!”

Find out more about the Proteus programme.

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Profile: Funmi Akinluyi, Investment Director at Silk Invest Ltd

Funmi began her career as an investment analyst at Citigroup Nigeria. Her previous roles have included Portfolio Manager at Stanbic IBTC, Nigeria’s largest asset management firm, and Fiduciary Risk Consultant at Barings Asset Management. She joined Silk Invest in 2008, where she oversees listed equity investments in sub-Saharan Africa.

 “I took the three Investment Management programmes back-to-back and dedicated nine months to the process. Attending the evening classes fit perfectly around my working hours and meant I had enough time to read all the back-up materials, absorb the information, and come thoroughly prepared to each session – I’m not sure that I would have been able to do that with a one-week programme! The evening class format also had a practical benefit for my company. During the Equity Portfolio Management programme in particular I was able to take my folder of notes into my workplace each week and feedback on what I had learned.”

Moving forward

“All in all the programmes were an outstanding experience. I can’t recommend them highly enough to anyone working in finance. Senior, junior, it doesn’t matter – everyone needs this knowledge! We all need to be updated on what’s happening, get talking to people, share ideas and inspirations. Ultimately, it really helps you grow.”

 Find out more about the Investment Management evening programme 

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Profile: Maureen Dalziel, CEO at MD Health Consultancy

Having trained as a doctor, Maureen was a participant of the very first Accelerated Development Programme (ADP) in 1989. Following the programme she went on to become CEO of South West Hertfordshire District Health Authority and head up a number of major healthcare and social corporations. She now runs her own consultancy providing expertise to the pharmaceutical industry, medical communications agencies and the National Health Service (NHS). She is currently the chairman of Barking, Havering and Redbridge University NHS Hospitals Trust.

“The programme played a major part in my transformation from a medical consultant to a leader, giving me a solid grounding in key principles and creating a framework for my leadership style.”

New ways of learning

“Coming from the public sector, I was eager to gain insight into how the commercial world worked. I wanted to discover how organisations could be both constructive and top performing, and understand the theory behind the most effective business and management practices. Medicine is often taught by rote, but what and how I was taught at London Business School was quite different. Eye-opening and inspirational, it felt like a mini MBA. There were some surprising moments that were a lot of fun; I even did some rock climbing!”

Find out more about the Accelerated Development Programme/Transition into General Management Programme

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Profile: Narassa Govender, Head of Quants/Research, Sygnia Asset Management

Narassa Govender has been at Sygnia Asset Management in South Africa since 2009, where she worked her way up from Trainee Quantitative Analyst to Head of Quants/Research. She is also an Executive Director of the company. She has a Business Science Degree with Honors in Finance from the University of Cape Town and attended the Strategic Investment Management Executive Education programme in June 2013.

“I came to London Business School to gain an international view on the work we do at Sygnia. For me, the Strategic Investment Management programme offered an unsurpassed opportunity to gain specialist knowledge and interact with people in similar positions from all over the world. I had moved up the ranks very quickly to my role as Director and Head of Quants/Research, so those five days offered me the time and space to take a step back and look at the work we do from a big-picture perspective.”

Fellow Programme Participants

“The networking opportunities were extremely valuable and I still keep in touch with many of the other students. “

Faculty

“I also gained so much from the faculty and guest speakers, and the positive dialogue they encouraged. “

Personal Empowerment

“It was a huge confidence boost knowing that I was now able to interact with a variety of people, communicate with them as an equal and even, sometimes, challenge them.”

Find out more about the Strategic Investment Management programme 

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Have rating agencies contributed to the financial crisis?

Rating agencies have become more conservative in assigning ratings over time, which has affected corporate funding and growth

Summary of Article Published In THE JOURNAL OF FINANCE • VOL. LXIX, NO. 5 • OCTOBER 2014

Professor of Finance Henri Servaes (in collaboration with Ramin Baghai and Ane Tamayo) recently published findings from his research on changes in rating standards over time and its effect on corporations’ financial policies. 

Rating agencies have been accused of contributing to the financial crisis because their ratings of mortgage backed securities were deemed too lenient given their default risk.  Professor Servaes finds that this has not been the case for corporate ratings.  On the contrary, corporate ratings have become more conservative over time, requiring companies to reduce debt and improve profitability, just to keep the ratings constant.  Some firms have been more affected by these changes than others and this has had a profound effect on their funding and growth. Because these firms’ debt is more expensive than it should be, these companies have moved away from debt financing, but this has increased their cost of capital, leading lower growth.  Such firms also save more cash than other companies.  

