Prisma Reports (PR): Switzerland is the world’s most innovative economy, according to a WIPO study, and has been holding the position for 8 years now. Interestingly, in the latest WEF ranking however, published October 17th, Switzerland has lost its top seat to the US. What is the Swiss recipe for such success, and what are the determinant factors to maintain the country in such positioning?
Jean-François Manzoni (JFM):
Although Switzerland had a slight dip to #5 position in 2018 in our own IMD Competitiveness Ranking, it has held the second position in three of the last four years and remains an extremely effective economy, particularly in terms of government efficiency and infrastructure. From a business efficiency point of view, Switzerland scores also very high, even though we observe intense competition worldwide from a number of actors that are energetically pursuing new business models and new industries.
The Swiss governance model is mostly based on cooperation and collaboration, and to some extent compromises. This multiparty system makes it harder for governments to make bad decisions and brings us positive opportunities. On the flip side, it can also make it more challenging to introduce rapid change.
Switzerland has fantastic infrastructure and a great education system. It is very safe, very effective and efficient. It is also engaged in a race without a finish line for competitiveness. Having spent five years in Asia between 2011 and 2016, there is a clear sense of edge and intensity in Asia that we don't always observe in Europe.
Being in the Top 3 worldwide is extraordinary but it is difficult to maintain. Nevertheless, Switzerland remains a very innovative engine and a vibrant economy. I must repeat, however, that the competition worldwide is intense. Prices in Switzerland are high, which on the positive side forces organizations to be even more productive. One employee in Switzerland has to be as effective and efficient as two or three employees in other countries for the same cost. That creates a constant pressure on organisations that represents both a challenge and an opportunity.
(PR): IMD is one of Europe’s foremost business schools, expert in developing leaders and transforming organizations to create ongoing impact. You train over 8,000 executives from 98 countries each year. How would you evaluate your contribution to Switzerland in terms of education and development?
We think of ourselves as a school with Swiss roots and a global reach. Our main campus is in Switzerland so our roots are Swiss, but we have also an outpost in Singapore and we have been operating all over the world for decades. So we are resolutely international in our outlook and reach.
IMD was created through the merger of two schools that had initially been sponsored by Nestlé and Alcan, so our roots are strongly connected to economic activity. As we developed in our early years we often worked with Swiss organizations that were expanding out of Switzerland, developing first in Europe and then the world, and so we also grew with them.
Our core mission is to develop leaders and to transform organizations, and to do so in a way that also hopefully creates a positive impact on society. Innovation is a critical platform to reach this objective, and will be even more so over the coming years as society must cope with significant employment reduction in a number of job categories. This transition is inevitable, it is coming and there are a number of scenarios in which it may be severe and quick. At organisations’ level, as well as at countries’ and the world’s level, we will need more innovation to stimulate other sources of activity and value creation in order to reuse some of that manpower. Innovation will also be ever more critical to companies in an environment and age where everything can be copied. If you want to thrive in an environment where everything's going to be copied, you have to continue to innovate. Consequently, we need to sponsor and to nurture more innovation to create other sources of economic activity.
We contribute by working with executives and organizations, helping them improve their individual and/or their organizational performance in areas such as innovation, dealing with the digital revolution, becoming more agile, or operating across boundaries as organizations becomes more regional or global. We propose to executives a number of programs that we call ‘open programs’. These programs gather executives coming from several organizations to discuss issues that we have selected. We also design and deliver “customized programs” for organisations, where executives all come from the same organization to discuss a set of topics jointly selected with the organization. In both types of interventions, our role is to help leaders to be and to remain as effective and as efficient as they can be in a world where the standards are rising every day. We help them to question their own practices and their beliefs, because “what got them here” will likely not be sufficient to guarantee their future success.
(PR): Your open Executive Education programs have been ranked #1 in the world by the Financial Times for the last 7 years in a row; IMD has been ranked TOP 3 in executive education worldwide. What are the key fundamentals that explain such success and reputation?
