A few weeks before the French presidential election it was appropriate to ask Peter Todd about the anti-globalization rhetoric that has characterised so much political debate recently, and to ask what business can do to restore trust in the global economy, while not alienating local stakeholders.
“The reality of the global economy is here to stay, but the challenges it creates for populations are here to stay too and something we have to learn to deal with,” says Todd, who was soon to be discussing the impact of anti-globalization and how global business education can be an antidote to economic nationalism, with other the deans and directors, at The Global Network for Advanced Management’s annual meeting at Yale University.
“Even if trade creates net benefits to the whole of society in the aggregate, it doesn’t serve you if a whole bunch of people are left out,” says Todd, “so business needs to work harder to develop socio-economic diversity.” He believes, that business schools and HEC Paris in particular can play a positive role in this area. The school has students from 90 different countries, with over 50% from outside France, and it is dedicated to creating an environment that fosters global understanding and has students that live that reality.
“Business schools cannot solve these problems alone; but if each takes on one or two projects that help create openness and motivation it will enable people to see the opportunities that can come from globalization,” he says. HEC has as one of its core purposes the advancement of social responsibility, which is exemplified by work it does in the community, for example going back into lycées and preparatory schools to assist their development.
Peter Todd is new to HEC Paris having joined as the first ever non-French Dean, in September 2015. A Canadian, he was previously Dean of the Desautels Faculty of Management at McGill University in Montreal, where he led a transformation in the faculty’s budget by developing self-funded Masters programs and significant fundraising efforts.
HEC, which is based at Jouy-en-Josas on the outskirts of Paris, was founded in 1881 as a Grande École and has over the past 136 years progressed from being the leading graduate business school in France to being one of the most prestigious business schools in the world. Bernard Ramanantsoa, who led the school for 20 years prior to Todd’s appointment, did a great deal to focus the school internationally and to cause it to be ranked by the FT as the best business school in Europe seven times between 2006 and 2013 and second between 2014 and 2016.
In December 2014, the school moved from being a department of the Paris Ile-de-France Chamber of Commerce to having only affiliated status. This new independence presents a great opportunity for the school’s future development and a challenge that Dean Todd will clearly relish. His vision for the future progress of the school revolves around three key themes: digital transformation, entrepreneurship, and social responsibility; all underpinned by a focus on internationalism – delivering value to the business community worldwide.
Social responsibility is not only about the school in the community as described earlier, it is about HEC Paris’ work in building ethically responsible companies to boost economic change and social good. Nobel prize winner Professor Mohammed Yunus, Co-president, HEC Paris Social Business/Enterprise and Poverty Chair, believes the impact for ‘good’ that business can have on society is potentially huge. At a time when unethical business behaviour is rarely out of the headlines this initiative is much needed, and according to Todd fits with the aspirations and attitudes of the generation of students now at the school. In practical terms, it has led to the launch of new executive education programs such as the ‘Inclusive Business and Value Creation’ program, run in partnership with Danone, Schneider Electric, and Renault, to create effective social entrepreneurs and intrapreneurs who can add value for people ‘at the base of the pyramid’.
Todd is unmoved by the bad headlines saying “Good news doesn’t sell.” Although there have been many well publicised scandals, looking at the overall picture, the business community has become increasingly aware of its social roll. He sees more and more that companies take a 360O perspective on business. This may be partly due to regulation and to market forces as customers demand social responsibility, but it is also because companies and their stakeholders see that social cohesion requires business to be about more than just the bottom line. In evidence, Todd mentions a recent meeting he had with a bank where 80% of the conversation was about diversity and social good.
Another key theme for HEC is to address the challenges of digital transformation. This is an initiative that Todd, as an expert in information systems and organizations, is well placed to lead. He has over 40 published works on information technology and innovation management which have received more than 15,000 citations and has led degree programs, executive education and applied research programs in management, innovation and information technology for over 25 years.
Todd is cautiously optimistic about our digital future, although he admits that “Prediction is a fool’s errand.” Asked if business will be able to harness the exponential advance of digital technology to offer positive social benefits or whether it will just be bigger profits for the tech giants and more income inequality, he suggests that although the tech giants may continue to grow, the balancing benefit will be a significant growth in the opportunities for individuals
Big incumbent organizations are right to be concerned about the ways technology is disrupting the business environment. “Creating the next new thing is more accessible today and so there is now a lot of bottom-up innovation,” says Todd, “If we consider the profound changes seen over the past 20 years the next 20 will see even more change and disruption.” Yet this in turn will bring the opportunity for new business models, for example the growth of the ‘sharing economy’, new types of jobs, and new roles. Todd mentions the hospitality industry as one that has recently been disrupted by technology (and by people under the age of 26). The beneficiaries of this disruption – take Airbnb as example – have been individuals at the expense of incumbents.
