The opening up of an inquiring mind is certainly one of Scotland’s greatest strengths. Our universities and research institutions are increasingly recognised not only as the combustion engines of value creation but big businesses in their own right employing thousands.
And the sub-set called “post-graduate business education” – often eyed with suspicion by condescending liberal arts intellectuals – is not only a valuable earner but a matter of national economic significance. Commerce remains the heartbeat of Glasgow, so you would expect the city to have a vibrant business school – and it does.
Strathclyde Business School – in the centre of the city – is a place of “useful learning” where tens of thousands have had time out to reflect on the world of management.
The dean is Professor Susan Hart, a very compelling academic who firmly places her footing on the planks of that shaky rope-ladder bridge which divides academia and everyday business.
“We pride ourselves in our status,” she says, sitting in her book-lined Cathedral Street office. “We have built up our contacts with commerce and industry and enjoy close partnerships. That’s the way to go. There is a lot of added value in our programmes. It’s to do with management education, including learning material from industry. We have industry practitioners delivering modules on learning.
This is all supported by our teaching and research staff.
“To be a successful manager, there is ‘knowing’ and then there is the skillset that you have, which is the ‘doing’, then there is also the awareness of being a manager; that’s the ‘being’ part. We are very much about helping the individual explore this.” Scotland’s business schools are attached to our seats of learning, which makes them a different kind of beast to INSEAD, IMD or IE Madrid which are discrete and privately well-funded organisations.
“We are very clear on what other business schools are doing,” says Hart. “We keep our eyes and ears open regarding the ‘competitors’ and the international competitors.
We have to know what are the norms in the places that are ranked the best.” If Strathclyde Business School was a standalone company it would have an annual turnover of around £30m, with its single biggest outlay being the intellectual capital inside the brains of its teachers and researchers. While Susan Hart is primarily an academic, she is also the managing director of a “business” which requires leadership and direction. It is interesting to track the path of the professor and see how she ended up running our top business school.
Indeed, her academic life has come full circle. A pupil at Bearsden Academy, she arrived at the Rottenrow campus, gaining a degree in French and Marketing from the arts faculty. After graduation, she went to work in France, working at the Universite de Technologie de Compiegne (UTC), 45 minutes by train north-east of Paris, and where the First World War Armistice was signed in a train carriage in 1918. She worked as a translator working on several engineering projects which helped build her technical perspective – and vocabulary.
Hart had gone to work with a colleague who was introducing a novel approach to teaching English, based on a more experiential and natural acquisition of language, rather than the deeply-dull ways of plodding through grammar. This style of teaching was then sold to schools and colleges in France.
But a job working for Procter & Gamble as a sales representative based in Glasgow, lured her back to the UK. This was the tumble and spin of real business – selling laundry products such as Ariel, Daz, Surf and Lenor to the supermarkets, with Asda emerging as a major force in the UK, and Safeway still owned by the Americans.
It gave her an insight into how brands were sold. Susan Hart enjoyed the sales life but, in the mid-1980s, saw an interesting opportunity back in academia working on a research project about “product deletion”. She was reunited with a former tutor, now at the Athens School of Economics and Business Science, and her research led to a PhD and then a lecturing job at Strathclyde.
She explains: “This was to do with how companies might improve their ‘deletion’ process, because typically companies build up their product portfolios and they innovate and introduce new products and new lines, but they are generally poor at getting rid of the older products.” One of the big barriers for business was the lack of accurate data to make informed decisions. “This has been transformed with computer technology today and the data that we collect,” she says.
“In the mid-1980s, I was working with Honeywell on some air conditioning lines. They were bringing in new air-conditioning and air-cleaning units for hotels, restaurants and cafes in Europe. But there was an issue of timing.
Once you start bringing in new products, you had to downsize the supply chain, yet there were major customers who might be dependent on the older products – this might have been a lifeline to that customer.” “Honeywell, in common with the other companies I had previously researched, had difficulty making this decision and then implementing it.” “Logically, you had to clear out the portfolio to be able to make space for new products, including managerial time to market your new products,” she says.
“But there are practical barriers to doing this.” While the global fast moving consumer goods companies (FMCG) – such as Nestles, Unilever, P&G, Heineken – have managed to tier their product categories and the way they market these categories into “super”, “national” and “regional” brands and then resource the marketing, it is always much more difficult in business-to-business markets where the markets are narrower and fragmented.
