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Rethinking the Business Models of Business Schools

RETHINKING THE BUSINESS MODELS OF BUSINESS SCHOOLS

Business educators closely observe disruptions in other industries, but what have they done to address disruptions shaping their own? “While the world of business has been changing dramatically, the world inside business school continues in the same manner and tradition as it has for decades,” write Kai Peters of the Coventry University Group and Richard R. Smith and Howard Thomas, both of Singapore Management University. They argue that, in a so-called “VUCA world” where volatility, uncertainty, complexity, and ambiguity rule the day, business schools that hold too tightly to their traditions of research, classroom-based teaching, and brick-and-mortar campuses could be in trouble. As the authors explore new business models for schools of all types—public and private, mid-tier and elite—they ask provocative questions for readers to consider: Do great instructors need PhDs? Could virtual learning environments replace physical classrooms? To be sustainable, the authors conclude, business schools must “create a new future for themselves”—no matter how difficult it might be to let go of the past. (Emerald Publishing Limited, US$54)

Reverse Innovation in Health Care

REVERSE INNOVATION IN HEALTH CARE

What can save the U.S. healthcare system, which in 2016 accounted for 17.9 percent of the GDP? Vijay Govindarajan of Dartmouth and Ravi Ramamurti of Northeastern University think the answer lies in India, where innovative medical facilities provide high-quality but ultra-affordable healthcare. How? For one thing, these facilities are guided by the overarching goal of healthcare for all; they “target the rich to drive up quality and margins, and target the poor to drive up volume and motivate cost reductions,” the authors say. These facilities also distribute assets through a hub-and-spoke design, enthusiastically use technology, implement continuous process improvements, and promote cost-consciousness. Govindarajan and Ramamurti believe these approaches could—and soon will—work in other parts of the world. They write, “Innovations created for large, low-resource, emerging markets have a powerful potential to transform and even disrupt business models in the United States and other first-world countries.” The authors take an in-depth look at seven Indian and four American organizations that exemplify the healthcare of the future. (Harvard Business Review Press, US$35)

Infinite Desire for Growth

THE INFINITE DESIRE FOR GROWTH

Daniel Cohen is fascinated by “the extreme malleability of human desire, which is prepared to consume boundless riches to find its place in the world.” Cohen, of the Paris School of Economics and École Normale Supérieure, traces the insatiable drive for more through the entire course of human existence. He starts with the evolution of homo sapiens, touches on the invention of agriculture, and examines the different paths taken by Europe and Asia as they expanded, industrialized, and developed complex economies. Meanwhile, he brings in concepts from science, religion, and philosophy to explore how attitudes changed toward wealth, well-being, and acquisition. “Is economic growth intrinsic to humankind?” he asks in chapter one. As he takes readers on an utterly absorbing journey from the wheel to the iPhone, he answers the question with a resounding yes. (Princeton University Press, US$24.95)

Reinforcements

REINFORCEMENTS

People find it difficult to ask for help, but in team-driven workplaces, we can rarely complete tasks on our own. “If you are a leader, you need to figure out how to elicit and coordinate helpful, supportive behavior from the people you are leading,” writes Heidi Grant, a social scientist at The NeuroLeadership Institute and an exec ed teacher at Columbia University. “Arguably, that’s what management is.” For instance, she explains that most people simply won’t notice when someone needs help, so they won’t volunteer their aid; but if that person makes a direct appeal, even strangers are likely to say yes. People are also less likely to help if they think plenty of others might step up to the task, so a group email asking for assistance is less likely to get a response than one-on-one calls or messages. “Human beings are, much more often than it seems, wired to want to help one another,” she says. The key for managers is understanding the “small, subtle cues” that trigger helpful responses. (Harvard Business Review Press, US$28)

Money Well Spent

MONEY WELL SPENT

“Hundreds of millions of philanthropic dollars are squandered through donations to organizations that have no impact whatsoever.” That’s the blunt assessment of Stanford’s Paul Brest and environmental policy leader Hal Harvey, who recommend that donors apply key businesses principles to the concept of philanthropy before giving money. They identify the essential steps of developing an investment strategy: clarify the problem, understand the needs of the beneficiaries, understand the root causes of the problem, articulate the intended outcome, design a plan, and seek feedback. Often, they note, these steps are not as straightforward as they seem. For instance, if donors want to address AIDS/HIV in sub-Saharan Africa, whom will they target—those who are already infected and need curative drugs, or those who are at risk from contracting the disease and would benefit from preventive measures? “You can’t define the problem without describing the intended beneficiaries of your potential solution,” write Brest and Harvey. Their smart approach helps donors make maximum impact. (Stanford Business Books, US$29.95)

Future First

FUTURE FIRST

Today, all the talk of business is about innovation—but to be truly innovative, companies can’t just streamline processes and invent new products, says consultant Alice Mann, who is also a lecturer at Columbia. They need to tackle three of the wicked problems that will profoundly impact the global economy: climate change, which will push companies to invent clean energy solutions; resource scarcity, which will force them to develop new manufacturing methods; and changing demographics, which will require employers to redefine how people work. The “future first” businesses that will succeed in this chaotic environment are committed to one or more of five practices, says Mann: They embrace sustainability as an innovation challenge; focus on the future, not the present; create solutions that synthesize opposing ideas; rely on transparency and values in their decision making; and seek solutions that can have impact outside their own walls. “Seemingly intractable problems are the ultimate test of innovation,” she writes. “They force businesses to think creatively about huge challenges.” (Routledge, US$22)

The Pan Industrial Revolution

THE PAN-INDUSTRIAL REVOLUTION

When Richard D’Aveni looks ahead, he sees way past the 4th Industrial Revolution. Instead, the Dartmouth professor expects the future to be shaped by “pan-industrial” behemoths that “link and adroitly control hundreds of thousands of business processes, creating unprecedented efficiencies and opening up opportunities to create businesses with levels of flexibility, diversification, and size unheard of in the past.” These businesses will be built around or enabled by additive manufacturing (AM), of which 3D printing is just the most well-known example. AM is already being used to create everything from clothing to houses to fighter jets—in less time, at lower costs, and with fewer environmental impacts than traditional methods. Add in the fact that AM products can be easily customized, produced on-site, and quickly updated, and you have a formula for wholly overhauling today’s supply chain. AM can solve global problems like homelessness, he notes, by allowing cheap prefab housing; it also might lead to darker consequences like rampant unemployment. One thing D’Aveni is sure of: The future of AM is almost here. (Houghton Mifflin Harcourt, US$28)

 What's Your Digital Business Model?

WHAT’S YOUR DIGITAL BUSINESS MODEL?

Are you prepared for the massive ways digital technologies will disrupt your industry? The companies that flourish most in the future will be those that wholly embrace the digital revolution in one of two business models, predict Peter Weill and Stephanie Woerner of MIT. They will become either omnichannel organizations, such as banks and energy companies, with integrated value chains that “create multiproduct, multichannel customer experiences to address life events”; or ecosystem drivers, such as Amazon, that run a coordinated network of services that deliver value to everyone from suppliers to customers. In either of these models—where both risk and reward can be phenomenal—businesses must have a deep understanding of what their customers want, how they buy and use products, and what problems they’re hoping to solve. “We see the trend moving toward individual and business customers preferring only one, or maybe two, powerful ecosystem drivers in each domain,” write Weill and Woerner. The secret for businesses is to become one of those preferred providers now. (Harvard Business Review Press, US$32)

 

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