Focusing on Expertise for Business Impact
ESMT European School of Management and Technology, the Berlin-based business school, was famously founded in response to German big business’s concern that the country did not have any business schools ranked amongst the top 200 schools internationally. So in 2004 the new school opened its doors, having received over €100m in endowments from 25 of the largest German companies.
As the ESMT strapline has it, they are ‘the business school founded by business’, and while the importance of rigorous academic research underpins the faculty and program work, that ethos of having a clear business impact as its focus is part of their DNA. The ‘clean-slate’ opportunity of an entirely new business school coupled with the generous funding gave ESMT a rare chance to build an institution with some very specific objectives in mind.
Foremost amongst these as Christoph Burger explains, is the dual emphasis on German business expertise, but looked at from a European perspective. “We are the European School of Management and Technology, not the German School” Burger notes. The main topic areas the school focuses on are all arguably German areas of expertise however: ‘leadership and social responsibility’, ‘European competitiveness’, and the ‘management of technology’. The social responsibility aspect of leadership is well understood as an area Germany leads on, as is competitiveness and technology.
Christoph Burger has been a member of faculty at the school for most of its existence, having been involved with the establishment of executive education at the school since 2003. Reflecting on the dearth of business schools, as opposed to finance and economics faculties of which there are many, in Germany, Burger suggests that this is partly cultural but also has a financial element to it. Culturally, the strong influence of engineering in German industry tended to draw the best candidates, and management was seen as something that could be developed from the skilled engineer and not the other way around; this coupled with the public provision of universities diluted any great move towards creating profit-generating business schools in previous decades. With public budgets being squeezed this situation is less clear today, and revenue generating education is now becoming more attractive amongst the universities. That said, ESMT is a non-profit making institution, but is able to create surpluses on some of its activities, of which executive education is a key driver.
Historically the school has had strong connections not just to German industry but also to the German government and the European Union. Its second President, Lars-Hendrik Roeller came from a position as Europe’s first chief competition economist of the European Commission, and left ESMT to be an Economic Advisor to Chancellor Merkel. The current President of the school, Jörg Rocholl, sits on the advisory board of the German Federal Finance Ministry, and also advises Martin Schulz, the President of the European Parliament, so connections and understanding of the European and German administrations are strong at the school.
As Christoph Burger explains, this is important as one of the principal focuses for the school is that of European Competition and one of the main markets for the school are companies and participants who come wanting to gain insights and better knowledge of how business transacts in Germany, and particularly in regard to how German organizations interact with the rest of Europe. Germany’s position as the economic powerhouse of Europe, with a commanding lead over any other country in the manufacturing, sustainable energy and technology industries makes it a magnet for those wanting to learn how to leverage that expertise and know-how.
The ESMT clients fall into three key pillars says Burger: the foreign clients, the hidden champions and large firms such as those that founded the school. Attracting foreign clients from around the world who are seeking introductions into German industry, is a significant business. “There is a huge demand in understanding how to manage change” says Burger “so many industries are being disrupted these days, banking, manufacturing, automotive; and companies around the world are really wanting to see how the leaders in these areas are evolving and coping with this disruptive environment. We are able to help them see these places and explore some of the mechanisms and best practices to enable continual change to be effected.” Burger continues “it is not just managing change that they come to discover – we have a series of senior executive programs that focus on corporate governance, and we get a lot of interest in that from clients outside of Europe too.”
The second of the three market pillars Burger mentions, the Hidden Champions, are those mid-to-large firms that are the mainstay of German industry, that often operate with high levels of technical expertise and reputations for precision and craftsmanship, but by being predominantly business-to-business companies are largely unknown outside of their own sectors. They are often still family firms or ones that have only recently expanded out of family ownership and come with their own particular sets of challenges around fast expansion, and quickly changing markets, as well as internal issues around managing changes in the workforce and leadership styles. One of the school’s strengths here is its expertise in bringing technology to market from a strategic perspective.
Burger’s own research specialisation for instance, is in the energy sector, where he has put together the ‘ESMT Innovation Index – Energy Supply Industry’, which measured innovation activities of 16 major European utilities. In addition to expenses on research and development (R&D), patents and research areas, the Index also covers indicators for process innovation, in particular the utilities’ performance regarding productivity and sustainability. Burger has also written a book on ‘The Decentralized Energy Revolution: Business Strategies for a New Paradigm’ which provides first-hand insights of how sustainability and economy can be reconciled – and how agents of change successfully develop the blueprint of a decentralized energy future.
This is the kind of deep knowledge and expertise that client companies are keen to avail themselves of at ESMT, whether it be from the energy experts or experts in other areas. For this reason the school, is firmly focused on the research its faculty generates. This research, Burger stresses, “must have an impact at both corporate and societal levels – and not just at the academic level”. With research centres for Leadership Development Research, Sustainable Business, and Tech Entrepreneurship as well as the Center for Financial Reporting and Auditing and a Digital Society Institute, and dedicated Chairs for Innovation, Sustainability, Governance and Compliance, Competition and Regulation, and European Economic Integration – the school is seeing its core research expertise strongly aligned around its three topic areas.
There was a time, not that long ago, when business schools were nervous about promoting themselves on their specialist expertise too obviously. The standard position schools tended to adopt was that they had strength in depth across all the main management and business sectors. Even those schools which were publicly associated with specific topic areas, be that finance, marketing or other areas, were keen to bolster their credentials in operations or leadership say, so as not to appear weak there. This led to a confusing marketplace for potential clients, where all providers seemed to be jacks-of-all-trades, and identifying core expertise became a nuanced process. Today we are beginning to see a clear move towards the championing of specific strengths at specific schools – and ESMT’s focus on leadership and social responsibility, European competitiveness, and technology management is a bold and healthy example of this.
This article was first published in Developing Leaders: Issue 22
This is not to say that the school does not have excellent faculty and knowledge of other management topics, for there is an inevitable interconnectedness between all aspects of business systems – and competitiveness and technology require understanding of operations and finance too. But the focus remains in these three areas for the school – and it is looking to build these out for a wider international audience of clients in the coming years.
Though ESMT is still a young institution it has some powerful benefits to its name already. With its location amidst the entrepreneurial and innovation buzz of Berlin, and strong links into both the German and European administrations it is able to draw upon some of the key drivers of European and international business for the twenty-first century.