(JFM): For most business schools, executive and organizational development represents only a minor part of their activities, but for us they represent 80% of our activities/revenues. In fact, even our degree programs involve experienced managers, as our MBA students are 31 years old on average and our executive MBA students are 40-something years old on average. So working with executives and organizations is our “core business”, and that’s probably one of the reasons why we are very good at it.
Secondly, we are an independent business school. We are not a component within a larger University that would exercise constraints on us. Everything we do is decided and done for this business school. As a result we are probably more agile and more focused than many other academic institutions.
Thirdly, relationships and context are extremely important to us and form key pillars of our approach. We believe that we understand the context of executives and organisations better than most because of our accumulated experience and expertise. We are also a non-profit-organisation, which probably helps us to have more courageous conversations with our clients. We can genuinely engage in conversations with organisations and leaders with a high degree of honesty and objectivity–that is a great asset. Last year we decided to change our tag line to Real Learning, Real Impact. That was a message to executives and organizations, but it was also a strong message for us internally. We must strive for impact every day, in all our activities. And we are delighted and proud that this year five of our programs received an award for excellence and impact.
(PR): What’s unique about your research programs and approach?
(JFM): One of the hallmarks of academic institutions is the pursuit of rigorous research that meets a number of criteria. This rigor is important to increase the likelihood that findings from the research will be potentially effective and useful. And all of us at IMD have been trained to conduct this kind of research.
But at IMD we also care about three additional properties of the research: Is it relevant? That is, do or should managers care about this topic, now or in the foreseeable future? Is it insightful, i.e., as opposed to quantifying the obvious, is this research leading to some counter-intuitive or surprising insight? And is it actionable, i.e., can managers put these recommendations into action? A lot of academic research suffers from an excess of rigor and a deficit of relevance, insightfulness and actionability. We strive to strike a better balance between these 4 qualities.
(PR): : IMD is a very global establishment, with a branch in Singapore, and bilateral agreements with other academic and research institutions around the world to foster collaboration in education and research. Tell us about IMD’s international relations, alliances and networks. How are you working to maintain and develop international collaboration and institutional partnership?
(JFM): On the research side, academics often cooperate with colleagues from other institutions, but they typically do so on an individual basis. We don’t need an institutional agreement to co-author a paper with a colleague based half-way around the world.
On the program side, IMD used to be un-enthusiastic about alliances. We tended to think that it was simpler to do things by ourselves. One exception was a partnership with MIT on a number of Open programs. We still have one joint program with them to this day. In the meantime the world has changed and we have come to appreciate the value of partnerships, in terms of effectiveness (together we can do things we could not do by ourselves) as well as efficiency (together we can do things quicker &/or at a lower cost than by ourselves).
When looking for potential partners we started by looking close to us. We are very fortunate to have next door EPFL, one of the best engineering schools in the world. They too were keen to collaborate with us and together we launched a new executive development program called “Transform Tech”, where in the morning you meet EPFL professors who explain a technology, then you meet startups that use that technology, and then in the afternoon the IMD faculty helps you understand how to leverage it best in your company and industry. We are also developing a growing cooperation with ECAL, a great Design school also located in Lausanne. We also partnered with CERN to bring executives there.
We also started looking beyond our immediate surroundings to identify possible partners. For example, we launched a joint Open Program with the Moscow School of Management Skolkovo. On the Custom program side we partnered with Yale to design and deliver a great senior leadership development program for the Indian-based multinational Mahindra. And we are discussing other potential international partnerships, for both Open and Custom programs.
(PR): What are some of your most important collaboration with American corporations
(JFM): In general, America is not the market where we are the largest or strongest, as it is already well equipped with schools that have this strong national market. When we work in the U.S, it’s typically becausean America-based organization has a strong desire for an international point of view, or because we are working with one of our international clients and they ask us to support them in the U.S. America is not necessarily the place where we're best known.