In opening up opportunities for individuals and addressing the future, entrepreneurship, Todd’s third key theme, will be essential. HEC has a long history of supporting entrepreneurs. This emanates from its original ties with the Paris Chamber of Commerce and its culture of learning by doing and being close to companies, and is personified by Pierre Bellon the 87-year-old founder of Sodexo whose career began with a degree from HEC.
In recent years, initiatives promoting entrepreneurship have multiplied – from the HEC Incubator for start-ups to mentoring entrepreneurial ventures for stock market floatation. The school runs a range of programs and workshops on innovation and entrepreneurship, and entrepreneurship is now a core part of its EMBA program, which includes a module called the ‘Entrepreneurial Mindset’. This chimes with the broader start-up ambitions Todd says he sees today. He notes that “Ten years ago only 10% of students said they aimed to be entrepreneurs – now it’s 25% including almost a third from the EMBA program,” and that “When the school launched its business start-up incubator in 2016 it had room for 20 – and had 100 applicants. This year there have been 200 applicants.”
When he arrived, Todd was surprised to find how many start-up businesses were being launched at HEC, being more familiar with start-ups coming from a science or tech base rather than from a business school. He was further surprised, having roughly traced the performance of HEC start-ups since 2007, to find 70% were still going strong – this in a sector where a 10-20% success rate is the norm.
As a stand-alone business school, not attached to a university, HEC is actively exploiting opportunities for creating learning that is across disciplines. It has for example developed a Masters in Data Analytics with the École Polytechnique, where the first year is spent at the engineering school focusing on the “math and the methods” and the second year is at HEC learning how to capitalize on this knowledge, “putting the technical and soft side together.”
Considering the opportunities for executive education at HEC, one trend Todd identifies is a move towards engagement with mid-sized organizations. HEC is ranked third (behind only Harvard and Stanford) for the number of alumni holding a CEO position in Fortune 500 Global companies. Although the development of senior executives in large global corporations will remain a big part of the school’s focus, Todd sees a growing desire from students for variety – either to become entrepreneurs in their own right or to seek meaningful work with mid-sized companies, NGOs and organizations that can offer a lot in terms of opportunities to learn and develop. On the executive education side the school currently delivers 20-30% of its programs to mid-sized companies and demand from this sector is growing.
As well as being a theme for client delivery, digital transformation also presents opportunities for the school itself and its pedagogy. The challenge will be to keep the sense of “high touch” in the digital world. In this area, Todd plans to lead rather than follow as be believes “Now is not a time to be too conservative.” The school has appointed two new digital officers to develop its technical capabilities and has also taken the big step of creating the first ever fully online international degree program, the online Master’s in Innovation and Entrepreneurship, in collaboration with Coursera. To be run from September 2017 this program has proved to be immediately popular with 30 applications received on the first day after launch.
Although the digital era will undoubtedly bring more diverse entrants into the executive education market, Todd believes that business schools are well placed to meet this new competition, due to their access to knowledge through research. “In the context of digital development schools that are research intensive are going to have certain advantages,” he says “Research and our knowledge production has to be increasingly a source of differentiation. The technology can commodify the teaching – so where do we produce what’s unique? – our talent and intellectual capacity become more and more important.”
A specific challenge Todd sees for the HEC ‘brand’ is to be recognized as the truly international business school it is. He mentions a discussion he had recently with Coca Cola who had not engaged much with HEC previously because they saw it as ‘very French’. Not that being very French is a bad thing, it is misplaced as a description of HEC, as nearly 70% of the school’s professors are non-French as are 50% of its students, and 70% of its teaching is in English. HEC also has a wide network of international partnership and delivers its programs around the world. 40% of all executive education programs are delivered with international clients and more than 50% of the programs are delivered outside France – for example, the Executive Certificate in Innovation and Social Business is run in South Africa and India, the Executive MBA is delivered in 14 locations and the Executive Master in Strategic Business Unit Management is run in Abidjan, Doha, Noumea and Paris.
The continuing development of international business is a major focus for HEC, and Todd sees a growing demand for executive education coming from the Middle East, Asia, South America and in Africa.
He also sees significant potential for growth at HEC in the delivery of custom programs – an area in which the school is strong and where its international reach is important. As companies put more and more focus on return from their executive education, by getting close to companies and, while retaining a high touch, offering more flexibility and elements of digital delivery there is a substantial growth opportunity for custom programs, particularly internationally.
As the first non-French dean of HEC, Peter Todd comes exceptionally well qualified to take this highly respected international institution through the next exciting stage in its development, to help it take on the challenges of our disrupted business age, with the ambition to deliver real value to business, to society, and to the global economy.