Panel 1: What Is Next in Management Education?
Glenn Hubbard, dean of Columbia Business School
Garth Saloner, dean of Stanford Graduate School of Business
Nitin Nohria, dean of Harvard Business School
Geoffrey Garrett, dean of the Wharton School of the University of Pennsylvania
Moderated by Jan Hopkins, former CNN anchor and correspondent, owner of the Jan Hopkins Group
- The anti-Wall Street sentiment of this political primary season only underscores the role of business as an arbiter of progress and improvement. “Many of the biggest social problems of our day are in fact management problems,” Hubbard said. “This is true whether you're looking at healthcare or [the] environment or energy,” Saloner added.
- Leaders around the world are increasingly looking to private and social enterprise — as opposed to government — to bring about change. “The public role of the private sector is probably going to be unprecedentedly large. Why? Because social needs are going up and government capacity to meet them is stagnant,” Garrett said. “The rising public role of the private sector is going to be a defining feature of our world going forward, which I think will increase the centrality of business schools.”
- Business schools have a responsibility to shape leaders who understand that it’s their job to help society prosper. “We really do have to make sure that when people think about business leaders, they think about them as people who are determined not just to do well for themselves but to actually do better for society,” said Nohria.
- Gone are the days of mass recruiting by a few big-name companies. “I think we're all evolving toward a world where there are many more [potential] employers and we can't rely simply on big-institution recruiting,” Hubbard said.
- In the years to come, only top business schools will survive and thrive — but business education will diversify. The panelists agreed that the value of top-tier full-time MBA degrees will increase — the ROI of an MBA from a top school was found to be more than 20 percent after just five or 10 years based on case studies done at Harvard, Nohria said — while the rest of the business-education market will broaden to include convenient non-degree, preparatory, online, and other nontraditional courses. “I think you will see a smaller and smaller number of schools providing the traditional MBA, but much more education outside the traditional MBA,” Hubbard said. Further, the top schools will invest heavily in virtual capabilities. “In a world in which the aspirant global middle class is going to increase by 1 or 2 billion people, there’s no way we can absorb that population on campus,” Garrett explained. “We can use technology as a way to provide affordable access to high-quality business education in a way that, to my mind, isn’t zero sum with what we do on campus.” “We're in the early days of figuring out the best use of technology, but it will disrupt us in ways that weren't foreseen,” Hubbard added.
- Entrepreneurship can be taught. “The process of entrepreneurship is common to most startups, and you can teach students about that process,” said Saloner. “You can’t necessarily teach somebody to have the large, revolutionary idea,” Hubbard added, “But that’s also not what most entrepreneurship is. Most entrepreneurship is identifying opportunity.” And it’s important to remember this applies globally as well, Garrett added. “I’ve been struck at how important innovation and entrepreneurship are in every country in the world,” he says.
Panel 2: The Changing Face of Global Business: Prospects and Challenges for the Next 100 Years
Robert M. Bakish ’89, president and CEO of Viacom International Media Networks
Fred Hu, founding partner at Primavera Capital Group
Ann Kaplan ’77, partner at Circle Wealth Management
Surya N. Mohapatra, executive-in-residence at Columbia Business School
Moderated by Wei Jiang, the Arthur F. Burns Professor of Free and Competitive Enterprise and director of the Jerome A. Chazen Institute for Global Business at Columbia Business School
- Digital technology opens global markets for both traditional and nontraditional media companies. “The best example is China,” Bakish said. “If you look at China pre–digital-distribution, essentially the market was closed to non-Chinese companies. Then one day roughly 18 months ago, we did a deal where, with the stroke of a pen, 380 million people were given access to the Nickelodeon library on demand in Mandarin. We went on to do a dozen such deals. It really has changed the market.” The ability to stream content online also allows media companies to expand their reach beyond paid-for TV and cable networks, Bakish added. This is critical in a global market, as the penetration of media companies through traditional TV networks is less than 25 percent in some countries, with it being well under 10 percent in places like Indonesia, for example. “You have the opportunity now to serve these homes in different ways and the principle disruptor there is the mobile networks,” said Bakish.
- Digital solutions are creating completely new ways for people and businesses to manage their money — and banks are trying to catch up. “Digital solutions are creating new ways for us to borrow, to lend, to invest, to organize our personal financial lives. [And] they are doing it in ways that we no longer need to deal with traditional investment banks and insurance companies,” Kaplan said. Given this landscape, it might not come as a surprise that in the past five years there has been about $25 billion in venture and equity capital investment into fintech startups, Kaplan said, while McKinsey estimated that the number of fintech startups has grown from 800 a year ago to 2,000 today.
- The world’s small and medium-sized businesses still have limited access to loans — but technology can help. In China, SMEs account for 70 percent of job creation, but only one out of every five small businesses has ever received a bank loan in its entire corporate history, Hu said. And this situation isn’t unique to China. Online payment service providers such as Ant Financial are cropping up to give businesses worldwide access to financial services. “I think it’s really a very powerful case study on how to use mobile Internet, big data, and AI to provide affordable financial services to a very large base of the population,” Hu said.
- Innovation is poised to transform healthcare into a holistic, end-to-end service. Right now, “Healthcare in the western world has nothing to do with healthcare; it has everything to do with ‘sick care,’” Mohapatra said. But everything is about to change. “The digitizing of medical records — whether it’s the diagnostics, or the imaging, or the surgery — [can be] connected to various systems using big data, predictive analytics. The convergence of various systems is happening: bio-sensors, nano-technology, the Internet of things, big data. Those are the things that are really going to change the way that healthcare is practiced.”
Panel 3: Value Is the Heart of Success for Business and Society: What Lies Ahead?
Russell L. Carson ’67, co-founder and general partner of Welsh, Carson, Anderson & Stowe
Paul C. Hilal ’92, founder of PCH Capital
Barry Hurewitz, global COO of UBS Group Research
Moderated by Trevor S. Harris, the Arthur J. Samberg Professor of Professional Practice and co-director of the Center for Excellence in Accounting and Security Analysis at Columbia Business School
- Successful shareholder activists increase the intrinsic value of the companies in which they are invested. One of the strategies that shareholder activists employ is to increase the intrinsic value of a company, with the belief that the share price will eventually follow. This typically means improving such factors as labor productivity, asset productivity, or capital allocation. It can be hard to get buy-in from boards and can take massive amounts of work and time, but it’s the duty of shareholders to catalyze the change needed to get these assets to perform at their peak.
- In the future, private equity firms will have more control over how long and in what capacity they invest in companies. The standard formula in private equity has been that capital is raised through limited partnerships with 10-year lifespans. In time, that will change to allow those who wish to be long-term investors to do so.
- Specialization of data will uncover more value creation opportunities. The amount of data available today will allow firms to have data analysis experts in everything from supply chains to employment pricing to climatology and hydrology. This specialization can help firms identify additional value opportunities.
- The biggest trap for value investors: complacency. There’s nothing worse than a management team that rests on its laurels. It’s imperative that leaders are always thinking about the next step.
- Investors should always remember that financial models work only as long as the conversation remains the same. As soon as a new issue arises or the debate about a particular sector shifts, the model no longer works. It’s therefore important for companies to incorporate different points of view at all times, so that they are continually prepared for many possible scenarios.