To learn more about this and other cutting edge research findings in the area of corporate finance and financial strategies for value creation, Professor Servaes is teaching the upcoming Corporate Finance: Funding, Risk and Restructuring Programme in two formats; as a 5-day module from 1st to 5th December, 2014 or beginning 6th May 2015, as a 10-week evening programme with weekly lectures and bi-weekly tutorial sessions.  

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How to pick the best from the rest

Everyone wants to know who the best fund managers are, and even more importantly, whether they’ll continue to do well in the future. Yet current measures for evaluating managers suggest few can sustain good returns year on year. Only a tiny percentage of fund managers consistently outperform standard benchmarks such as the FTSE All-Share index or S&P 500. This has led many observers to conclude there is little skill involved and it is just down to luck whether traders do well or not.

But Professor Narayan Naik, Academic Director of our Strategic Investment Management programme, thinks the traditional models based on managers’ past performance are not good enough. He has been developing new analytical models that get closer to the skill involved in trading, based on more information about what managers actually do – such as the number of buy and sell trades they make and the size of their trades. His latest research almost doubles one’s chances of picking good managers for the future and lifts the lid on the way the financial industry works.

Developing a new skill metric

It was purely a chance conversation with investment consultant Rick Di Mascio while travelling seven floors in a lift in London’s financial district of Canary Wharf, that gave Naik the idea for his latest research. Di Mascio’s company, Inalytics provides a unique database of $1.8 trillion worth of daily trades for over 750 institutional portfolios spanning all major regions and runs from 2001 to 2012, along with the benchmarks managers are asked to outperform.

Professor Naik and his PhD student, Anton Lines, who serves as teaching assistant on the programme, have used the data provided by Inalytics to develop a new skill metric relating the size of a trade to the likelihood the decision will turn out to be correct.

Getting it right and going big

They have found the best way to predict future success is to find managers who carry out successful large trades and plenty of them. The logic being that the only way to outperform a benchmark index is to take positions which are different from the index, to make trades and take risks. At the same time, making large trades is a sign of confidence – if you think a stock is going to do well, then you want to have a lot of it. So, one want managers who make large trades that are successful. Professor Naik’s research indicates that while the average manager is unskilled, approximately 10 per cent of managers can be identified as persistently skilled using this metric.

Fund managers have told Naik that these are the kind of metrics investment companies themselves use to reward manager performance, but they typically don’t share this information externally - perhaps because it shows managers’ limitations as much as their successes. Despite being pleased with his findings, Naik says he has to remind people that this is not a cast iron guarantee their manager will continue to outperform the benchmark: “When I end my presentation, I always say that with active management, you do your best in terms of manager selection, but then you still have to pray a lot.”

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The family experience of a Sloan student

Before moving to London from Ecuador, Sloan Fellow, Lucía Vallejo Penaherrera and her husband, Gabriel, talked at length about making a change in their lives. Lucía was keen to enrol on London Business School’s Sloan MSc and when she was offered a place, it was an opportunity too good to miss.

“Sloan has given me exactly what I was looking for. I love the programme’s exclusivity, and the curriculum has just the right focus on leadership and strategic decision making. I was very excited to experience life in Europe – now I’m studying in one of the world’s great capital cities, at one of the world’s best business schools”, Lucía says.

“We decided that moving to Europe would be enlightening for our three girls and would help them develop a broader perspective on the world. Our whole London experience has been brilliant. The girls have had an amazing time - we’ve watched them become more confident, they’ve adapted quickly, and they love their new school”, Gabriel says.

There is great support for partners and the School provides information and assistance to families moving here. Gabriel and their daughters have found it easy to engage with School life:

“The Sloan class has invited us to several events - we’ve been to sports activities, lunches and dining events. Getting to know people in these different environments has been great. We’ve also been to a Chinese New Year event, a Japanese party, Persian New Year, and a Brazilian samba party. It’s been a lot of fun for all of us.”

Lucía doesn’t yet know what her next career move will be, but she wants to be the kind of leader that creates value, helps improve lives and contributes actively in society.

Whether she goes back to Ecuador or take a new role in Europe, wherever we are, if we’re together as a family, then we’ll be OK.”

Learn more about the Sloan Masters in Leadership and Strategy.

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With Asia leading global economic growth, opportunities are abound for business. What I hear from leading entrepreneurs and employers is a common theme - it's a challenge, but also a need and a desire, to hire the best talent with a global outlook.

Linda Yueh, BBC World Chief Business Correspondent and Adjunct Professor of Economics

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Should an independent Scotland have its own stock exchange?