“They have much more in the way of small clusters of key buyers,” says Hart. “Whenever you take out a product from your range, the issue is that the overheads of that product have contributed to the bottom line, and this is now split among the ones that are left. This can reduce the profitability of a business.” She recalls conducting practical research for a UK sweet manufacturer which was cutting back on several well-known chocolate bars. One of the stumbling blocks was that they were all made on the same production line.
“The problem was that none were particularly big sellers, but if you took one off the production line, the others would become less profitable because the overheads would be shared across two products instead of three.” Decisions to kill off a product were delayed – and because they weren’t being resourced, the problems got worse. Even choosing to delete the wrong product can jeopardise a whole business, such as Coca-Cola with its New Coke in 1985. This was a devastating example of how “product deletion” can backfire when the customers don’t want the change.
“While this has been overcome in FMCG and mass market, it is less so in business to business and remains an issue for companies today,” says Hart.
“I’ve recently been working inside firms where it is apparent they have unwieldy product ranges.” Prof Hart has also looked at product life cycles and how the consumer is regularly being encouraged, cajoled and even bounced into purchasing the latest gizmos.
“Product life cycles across all kinds of categories have been shrinking for years, but so too have product development cycles.
For example, it might have taken 24 months to bring a new digital printer from concept to market, now it’s taking 12 weeks, and that’s not a new statistic.” For companies, she explains, it is a matter of keeping the product lines manageable and not just allowing a proliferation of products because it is possible and easy to do so.
“From my time at P&G, product proliferation was astonishing. You can go to a supermarket shelf and look at the laundry products. There are 25-30 brands, but essentially there are two or three major companies making it. The big companies are offering different products for what they say are different segments of the market. Taking the laundry products, there are many brands on the shelves and all the different markets segments are perceived to be covered. But the theoretical question for me, as an academic interested in marketing, is: ‘Are they all truly targeted at different segments and to what extent do organisations proliferate products to cover all kinds of eventualities? And what is the cost of that if the segments are not distinct and are all of the new products better or just different?’” Most FMCG businesses now have a version of sales and operations planning (S&OP) which helps improve sales and marketing capabilities by deploying across-the-business teams from various departments in unified operations.
This can improve top-line growth by 7-15% and increase the success of new product launches by 25%. These are exactly the kind of issues that a busy business leader doesn’t have time to consider; and this is where a business school scores. “Reflection is important for us,” says Hart.
“We have a suite of modules that we teach that are called ‘The Reflective Practitioner’. It is constant questioning of what you are doing and not simply accepting the way things have been or the way they will be in the future.” Susan Hart went to America and worked as a lecturer in Penn State University teaching marketing and doing post-doctoral work in the 1990s, before taking up international appointments in Australia at Griffith University in Brisbane and Murcia, Spain. After returning to Glasgow for a while she was offered a professorship at Heriot-Watt University in Edinburgh.
“Everyone was very keen to look at research assessments,” she says.
“The first big assessment exercise in Scotland happened at the end of 1992 and everyone was very keen on publications and I had a lot of publications because I was focused on my research. I had been doing my teaching and work with executive education programmes.
In the early 90’s, the academic world was focusing on research assessment, so people with a strong track record in research were much in demand.” This, coupled with the applied and practical nature of Hart’s research, meant a lot of work came her way. She remained at Heriot-Watt for three years, playing a part in the creation of the Edinburgh Business School, linking its full-time MBA to the distance learning offering, which was selling fast. She was then offered another position at the University of Stirling’s Faculty of Management, travelling from her home in Glasgow. She says: “I was very briefly head of department but in 1998 I was expecting my second child, Allan, and a job became available at Strathclyde. I was very happy at Stirling. It was a very strong and active place, and we were very productive in the marketing department. But with two young children I wanted to be nearer to home.” She arrived back at Strathclyde in 1999 when the business world was in the grip of the dotcom explosion. There had been an MBA programme at Strathclyde since 1966, and it was recognised as being one of the oldest in the UK.
“I joined the department along with a number of others and it was extremely well-run,” she says.
