Interview with Professor Christoph H. Loch, Dean, Cambridge Judge Business School

Feb 2021 Interview with Professor Christoph H. Loch, Dean, Cambridge Judge Business School

Prisma Reports (PR): I’d like to begin today’s interview with what might be considered “an elevator pitch” in the business world. How would you sum up the “essence” of Cambridge Judge Business School, and what makes it unique? What values and Ethos does Cambridge Judge stand for?

Christoph H. Loch (CL): Unique is always relative however, I will mention two things which make us special. Firstly, our entrepreneurial cluster. Cambridge Judge Business School, as part of the University of Cambridge, is the heart of one of the big entrepreneurial clusters and we are playing an active role in that cluster by helping new companies and small, growing, companies to thrive. The technical knowledge resides with the technologists and we help them to connect their ideas to markets and to understand that what they are creating in their entrepreneurial activities are not the applications of technologies, but businesses. To create a business, the technology is a tool, and you may even have to step back from doing the most state-of-the-art thing in order to have it become a business, and that is a switch in mindset which is something that does not always come naturally, and people need to learn. There is a methodology and a body of knowledge behind it and we can help these companies to do this. We help established SMEs and we help social ventures, and that is one element where we are not unique, because there are other business schools who are also doing it, but because we are in Cambridge there is a special leverage there.

The second thing where I would say we are unique as a leading Business School is our emphasis on impact. Business schools as academic institutions do research, to create knowledge, but the gap between academic knowledge and practical application is not trivial to bridge. We place specific emphasis on creating knowledge that has impact. I would claim that we have built that into our how we work in ways that are really happening, we are not only saying it. One example is the biggest management challenge for organizations in the 21st century, addressing the externalities between businesses and society. This specifically not only refers to global warming and climate change, but also inequality. Inequality in terms of Socio-economic inequality, gender inequality and racial inequality. The biggest challenges that business face in this century is no longer just related to how do I compete against my competitors, but how do I manage the position of the business in larger society. In the neoclassical ideology has become dominant in the last 50 years, businesses didn’t have to worry too much about it, but now we can no longer duck this. The world needs business leaders who can engage and look at their businesses holistically in the context of society and this is more important now than it has ever been. Some people are saying globalization is in the process of going away, especially because of COVID, but I think that is wrong. The world needs globally oriented leaders of organizations, more than ever, because we are now in the same boat, more than we have ever been.

(PR): The last 12 months have been a year like no other. The pandemic has disrupted and destructed on an unprecedented scale, putting even the most advanced economies under massive strain. You recently held a virtual roundtable about Leadership in time of Disruption, a very relevant discussion where great insights were shared. How would you characterize the experience navigating the school through the pandemic, moments of resilience and even new opportunities, especially in research, that have emerged during this time?

(CL): Clearly the COVID pandemic is a crisis and, in a crisis, you have simplistically two pieces, one is tactically strengthening the resilience of your own organization. In our case that means we need to take care of our students who are very stressed, for very understandable reasons. Some of them cannot travel here, they’re in in one of our programs but they’re sitting in another country and they’re worried whether they will continue to be able to participate in a way that gives them the education, the experience and the degree. Some of them are exactly the opposite, they’re stuck in Cambridge. They cannot go home, they’re stuck in student rooms, they cannot go out and they have to participate in education through zoom and so they’re also worried because it’s not a very positive situation. They’re all worried about their professional future. Thus, we need to continue to provide them the education as well as the networking and collaboration in a way, where they can see that they get the value we need to help them mentally, by giving them support.

The crisis also affects our own organization, because our own employees are in exactly the same situation and they have to continue to perform from their kitchen table, without being able to be in the office, all coordination and collaboration becomes harder. That’s one element of the COVID pandemic, the fact that everything is disrupted. When people work from home the networks are weakened. You can operationally continue to function for a certain amount of time, but because the networks get weaker, the ability to pick up ideas, the ability to innovate gets weakened and that is the tactical element of a crisis.