Paul Marsh of London Business School and Scott Evans of Walbrook Economics, identified 100 purely Scottish stocks currently listed in London and compared them with a parallel ‘Rest of the UK’ index over the last 60 years.

They found that £1 invested in the Scotsie 100 in 1955 would have grown to £648 today (with dividends reinvested), a 5.7% increase in real (inflation-adjusted) terms. However, £1 invested in the rest of the UK would have grown to £1,168, a 6.8% increase.

Read the full story and download the report.

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An engineer by trade, Gloria spent most of her career in R&D roles with a very technical focus. Prior to joining Sloan, she made an internal move to a position in commercial marketing and new business development. She joined the Sloan programme in 2014 and was awarded the Sloan Scholarship for Women.

"I’d always wanted to study on an executive programme and rebrand myself as a more well-rounded business professional. A couple of years into this new position, it seemed the right time to do exactly that.

The Sloan Masters in Leadership and Strategy at London Business School was my number one choice. It’s designed specifically for people like me – senior professionals who are already working in positions of responsibility. The programme offered the focus on leadership and strategy I was looking for, and the global reputation I wanted. I also liked the exclusivity of attending a programme only offered in three universities in the world.”

Six months into the programme and Gloria reflects on her learning experience:

"In addition to the knowledge and insights I’ve learned in marketing, strategy and finance, Sloan has taught me to understand and navigate the politics of company life with more finesse. I’m much more focused on the strategic overview and I’m learning to approach organisational issues in a more subtle and objective way.”

For Stucchi, some of the highlights of the programme include:

The Sloan faculty

“I’ve found the Sloan faculty to be a real highlight. I love going to class – the professors have different styles, but they’re all strong, charismatic personalities.”

The Sloan class

“We’re a challenging group. Everybody is there because they have leadership attributes, and everybody has strong opinions. It’s easy to expect people to follow you when they report to you, but it’s not quite as simple when you’re being challenged in the classroom.”

The case studies and approaches to leadership

“Part of the challenge is learning to recognise and adapt my own leadership style. It’s important to me to get the best out of the people I manage, and to ensure they’re comfortable working for me. Understanding how and why people react to certain events is key to ensuring they’re productive, and also happy in their working environment.”

Gloria is now more open to explore opportunities; this time empowered by an extra confidence in her abilities.

Learn more about the Sloan Masters in Leadership and Strategy. 

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Today is Summer Solstice in the UK, the day with the longest period of sunlight! We're looking forward to more great summer days at London Business School. 

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A proper cup of coffee in a proper coffee cup

Inspired by their shared love of coffee, two entrepreneurs who met on the Sloan programme in 2012 decided to take their passion for caffeine to the next level. London Business School speaks to Jonathan Strauss and Andreas Bӧs about going into business together with Deviehl, a luxury coffee-cup company.

Why did you do the Sloan programme?

J.S. It had been 25 years since I graduated – but after spending most of my career in the luxury watch industry, it was time for a change. I felt a fair amount of trepidation about immersing myself in a programme like this. But it offered the opportunity to reflect on the specific drivers and motivations that were important to me.

What sparked the idea for Deviehl?

J.S. We are both coffee enthusiasts but with different areas of expertise. We were chatting over an espresso and a cappuccino when the idea for Deviehl dawned upon us. We wanted to develop cups to match the high-end coffee machines available and the luxury experience that drinking coffee has become. With Andreas’ engineering and my watchmaking background, we set out on a journey to develop “The Perfect Coffee Cup”.

A.B. My career has focused on product innovation roles with mid-sized companies. It’s an environment in which you lead, but there are limited opportunities to learn from others. After the company I was working for was involved in a takeover, I decided it was time to catch up with the latest technology, research and management techniques − business school was an obvious choice.

How has Sloan shaped what you are doing with Deviehl? 

J.S. Faculty expertise has been invaluable. The School’s Innovation in Luxury Business Plan competition gave us access to an amazing network, including the Editor of the FT’s How To Spend It magazine and the MD of Harrods, which we now supply. 

A.B. It’s one thing taking on the technical side of things, but another having full responsibility for starting and managing a new company. The Entrepreneurship Summer School elective was a fantastic experience involving conducting research outside Selfridges, asking people their opinions on products and services, generating ideas and formulating business plans. It sounds obvious, but ensuring entrepreneurial success is all about people. I learned a great deal about leadership and motivating people on Sloan.

And what did you learn about yourself? 