“But I stood for election as vice-dean on the research side, because I felt we could be doing more to promote the school’s collective research. I knew people from across the business school and I felt we weren’t making the most of our ability to promote the totality of what we were doing as a collection of researchers.” Strathclyde has a wealth of expertise in accounting and finance, economics, management science, human resources and marketing. Prof Hart felt there was a depth that was not being properly presented to the outside world. This was at a time when it was clear that business at large needed a more converged understanding of business principles. Her inaugural lecture was about marketing metrics and how to evaluate the success of spending on bringing products to market.
“As a Business School, we were now able to look at performance management from a number of different academic perspectives and that was significant,” she says.
“Then we had the Hunter Centre for Entrepreneurship, funded by Sir Tom Hunter, but entrepreneurship doesn’t just happen in one department. The centre was spearheading research and the dynamics of behaviour and results but we had others looking at it from the perspective of financing for entrepreneurs.
You can’t be an entrepreneur without understanding your marketing, so they have to be closely related.” By 2005, there was increasing confusion about the positioning of Strathclyde Business School and the Graduate School of Business founded in the 1990s which ran the part-time and international MBAs programmes. The solution was one front door – which is the University of Strathclyde Business School – offering MBAs and masters qualifications. Professor Hart became the Dean of the School in 2008.
“An MBA is a good product for a university to have,” she admits. “It brings in post-graduate experience and links to business and industry. There are loads of excellent leaders and managers who don’t have MBAs, but on the other hand, those with the qualification have become more prevalent in the corporate and business world.” Strathclyde’s full-time MBA is international with 18 different nationalities in nine international centres, including Hong Kong, Singapore, Malaysia, Switzerland, Greece, Bahrain, Dubai, Oman and Abu Dhabi, with a new development now being rolled out in India. The fees for an MBA are variable. London Business School is now charging £53,000 for a two-year programme, while Strathclyde Business School charges £23,500 for a one-year, full-time MBA programme. The school is also launching a new MBA - the MBA 25 - which has been designed and will be delivered in collaboration with William Grant and other Scottish businesses.
Then there are the specialist masters programmes, which at the business school are all “premium” products including an MSc in marketing, international management, and business information technology, all at £12,000 for a one year course. Strathclyde Business School has around 600 postgraduate students from overseas every year with a further 1,200 in centres around the world.
“It is a very internationalising experience,” says Hart. “People tend to focus on one or two areas of business, like accounting or sales and marketing, human resources or general management, and detail of a business doesn’t get properly absorbed. What an MBA does is give a more general perspective of all the elements that are intertwined with managing a business.” Prof Hart says Strathclyde’s focus it to help people become better managers.
“It’s about learning to manage and learning to lead. For this there are two important elements – you need to understand the nature of the business you are in; and what are the competitive and distinctive advantages that you have, and it’s about how you interact with people to make the most of that and to exploit it across the markets. It is a personal learning programme that people have to go through.” Strathclyde’s MBA students have also introduced the MBA Oath, which was pioneered at Harvard University.
“We are very focused on sustainability and social responsibility,” says Hart. “Within Strathclyde Business School, in every department there are researchers and academics who are looking at an interrogation of the status quo all the time.
They are not passive observers of what happens in business without the capacity and the voice to criticise and that is important for our teaching and research.” “Partnerships are important for commercial organisations and really we run the business school as if it is a commercial organisation.
“I’m running a business here. I’m also running it as part of Strathclyde University where I sit on the executive board.
The principal Jim McDonald is the big boss, and the four deans sit with him, the Vice Principal and the other senior administrators on the executive team.” All decisions have to be approved by the University Court, the external monitoring body, and the Senate, which represents the academic interests.
Meanwhile, Prof Hart’s colleagues have been sifting through candidates for the International Leadership School in Scotland which begins its first programme in January.
A decision to close the Scottish Hotel School several years ago was controversial, so the ILSS is an ideal partnership between Strathclyde, Cornell University in New York and École Hôtelière de Lausanne in Switzerland.
It pools the expertise of Cornell in asset management of hotels and Lausanne’s international reputation for culinary and hotel-keeping excellence.
The International Leadership School in Scotland will be chaired by Peter Lederer, chairman of Gleneagles Hotel, with David Cochrane, chief executive of the Hospitality Industry Trust in Scotland, taking on the role of chief executive.
For Susan Hart, this is exactly the kind of collaboration between academic and pure business that will help raise the bar even higher in Scotland’s key hotel and tourism industry – and ensure that links between the ‘knowing’, the ‘doing’ and the ‘being’ are suitably entrenched in business life.