What if we took a group of high performing managers from Canadian paper mills and placed them in the Hawassa Industrial Park in Ethiopia. Would they succeed?
Most of us think so. We believe that a large and important part of management experience is transferable across industries and borders. The Canadians know about industrial technology, production efficiency, employee relations, and more; and have well-developed problem-solving, leadership, teamwork, and communication skills. I asked this question to a friend, an expert in leadership and selection in the paper industry, and he insisted the Canadians would succeed “10 out of 10 times” as long as they respect the cultural differences and leave their “Canadian” ways behind. And, he added, “safety would expand exponentially.”
At the same time, we are keenly aware that local conditions have a major impact on success, even in industries in which processes are well-established such as in garment production. In fact, international companies operating in Hawassa have been plagued by a variety of problems. Efficiency has been stubbornly low and turnover persistently high. Since manufacturing employment is still less than 5% of the total, workers have little industrial experience and the attendant discipline. Tardiness and absenteeism are big issues. Workers earn low wages (the main attraction for companies) and, outside of the park, face inflated prices for basic foods and housing as well as many threats to their safety. For an excellent report on Hawassa, see “Made in Ethiopia: Challenges in the Garment Industry’s New Frontier” by Paul Barrett and Dorothe Bauman-Pauly.
Regardless of whether you answered yes, no, or maybe, your responses to questions like this one can reveal a lot about the work we’re doing at the Global Business School Network (GBSN). Since we were created by the World Bank 17 years ago, our vision has been for the developing world to have the management talent it needs to generate prosperity. We want to achieve that vision by “improving access to quality, locally relevant management and entrepreneurship education for the developing world.” As my experience grows with GBSN, so does my respect for the local relevance part of our mission. Here are three ways that we are prioritizing local relevance in our work.
We Need More Locally-Relevant Knowledge
First, we need more locally-relevant knowledge. Many of the business problems at Hawassa are a consequence of Ethiopia’s history and the development approach pursued by the government, which promised to build infrastructure, keep low wages, reduce red tape, and moderate ethnic tensions to attract manufacturers. So too, the solutions must fit the context. This doesn’t mean our models and proven management practices are not useful. Instead, it means our general concepts are more useful when combined with sharper insights about the local context.
At GBSN we want to increase the production and dissemination of business and management knowledge that is useful in and for the developing world. That includes increasing support for the development and distribution of more case studies featuring emerging economy companies and practices, as well as applied research on specific problems. See, for example, our small grant competition on “Finance, Cybersecurity & Risk Management in the Developing World” in partnership with The SWIFT Institute. We also appreciate working with organizations like the Case Centre and CABELLS in this efforts. Outputs of locally-relevant research can also take new forms, such as databases and software, and can be enhanced by more cross-border, inter-disciplinary, and industry collaborations. Unfortunately, the dominant research model for business schools doesn’t encourage such approaches, or relevance to practice for that matter. So GBSN has a responsibility to steward to the development of new research models for developing world business schools. And that’s why we support the Responsible Research in Business and Management initiative.
Importance of Local Context to Performance
Second, the importance of local context to performance suggests that GBSN should play a special role in supporting education that goes beyond content dissemination. Even globally-portable concepts and techniques are locally applied, and to do that well we need more experiential and peer-to-peer learning. This applies to both local learners and “global” ones. Both should develop a special kind of learning agility that enables them to apply what they learn in one context to solve a problem in completely different one. That’s why GBSN has an experiential learning steering committee and offers training in project-based learning for developing world faculty. It’s also why network members are collaborating to offer more student experiential travel opportunities, company-based projects, and case competitions in and for the developing world.
The Purpose of Research and Education Efforts
Third, the Ethiopia example draws attention to the ultimate purpose of our research and education efforts, which is prosperity for the developing world. Our work is less about spreading the experiences of Western business schools and more about working together towards this shared vision. Our work does not ignore the fact that what constitutes value can vary from place to place, just as physical geography, history, and culture does. It means social as well as economic development matters. It means growth that is inclusive and environmentally sustainable. So to generate prosperity our emphasis on local relevance is essential. After all, as I have been known to say, the Sustainable Development Goals will not be achieved through global leadership, but rather through local initiative.
I should note that questions like the opening one, in which we worry about the transferability of skills, have taken on greater importance with the Fourth Industrial Revolution. Many experts predict that the employment impact of AI and automation will be much greater in developing countries, where jobs (e.g., agriculture, manufacturing, business process outsourcing) involve more routine tasks and require little creativity or human interaction. Others point to a huge opportunity to cut new paths to prosperity which were not possible in previous industrial revolutions. Regardless, education and human capital development policies will play a critical role in the future of emerging economies.
Since we started with a question, I would like to close by posing another one that points to another priority on the GBSN agenda. What if we took a successful Tel-Aviv based tech entrepreneur and placed her in Mexico City. Will she be successful? We will explore that question in a future post.
Dan LeClair is the Chief Executive Officer at the Global Business School Network. Widely recognized as a thought leader in management education, Dan is the author of over 80 research reports, articles, and blogs, and has delivered more than 170 presentations in 30 countries.