J.S. I’ve always been quite entrepreneurial but even so, it was hugely enabling to realise that I no longer wanted to work for anybody else. Sloan gave me an understanding of my own strengths and weaknesses and the confidence to believe in myself and my ideas. It broadened my strategic expertise and thought processes, but the real revelation was working with inspirational people. 

A.B. At the start, I was very focused on inventing something; now I see entrepreneurship in a much broader context that centres on value for the customer and for the company. 

What challenges are you facing with a product aimed at the luxury market? 

A.B. In the luxury arena, one has to be very careful about how one treats people and the materials used. Everything today is about pricing, but I believe it’s time to return to longer-lasting, handcrafted goods.

J.S. Building a business is tough. Business today is fast and flexible, it’s a rollercoaster, so it’s paramount to develop the right team of people to achieve your objective. We want to build an environment where everybody has more responsibility and more fun. Success depends on managing people and taking them on the journey.

Find out more about the Sloan programme

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How is tech changing the way we do business?

Gary Hamel, London Business School Professor

We are in a world of amazing complexity. The dilemma is that as complex as our organisations have grown, as fast as the environment is changing, there are just not enough extraordinary leaders to go around.

Brian McBride Chairman, ASOS PLC CEO

To survive the next decade, the Amazons, Googles and Facebooks – and smaller businesses, too – will need to put mobile at the heart of all their strategies.

Sarah Wood, Unruly Co-founder and COO

It's hard to compete with friends and family [on social media]. For brands that are serious, paid media is the solution; don't post and pray.

On 24 June, we will bring together Hamel, McBride, Wood and many more high profile individuals from a range of sectors to discuss how we should respond to challenges and opportunities in this era of unprecedented technological innovation and change.

Learn more about the Global Leadership Summit. Follow the Summit on Twitter: #2014GLS

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World Cup fever: why an England loss will wipe billions off the stock market

The World Cup will spark a huge range of human emotions, from the excitement of victory to the despair of defeat. The effect of football results on national mood is so strong that it can spill over into the stock market and cause swings of billions of pounds.

Research has shown that a country being eliminated from the World Cup leads to the national market falling by 0.5 per cent on the next day – controlling for everything else that might drive stock returns. Applied to the UK stock market, this translates into £10bn wiped off the market in a single day, just because England loses another penalty shootout.

The study also revealed  that the football effect is stronger in the World Cup than the European Championship and is stronger in the elimination stages than the group stages. It’s also stronger in football-crazy countries like England, France, Germany, Spain, Italy, Argentina and Brazil.

Read the full article on Business Strategy Review

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New Global Masters in Management Programme

We are very excited to announce the launch of the Global Masters in Management programme, a double business degree, which will be studied at London Business School and Fudan University, Shanghai.

Growing demand for aspiring business leaders with real experience of China and the West is behind our new partnership that will prepare young people to run global organisations in both hemispheres.

Continue reading the story. Visit our Chinese site.

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Your team needs you, but can they trust you?

Whether you are an out-and-out, front-line leader or a consigliere leading from the shadows, you need to be trusted by everyone around you. To determine your degree of trustworthiness, answer the following seven questions.

1. Do you have a signature strength with which you are identified as a leader?

A.Yes

B.No

2. Can you or your followers point to a visible demonstration of that strength within the last week?

A.Yes

B. No

3. When you take to the stage do:

A. Your people know you will cover your organisation in glory?

B. Your people’s buttocks tighten in anticipation of embarrassment?

4. Have you:

A. Kept all meetings and met all deadlines for agreed actions this week?

B. Cancelled a meeting or failed to follow through on an agreed action in the last week?

5. In the last week, have you:

A. Kept your cool in a difficult situation?

B. Flown off the handle more than once?

6. Think of a recent example of care for your staff.

A. Was it a selfless act without a hint of photo opportunity?

B. Was it  deep down because were you out for No.1?

7. Do you give people your undivided attention?

A. Yes

B.  I give my attention, but regularly peek at my Blackberry

If you answered mainly As…You are the kind of leader with a high Trust Quotient,  whose competence is unlikely to be questioned, and whose strengths are apparent and respected.You can also be trusted to be good to your word and your people. In the TQ stakes, though, you are only as good as your last meeting so deny yourself any self-congratulation

If you answered mainly Bs… You may be blessed with great talent but this is not yet obvious to those around you, and you seem to be winging it in the leadership department. To drive your Trust Quotient north, you'll need to commit to deed and action, calm down and stop being so easily distracted.

Richard Hytner's new book on leadership 'Consiglieri: Leading from the shadows' is available to buy now.