Second, the strategic piece of the crisis is the need to look at the threats and opportunities which are being created in your larger sector because, for example, some students won’t come anymore. Are there threats in that there such as market entry from players that you didn’t have to compete with in the past with whom you will now have to compete? But are there other opportunities in that you may be able to reach people whom you haven’t been able to reach in the past? Are there opportunities to offer an educational experience which is broader and offers value that you couldn’t offer in the past? There are threats and opportunities, and you have to think those through. You have to address both, if you only address one, if you forget to address the tactical, then you may no longer be there in two years, when the when the opportunities come to pass. And if you’re only tactical, then you will be left behind, because you will not go after the opportunities which are there. That is one characterization of looking at your institution in a time of crisis.

This is also our conversation with managers on leadership in a crisis. As the CEO of a company in that situation, you need to give your people reassurance for the short term, so they believe that their jobs are not going to end in two months because they will be fired, you need to enable your people to continue to work while developing opportunities. You need to do that to allow your organization not only to survive, but to thrive. Some companies are doing this very well, many are not doing this very well at all.

(PR): I’d like to talk about INNOVATION in this next question… which I’m sure we could dedicate hours to considering it is your focus area of research. How do you personally define innovation? Could you point out some of the catalysts or drivers of innovation that also help your students as part of the school’s vibrant Entrepreneurship Center?

(CL): My definition of innovation is anything that your organization does differently from the past, which is strategically relevant. One of the important pieces of this innovation is actually an absence of something. I haven’t used the word technology a single time because innovation fundamentally doesn’t have to be accompanied by technology. Technology sometimes enables you to do things differently and I don’t want to downplay technology because technology is behind the very big changes that we have made, but innovations in organizations may be centered more around your processes or your behavior. For example, one of the challenges and innovations here for our staff and students is that they need to behave in slightly different ways to become comfortable, for instance, to be able to socialize with people via zoom, which is hard: for example, you can’t embrace, and you can’t chink a glass. The distance is a little bit bigger and it requires you to get out of your comfort zone, in order to get to the benefits of networking and collecting knowledge. Sometimes the barrier in doing things differently, in ways which matter for the business, requires that people behave differently and that is the biggest hurdle. It has nothing to do with technology, obviously zoom is a technology which enables this, but then people need to change their behavior.

In that context, how do you get innovation into an organization? You need to have people who have ideas, but it turns out that most of the time organizations have people who have ideas. I have not yet met an organization that doesn’t have people who have ideas. The barrier is to allow the ideas to be voiced, and then to find the right filter to bring them in. On the one hand, if you allow all new ideas to come in, you’re in chaos. But most organizations err on the other side, they are too restrictive when it comes to ideas, and then people start self-censoring and no longer even express the ideas.

In the current work of way of operating helping people to overcome the barrier of changing their behavior, those are barriers which are as important as the barriers of the risks of new technologies, that may work or may not work. The barrier of your organization doing things differently than in the past, is a big barrier. One thing that the pandemic will do is that it will change the way we are collaborating together. It’s already 100% clear that we will work much more from home in the future, even when all restrictions are taken away and some people will say, “well, I can do all of my job from home” and then some managers will say “no, no, no, you can’t do that, then I don’t have control anymore. I don’t know what the people are doing.” In order to get that innovation in place, you need to help that manager to overcome his or her fear and that’s the barrier, it has nothing to do with technology.

We will have to craft a new way of our people working together in order to continue to interact enough to exchange ideas and to be colleagues who like each other rather than being distant agents who we don’t care about, while having enough coordination and control, and that’s a complex system. It requires finding a balance, and that will take us, once the restrictions are taken away, probably a year or so. It causes fear, because some people will feel they are left behind and some people will feel they lose control. That’s where the challenge is, it’s not in the technology and that is an innovation that we already know we will have to work through.

Some people find some aspects of this very, very attractive for good reasons. We have now seen certain things where we were absolutely convinced you had to do them by being in the office, it’s very clear that you don’t. So, we will have to engage, and it will make our organization better, if we do it with the right sensitivity and flexibility to people. But if you get it wrong, it may also cause some damage.

