The EFMD business magazine

The EFMD business magazine

six principles
Business schools and business itself are both facing a challenging future. But, suggests Dil Sidhu, there is much that business schools can learn from the business world in how to respond.

While business schools provide output for the business sector both in terms of graduates and research-based insights, much of the interactions between them is limited, such as graduate recruitment drives, research collaboration, and input through advisory boards and mentoring schemes.

There is, however, another insight that the world of business can share with business schools. Business schools can learn how to run their own “business operations” better to create lean, relevant and surplus-generating organisations that are in tune with the business community.

Like business schools, the business world is in a state of constant flux (with some sectors moving at a faster rate than others), and equally, there are many reactions to the rate of constant change. Some businesses choose to do nothing and hope for the change to dissipate and for former market conditions to re-emerge. This reaction often results in business casualties in terms of bankruptcy, market share erosion, wasted investments and shareholder dissatisfaction.

A strategist would call this process a failure to recognise being at the “top of the S-curve”. This can be illustrated in costly decisions such as Microsoft’s acquisition of Nokia and a subsequent write-down of a $4.2bn investment, Kodak’s denial of digital trends, Dell’s failure to recognise and capitalise on the tablet market and Blackberry’s market share erosion to smartphones to name but a few.

So what about business schools? What changes in our world are we ignoring that may eat away at our relevance? Is there a degree of complacency and denial when it comes to being at the top of the S-curve in our own sector?

Here are just five changes and trends that are reshaping the business school environment and, in particular, the provision of executive education services:

  1. The rise of corporate universities and academies
    There are more than 4,000 corporate universities and academies operating globally (up from about 2,000 in the 1990s). They are a rising competitive alternative to the traditional business school provision of corporate learning and development.
  2. The growing acceptance and development of MOOCs
    Although there are more providers coming online, the development of a meaningful business model has still not been discovered. However, online learning is a growth industry, and while employer acceptance may currently be a barrier to growth, this tide of change will result in major transformations in the development of learning and a channel to students in emerging markets.
  3. Alternative executive education providers
    From executive search firms, management consultancies, software providers and even the Financial Times itself in partnership with Spain’s IE Business School, the lucrative allure of executive education is creating a more crowded market where measurable outcomes are becoming more relevant than the branded business school providers.
  4. The increasing emergence of new high-quality business schools
    Many new entrants are coming to global prominence from places like India, China and South Korea. These new entrants are not only accredited but also feature high academic standards, world-renowned faculty, global collaborative partnerships, sizable home market advantages and the benefit of growing economies with related global prominence.
  5. The relevance of business schools to the provision of business people of tomorrow
    Recent criticism of business schools has included the perceived disconnect between what business schools provide as an output for business versus what businesses require. Anecdotal evidence of this disconnect is said to exist in the provision and embracing of “soft skills” for graduates versus the “hard skills” associated with business analysis, strategy formulation, and management formula and models. So what can business schools learn from business when facing such momentous changes? One key insight is how business utilises the science of influence and persuasion to help manage their journey on the road of change. The “science of influence and persuasion” refers to over 40 years of academic and field research conducted by the world authority on influence and persuasion, Professor Robert Cialdini, Emeritus Professor of Marketing and Psychology at Arizona State University in the US, and author of the best-selling book, Influence: Science and Practice. It is referred to as a science because it is backed up by decades of work in the fields of social and psychological research, which can be utilised to great effect when looking to effect change. The history of influence and persuasion can be traced to the days of the Ancient Greeks and Romans and the wide utilisation of “rhetoric”.At that time, rhetoric, a much-maligned word today, described communication which could influence the thinking and/or behaviours of others – usually to get someone to vote for you rather than an opponent.

    Over the past 70 years or so, social science, marketing and psychology have done a tremendous amount of research to understand why people behave in the way they do (whether choosing toothpaste brands, signing up to donate organs or selecting a business school programme) and what can be done to amend those behaviours and the choices that are made.

    Professor Cialdini’s premise is that while there are literally thousands of tips, techniques, hints and approaches to influencing and persuading others, they all fit quite neatly into six universal categories.
    These six principles of influence and persuasion are: reciprocity, commitment (or consistency), consensus (or social proof), liking, authority, and scarcity:

    • Principle 1
      As humans, we generally aim to return favours, pay back debts and treat others as they treat us. This can lead us to feel obliged to offer concessions or discounts to others if they have offered them to us. This is because we are uncomfortable with feeling indebted to them.
    • Principle 2
      Commitment or Consistency
      We have a deep desire to be consistent. For this reason, once we have committed to something,  we are more inclined to go through with it. This is especially true when the commitment is made in a “voluntary, public and active” manner. For example, you would probably be more likely to support a colleague’s project proposal if you had shown interest when he or she first talked to you about the idea. We are also more likely to support causes if we state publicly that we are behind the concept or the originator. It also relies on the old adage that people live up to their own values.
    • Principle 3
      Consensus or Social Proof
      This principle relies on people’s sense of “safety in numbers and what’s everyone else doing?”.Here, we are assuming that if many other people are doing something, then it must be OK. So when a company advertises that it is “the choice for 95% of the buying public” then it is probably good for us to choose as well. We are particularly susceptible to this principle when we feel uncertain, and we are even more likely to be influenced if the people we see seem to be similar to us. That is why commercials often use moms, not celebrities, to advertise household products.
    • Principle 4
      Professor Cialdini says that we are more likely to be influenced by people we like, who like us and who tell us that they like us. Likability comes in many forms – people might be similar or familiar to us, they might give us compliments or we may just simply trust them. Companies that use sales agents from within the community employ this principle with huge success. People are more likely to buy from people like themselves, from friends and from people they know and respect.

      In the business school world the impact of personable alumni and their personal success stories provides for a great sense of liking when looking to attract future students.

    • Principle 5
      We feel a sense of duty or obligation to people in positions of authority. This is why advertisers of pharmaceutical products employ doctors to front their campaigns and why most of us will do most things that our manager requests. Job titles, uniforms and even accessories such as luxury cars or the right electronic gadgets can lend an air of authority and persuade us to accept what these people say.
    • Principle 6

      This principle says that things are more attractive when their availability is limited or when we stand to lose the opportunity to acquire them on favourable terms.

      For example, we might buy something immediately if we are told that it is the last one or that a special offer will soon expire. However, within an academic setting the things that are considered to be scarce can include renowned academic faculty and specialist research. While the six principles are very powerful when it comes to the outcomes that can be achieved, they should be used authentically and ethically. Being authentic and ethical is a big part of being able to influence and persuade people by being truthful and honest about a product or service benefit. Persuading people to do things that are wrong for them is manipulative and unethical and many of the recipients of this approach will not only feel “taken advantage of” but become an anti-advocate. A good reputation takes a long time to build, but you can lose it in a moment! The world of business and commerce, and indeed the public sector, has used the power of influence and persuasion for many years to great effect. Whether influencing us to buy brand “X” over brand “Y” or persuading us to “conserve energy”, the principles of influence and persuasion are effective and can create a lasting behavioural change. Similarly, it can also work to help promote and market business schools.

The six principles

See more articles from Vol.10 Issue 01 – ’16.

Dil Sidhu is the Chief External Officer and Managing Director of Executive Education at the Alliance Manchester Business School in the UK and previously Director of Custom Executive Education at London Business School, also in the UK. Before that he held senior management roles in several leading UK companies. Sidhu is one of 25 people personally trained and mentored by Professor Robert Cialdini in the science of the six principles of influence and persuasion

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