/ 7 August 2009

Entrepreneurial times

Local and global economic conditions have reinforced the critical importance of effective leadership in South African companies.

These conditions mean that inevitably the shape of markets and segments have changed.Apart from people having less to spend, there is also an element of defensive consumption, which means that people are cutting back to preserve their resources.

The markets and communities that have been worst hit tend, sadly for South Africa, to be the poor, the economically marginalised and the less-skilled earners who have been working in mining and construction.

As these periods of downturn always change market boundaries and segments, it is critical that companies follow the principle that, if the environment changes, so must the strategy.

As important is the capacity to lead within the organisation to ensure that not only are the right people on the bus, but also in the right seats — that is, the right people doing the right jobs in the right way. There is a need for a great deal of emphasis on good leadership.

At the Gordon Institute of Business Science (Gibs) this year we have noticed executives are pushing harder for practical answers to the issues they are facing at the workplace.

This shift in emphasis has led Gibs to develop a Lean Series — executive education programmes to assist companies and executives in the process of developing leaders. In addition, the launch of our full-time entrepreneurship MBA, which has been in the planning cycle for more than a year, was coincidentally perfectly timed with the global recession and has attracted high-quality individuals who wish to start businesses.

It’s interesting to note that South Africa, for the size of the economy, has produced a disproportionate number of world-class companies, many of which operate both in South Africa and across the world.

In addition, we produce great entrepreneurs and it is our intention to grow that pool through the new MBA. This first generation of full-time students will be encouraged and helped to establish their own businesses during the course of the programme, which seems to be attractive to those with the energy and drive to make their way in an entrepreneurial world.

In line with the changing economic circumstances, the MBA design has also been shifted to reflect heavier focus on operations management and execution, which is appropriate for the current economy.

As there are so many business schools in the world, all of which are facing different conditions, it is difficult to say if adaptations to curricula are being implemented worldwide.

Given the financial crisis in the United States, it is interesting to note that schools such as Harvard have felt a need to develop a charter outlining the values and ethics they believe are appropriate in business.

It is a uniquely American tendency that their journalists criticise the MBA degree whenever there is a downturn. This is not the case in South Africa, where the popularity and importance of the degree continues to grow.

The MBA is — and should be — constantly exposed to scrutiny. Although the MBA has been recognised as the premier business qualification in the world, that doesn’t mean that it’s right for everyone. But for those who wish to play a leadership role in corporate life or grow their own business, it’s vital.

Professor Nick Binedell is the director of the Gordon Institute of Business Science