Looking at international organizations, we work with over 100 every year so it is hard to choose which one to discuss. Also, some of them are more explicit and public than others about the work we do with them. But let me take a few examples:
- We are currently working on a large intervention for Lufthansa, involving hundreds of executives from all over the world. In Thailand, we work with Siam Commercial Bank to support them on their digital transformation program via three coordinated programs aimed at different groups in the organization. Modules involving the top 100 involve more face-to-face time and support, while modules aimed at middle managers feature more online material and contacts. In the Sultanate of Oman we have been working to prepare the next generation of CEOs for a country that is actively working on diversifying their economy beyond oil and gas.
- We have been working on a fantastic intervention with Mars Pet care, where we helped them to evolve the way they were thinking about their business from pet food to pet health to pet care. This evolution led to investments beyond the initial core and to significant changes in the management team’s organization and focus.
- We also work with a company called Hempel. Every year, the top management team comes to IMD for a week of strategic thinking and reflection. Alongside the Top 15, they bring 10 up-and-comers and we design a week of discussions and reflections to help them re-think their business during the week. At the end of the week they make decisions that will have implications for years to come.
(PR): Tell us more about the IMD run Startup Competition. How is IMD stimulating local entrepreneurship and start-up development?
(JFM): We run this competition every year. It helps us to identify about 30 start-ups that we will then help over several months. Some of the start-ups will be helped by our MBA students, the others by our Executive MBA students who will bring them to Silicon Valley to look for funding. The start-up competition is definitely one of our contributions to the local ecosystem .
(PR): What is your strategy to attract student talents and cooperation?
(JFM): We have to differentiate MBA students, executive MBA students and executives we work with in Open or Custom programs. These are three very distinct groups.
Focusing on “full time” MBA students, IMD has a very distinctive positioning. We propose “an intimate, personalized leadership development experience delivering an unmatched emphasis on entrepreneurship, global and digital - while equipping participants with the classic MBA toolkit.” The intimate and personalized component is possible because we have kept the program relatively small with 90 students per class. These 90 students benefit from our considerable connections with the business community all over the world.
Still, we – like all business schools – are facing an increasing competition for outstanding students, where one of the competitive weapons is financial aid. If you're a great potential student and you apply to school A and school B, at some point you will ask yourself ‘how much is this going to cost me?’. If school A offers you significant financial aid, they become an even more attractive option. Obviously other factors also matter, including the quality of our research, of the education process and our overall reputation. But clearly we must also have an ability to compete on the financial aid front. That is one dimension on which we are working with our Alumni to be able to more scholarships in order to attract excellent students who may otherwise not have the financial capabilities to pay for the program. The competition for EMBA students are a bit different because the EMBA program attracts older students – early 40s on average -, and the program shares many characteristics of Open executive development programs, where we are very well known and consistently ranked at or near the top in every ranking.
(PR): What is your final message to our readers?
(JFM): We do not think of ourselves as a Swiss school. We think of ourselves as a school with Swiss roots and global reach. All over the world, the brand Switzerland is synonymous with high quality, technology and innovation, professionalism, cooperation and neutrality, and I think we are benefiting from this image as well.
We are also fortunate to have achieved a high degree of strategic clarity: We know who we are - an independent business school founded by business executives for business executives -, and we are charting a distinctive path for ourselves, one that differs from other business schools and from professional service firms. On that path, we strive to be the trusted learning partner of choice for ambitious executives and organizations worldwide.
(PR): How would you convince readers that Swiss banks are operating in a fully compliant and transparent manner, demonstrating a high level of integrity?
(UR): This one of our strengths and we should talk more openly about it. In Switzerland, banks operate in a compliant manner and have high conduct and ethics standards There is generally a high degree of client satisfaction and we have a good story to tell.
(PR): What is your final message to our readers?
(UR): If you haven’t yet experienced Swiss banking, you should definitely try it. I am convinced that you will recognize the difference.