New recipes for business
Innovation and efficiency are the two key ingredients for success, the dean of MIT's management school David Schmittlein tells Thai CEOsDavid Schmittlein, dean of the MIT Sloan School of Management, was in Bangkok last week, where his advice to Thai CEOs was to look beyond global macro-economic issues for new business opportunities.
Schmittlein, who has been the MIT business school dean for the past five years, said innovation and efficiency are the two most important factors driving the growth of businesses and industries.
During his Bangkok visit the dean met several Thai business leaders and alumni, including Chartsiri Sophonpanich, president of Bangkok Bank, and Charumphorn Sotikasathien, president of the stock exchange.
"In Thailand and other countries, the biggest risk that many CEOs face is thinking that the macro economy defines the opportunities. It doesn't. Things that define the opportunities are efficiency and innovation.
"If you have efficient operations, and innovation that creates real value for consumers, there are opportunities in any macro environment. Look at the CP Group, which is doing well in China even though China is slowing down," he said.
On the macro front, there are now big challenges from the euro-zone crisis and the slow US economic recovery.
"These challenges are not going to change overnight, so businesses and governments need to make sound decisions that are going to take effect over multiple years and in some cases even a decade or more from now. It would be too optimistic to expect quick solutions to the euro crisis.
"Some aspects of the solutions, like belt-tightening and budget balancing, will take place over the next five to 10 years. In the US, growth has returned but it's slow, while unemployment has come down, but not quickly.
"The big issue in the US is the uncertainty over the public sector, tax regulation and other policies, including the 'fiscal cliff' [potentially triggering huge tax increases and spending cuts early next year]. As a result, businesses are waiting a little bit."
"In Asia, there are however great opportunities shifting within the region. Some of the manufacturing jobs are moving away from higher-wage countries like China to lower-wage countries. If you look at the Asean countries and integration which is coming, there are great opportunities for companies in this area."
MIT has dozens of prominent alumni in Thailand's private and public sectors, and last year the Boston-based institute last year began cooperating with Thailand's Mahidol University to offer a joint programme on management.
According to Schmittlein, the most important aspects of business education today include innovation, new business models evolving around the world, technology and how the digital economy affects business.
"You also have to deeply understand systems, analysis, finance and the likes. Those are the two strengths of MIT Sloan. In terms of learning by doing, I can give you the example of our students here in Thailand who are working with PTT, Siam Cement Group and CP Group on challenges such as entering new markets, technology and sustainability.
"When they come to Thailand and work closely with Thai company leaders at least for a month, they can see how the concepts they're exposed to in Boston translate into the real issues that companies here are experiencing.
"We also have similar programmes in other countries such as Vietnam. Typically, we have 15 to 20 students in Thailand annually."
"In our MBA programme, there are about 400 students and most of them get engaged in these action-oriented programmes. About 20 years ago, management education looked the same everywhere.
"Now, schools are doing more different kinds of things. For those who are interested in innovation, we urge them to look at MIT. Innovation, leadership, sustainability, big changes in business models, analytics, finance, risk analysis are among our strengths."
At MIT Sloan's rival Harvard Business School, the focus is more on case studies and debates, while Stanford Business School uses a variety of methods, including case studies and lecturing.