It is the same with teaching, it is already 100% clear that our teaching will change. Will it all go online? I don’t think so. Some types of factual courses will go online. However, what the leading business schools give their students, you cannot completely do online. We don’t know the answer yet to how much face-to-face contact is really required; it will take experimentation to get there. Now there are new markets being opened up, with people who could never possibly reach us, we can now serve online, a different offering than in the past. Our product portfolio will also change in ways we cannot yet fully foresee, but we have to engage, because otherwise we will fall behind.

(PR): Last year’s surge in demand for online education has given schools and universities a reason to further invest in disruptive technologies and develop their digital transformation. What are Cambridge Judge’s latest accomplishments in adaptive learning methods and how are you also equipping your students with the necessary skills to lead the ongoing technological transformation of corporations?

(CL): We have made an investment in pedagogy. We have created a number of fully asynchronous online modules where students can study certain topics at their leisure and that goes with some lecture material, some reading, some video material and some group work, which is supported by coaches. It’s a completely new pedagogy. It turns out that for some topics students really love this because it gives them a flexibility. It is valuable to know this. Whereas for other topics, the wrestling for collective discovery is absolutely crucial. As such, the prediction that all of this will just go automated online, and because it’s all automated online there will be a monopolization and that a small number of star professors will teach the entire world because these online things are infinitely scalable, I don’t think that will happen. Except for very narrow topics.

The other thing that we have done is we have created live online sessions, as everybody has, and that requires a change in pedagogy because in a live online session you cannot have the same approach that you have in the classroom. You cannot just talk for an hour; it’s impossible to listen. Hence, you have to “thin out” the raw content of what you do in the class, but students will learn more from interacting, so you have to have more discussion, rather than lecture. We have done this, with that the whole balance of the interaction changes.

Our lectures work in ways which seem to be okay. This is an ongoing process where we have just scratched the surface. Are, we doing this perfectly? The answer is no, we will all learn to do this better in the near future. We have created a number of additional courses in our executive education unit, we have changed the format of the lectures, and we have created online material that that delivers some of the lectures. We have had face-to-face instruction and we will try to go back to this as quickly as possible. However, in the short term, when you are talking to people through a mask, first you need to speak very clearly, people can’t see my mouth move so they don’t understand otherwise. And the student wears a mask too, you can only half see his/her facial expression, so you need to look him/her intensively in the face in order to understand their reactions, so even that is a change. You are asking me for accomplishments, I’m not sure whether I’m describing accomplishments, I’m describing a journey, of how we are adapting.

The end result of a change process for our students and staff of our pedagogy is new things will be coming out, some of which will be not so good, some of which will be so brilliant that they will irreversibly change the way we are interact with our students and participants. That’s what you need to look for and then you can change the character of your interaction with your students, in ways where you know the combined outcome will be something more powerful than we had in the past.

However, I cannot fully describe it to you yet because it’s still in emergence and that’s also part of innovation; nobody says, “here’s my vision and that’s what we’re going to do”. If innovation worked like this then it would be very easy, but it doesn’t work like this. You have to do this uncomfortable shifting and evolving and for a while you’re doing things which are kind of good, but not perfect (and you know they aren’t) and then, what matters is that in the end, you are looking at yourself hard enough and you’re willing to pivot. That’s the word that comes from our entrepreneurs and our Entrepreneurship Center, you need to be willing to pivot and say, “you know that didn’t work very well, that was wrong, but you don’t feel guilty, rather, you learn from it and you just do it better”, so we need to apply that to our own activities.

(PR): Cambridge Judge Business School has over the years forged well-established ties with the corporate world as part of its innovative and pragmatic approach to teaching, such as the relationship with Santander Bank. The school also nurtures its international alumni networks to provide support and mentorship to your students. In your opinion, what is the sweet-spot or “perfect equilibrium” between theory and real-life business?

