Last weekend I participated in the wedding ceremony of my cousin in Belgium, and during the service, a text was read that contained amongst others the "six most difficult words". And though of course this made reference to the marriage, it really revealed a number of things to me.
On my way there, I read in le Monde of April 24 a summary of a speech of David Schmittlein (Dean of the Sloan School of Management, MIT), that he held in Paris. He stated that the current crisis should be an opportunity to change the behavior of managers, and in particular to learn them to be more courageous. Courageous for him means implementing long term strategies. His speech went strongly against what is classically heard in Business Schools. He stated that we have thought for decenia that the goal of all good managers is the maximisation of the shareholder value, and the shareholders, of course, are very often just in for a short term profit.
In De Standaard (a Belgian newspaper) I read a funny title: "Mobistar disappoints: the results of the telecom operator are below expectations". But why is nobody writing: "Interesting news: the expectations of Mobistar are above reality"? There is of course no real reason to choose for the one or the other.
And in the same newspaper, Peter Vanden Houte expressed his worries for a "capitalism that would be too much controlled". Vanden Houte is chief economist of ING Belgium (that recently was saved from bankruptcy by the Dutch Government). He did admit that Greenspan ignored all warnings about the subprimes. But at the same time, regulation should be avoided. He claims that China's success in the last decade is due to the liberalisation; or is it precisely the fact that the central organisation (yes, it is still communism) is able to build the infrastructure and protect the investment of foreign companies? That is at least the opinion of managers operating over there. In the 60s, 40 millions of people would have died of starvation due to centralism according to him (or is it just due to a very classical orientation, that would have failed in any system?) With ING we are very happy with the much better salaries and working conditions that the current Chinese workers have (and by the way, 40 years later). I felt a bit back in the 90s of last century. That period is over, isn't it, and we are now trying to learn from our most recent crisis. Isn't the real risk for capitalism related to its inherent short term focus and the bonus culture, reinforcing this ?
Note that the Business Schools are in general very absent in the debate around the financial crisis, and the reason are the six most difficult words. But if we want to avoid the next crisis, we indeed need to deliver those courageous managers, that are able and willing to think in the longer term. We are sorry, we were wrong. And it is certainly not without reason that the Sloan School Dean says this.
Oh yes and he said something else very interesting. If the crisis invites to teach new strategies, it will equally change our way of teaching, with a real opening to the world (not just in the cases). A systemic approach, no ? Yet another difficult word.