(CL): We try in everything that we do to work with partners. For example, Barclays and Astra Zeneca are valued partners, but we have a number of other partners and of course other business schools do too. Businesses have a wealth of experience and different businesses have different experience. Managers can explain to you, this is how we did something in the past that worked. That’s experience and that’s very valuable. The limitation in experience is that if it worked for me, I don’t know whether it’s going to work for you. The experience of each bank for example may be different, Bank A may tell you, “this worked for us really, really well”, and Bank B says to you “this worked for us really, really well” and you look at the two and they’re different, even contradictory. That is the problem with experience; experience is the story of what worked for me in the past, but that doesn’t necessarily tell you why it worked.

Maybe, I think it worked because of my superior intellect, but in reality, it only worked because I’m a bully and I intimidated everybody else so badly that they did what I wanted them to do, and so I have a great experience and I give you a causal explanation, but that turns out to be wrong, because I am misattributing causality. I know I’m saying this a bit provocatively, but that is the limit of experience. If you have a great manager who gives you a speech and tells you to do this because that worked for me, you don’t know that, because you don’t know what was in the background, in the personality, in the unique context of that person that made it work, and if you try it, it’s going to fail. That is why you never know what you’re going to get out of an interaction with an experienced manager and this is not a criticism at all, that’s why you need causal explanations (or “theories”) that give you empirical evidence of what specific context it can work in (and where it might not work). If the context is different than this it will not work, then you need to do something else and here’s the reason why.

Theories give you causal explanations, that’s what we can bring to the table and that’s what we search to find. Sometimes, you need to do very careful studies, for example, in pharmaceuticals to know whether a drug works or not, where you give people a placebo comparing them to the people to whom you give the actual drug. If you don’t do careful comparisons, you don’t know what caused the difference. Theories have been overused because they go too far away from reality, and they become an end in itself, rather than a means to an end.

Our research centers work in collaboration with our clients in order to keep our theories close enough to reality so that we can say something that actually helps people. For example, our Entrepreneurship Center, or our Social Entrepreneurship Center. Our Healthcare Center helps the hospitals in East Anglia to plan their capacity, our Risk Center has helped to put a cyber risk policy in place and our Center for Alternative Finance are coding regulations, so they become AI-comparable across multiple countries. In our centers we discipline ourselves to work on topics that matter to people on the outside, where we are creating knowledge which is usable. We are looking for the sweet spot, just like everyone else, but if you can discipline yourself in your academic work, you can create causal explanations that people say, “yes, I have now understood something that previously I didn’t understand, so I can go more informedly back into my organization do something”, and if you can then follow up with these people, so you can learn from them, you can sharpen your own insights and have a greater impact

For example, we help SMEs to grow in our SME growth program, of which we also did a COVID version, which we call “resilience program”, which is specifically articulated towards small companies who are experiencing a very strong shift in their business because the business environment in COVID has changed a lot. We help them with some conceptual tools as well as with mentoring to adjust their strategies toward areas where they still see demand, and where they may even be able to grow. If their strategy isn’t working anymore, because the market has shifted with COVID, we help them ask, what is no longer working, where do they need to cut back in order to preserve cash, but where is there an opportunity that did not exist previously. We are learning from it and our partner Barclays is learning from it.

In our Healthcare Center, we are working actively with hospitals on how to teach their consultants, their doctors to understand the business imperatives under which the organization operates. In a noisy environment, which is what COVD is, how to plan capacity when capacity is scarce due to people being sick from COVID.

We’re also helping GPs in that Center to prepare themselves to take on bigger responsibilities, because that’s what the NHS will require GPs to do, because the NHS will no longer have the resources to do everything that they used to do in hospitals, so they will need to upgrade the managerial capabilities of GPs. They need to be larger, more professional organizations who can take some work away from the hospital. Not severe illnesses, where it’s actually possible to treat people without them ever going into the hospital which they didn’t use to do.

We’re also working with lots of startups in Cambridge and with social ventures too. These are some examples of what we’re working on, if you want to hear more, I can give you some.

(PR): Executive management education has become a constant in the business world, allowing corporations around the globe to invest in their talent in a more “outsourced” way. Tell us a bit about how executive education has evolved at Cambridge Judge in recent years and what exciting, new programs are now on offer or to be launched soon?

(CL): Let me start by making a more fundamental point, because you say companies like to outsource their talent development. Outsourced talent development is a market where you don’t only have business schools in it, there are other providers from a couple of different industries.

We are very happy to say, “if you want to outsource your knowledge training, we can do training for you.” However, I think that’s a very limited way of describing executive education and it’s limited in terms of the value that companies can get out of it. This is because generic training is almost now a commodity. Teaching people basic methods is important, but it’s no longer more than a very basic floor, the real power is not training, but managerial development. The learning of decision making and learning high performance functioning within your organization. Many companies are not willing to engage in this.

I will give you an example, a few years ago we had a conversation with a company. We made a proposal to them to do a certain piece of training of their personnel and we can teach you methods, but that’s not distinctive, if you really want value you need to make a bigger investment, by having your younger people work with your senior people in a way which is coached and mentored. They need to learn by doing, by just learning the methods you don’t get very much. You give them something to do and then we can teach them a method which is relevant, and we can teach you what it looks like when you apply it and you need to involve a senior person to mentor these people and the result will be a valuable piece of work, as well as people who have learned something. The company looked at us and they shifted a little bit in the chairs, and it felt so uncomfortable, risky and out of control for their HR people, that they said “no”. I think many companies act like this, and they are throwing 80% of the value away because 80% of the value is in that.

One company that I have seen do this really well is Huawei. Some of these newcomer companies from a different part of the world, where previously we would have said they are copying, they are not copying anymore. In their HR programs, people learn by doing. Most of the lecturers come from inside and they only bring in academics, like me, for a little bit to help them to do some special topics. But that forces their people to really learn because they have to apply it and to deliver something, as a result they learn much more. It’s disciplined because it has to be applied to the problem at hand, they get a direct output and people learn more. That is where the future is, but the bottleneck is not in the providers, the bottleneck is in the willingness of the companies to make the necessary investment, not monetary investment but investment in time and effort of their senior people.

To get the real value, the real barrier is that most companies are not willing to do it. They want to outsource training, and if you outsource this, you’re going to get low value because what you get is generic. That will always be a minority of the overall business many companies don’t have the resources to do this and many companies don’t have the willingness, so there is a market in outsource training, but that you know.Speaking as an individual now, and not as the head of my institution, it will exist, but it’s not very valuable and, frankly, I look at that as boring. What for me is interesting is to actually help companies to do something exciting, because the people get pushed to work on something that really makes a difference to the company and to help them do it; that’s more interesting, it’s an education and so it’s still different from what consultants do. It’s education with impact and that’s what I’m interested in and it’s where the high value part of the market will lie in the future.

Our Executive Education programmes enable clients and participants close access to our world-class faculty (all our programmes our academic developed and delivered) and also forge a reciprocating link between leading-edge research and the latest developments in practice, to enhance relevance for research and impact for our clients and participants.

Over the last year we have delivered programmes virtually (beyond the acceleration of the development of our fully online offerings) with the introduction of our Live Online delivery which makes innovative use of the technology to deliver programmes to remote participants in real-time, yet retain the quality and impact of a Cambridge management education experience – interactive, experiential learning, critical discussion and debate, rigour, small group learning, high quality engagement, attentiveness to learning and overall experience. This has been exciting to see.

(PR): This question will have a dedicated section on our website:   If you could choose anyone from history as your mentor, who would you choose, and why?

(CL): Lee Kuan Yew. He built Singapore out of nothing into a first world country. Which is what Cambridge Judge has done since 1990. (He did lose the ground under his feet at the very end, but what he achieved against superior aggressive neighbours is incredible). He did it all with continuity in one head of state, where we needed 3 generations of Directors, but we are on our way too.

(PR):Final message to the readers of Foreign Policy magazine?

(CL): It used to be enough to show to your board that your organization is competing well. But that’s no longer enough today. Businesses are causing wider effects on the society in which they operate, and they have to live and face up to a responsibility of that. That will be the theme of the next 20 years and people cannot duck this anymore.