warwick business school alumni association magazine: summer 03

summer 2003

           Enterprising teaching at WB...
a message from the Dean of WBS

:                                                   across a range of undergraduate
first for WBS
                                                                                      An historical event too...
keynote lecture
An invited audience of faculty, alumni and        the simulation demonstrated that a range
doctoral studen...
enterprising teaching at WBS                                                                   Can entrepreneurship or ent...
David Tilles and Clive Gillmore
‘David and I both think our
                                          Management Sciences degrees from
shrewd investors continued:
multi-skilled team. For example, I can lead                         the market's boom and bust...
hedging your bets                                                                                       by Emily Fay

hot off the press
                                                                                          Members of the...
business alchemy:
 One of the main accusations hurled at
how to pick

a strategy to tip the odds in your favour
by Professor Tony Steele
Although we live in an uncertain world ric...
alumni out and about
 With events in Hong Kong, Germany,                awarded the WGAHK scholarship, the very
 Greece an...
launching a business in a
recess10n         steps to
                  Rupert Howell started his...
Nexus Summer 2003
Nexus Summer 2003
Nexus Summer 2003
Nexus Summer 2003
Nexus Summer 2003
Nexus Summer 2003
Nexus Summer 2003
Nexus Summer 2003
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Nexus Summer 2003

  1. 1. warwick business school alumni association magazine: summer 03 the money issue
  2. 2. summer 2003 www.wbs.ac.uk/alumni/nexus.cfm 7 8 11 13 Enterprising teaching at WBS Shrewd investors Hedging your bets Business alchemy news: WBS alumna Hedda Bird (DLMBA 1991–98) featured in the Financial Times on 11 February. Hedda is MD of 3C Training, which is pioneering a 14 How to pick a winner training course delivered by telephone. The pros 16 Launching a business 18 Building bridges and cons of the course were discussed in the FT’s 19 Career development INSIDE TRACK: A classroom by conference call. 22 Alumni adventurers For more information visit www.3Ctraining.co.uk Geoff Percy, (EMBA 1985–89) Chief Executive of Accantia, featured in the Daily Telegraph in early February and the March issue of Trailblazer magazine – Growing Business. According to the Daily Telegraph, Geoff is the man who put the ‘can’ diary in Accantia, which was formed as the result of a management buy out of the consumer business high praise from the Ambassador from Smith & Nephew Plc in June 2000. With sales of £94m last year, the Birmingham-based A feature on Warwick Business School entitled ‘The Wonder of www.wbs.ac.uk/alumni/ Warwick’ in Ambassador in December, included a graduate’s home of the Simple and Lil-lets toiletries brands perspective from Kevin Engelbretson (FMBA 2000–01) who now competes strongly with Proctor & Gamble in the MBA 10 Year Reunion works as business product manager for telecoms company 02. premier league. Saturday 20 September 2003 Radcliffe House reception followed by dinner at the Forest of Arden Hotel and Country Club Academic Update Seminar honours for alumni Congratulations to Lesley James (MAIR 1976–77) Saturday 18 October 2003 who was awarded a CBE in the New Year’s Radcliffe House Topic: Images of Strategy Honours list for services to the Partnership Speakers: Fund Assessment Panel (DTI). Also to Professors Karen Legge, Joanne Segars (MAIR 1986–87) Board Member, Lesley James John McGee, Robin Wensley, Occupational Pensions Regulatory Authority who and David Wilson. was awarded an OBE in the Queen’s Birthday London Evening Seminar honours list for services to the Pensions Industry. February 2004 WBS Annual Dinner Thursday 13 May 2004 IOD, London Philippa Norman appointed Genentech VP The appointment of Philippa Norman (MBA 1988–89, BSc Biochemistry regional events 1982–85), to vice president, Global Supply Chain, was announced in March by leading biotechnology company Genentech (NYSE: DNA) from their Regional events are also held South San Francisco HQ. In this role, she has responsibility for Genentech’s overseas, in the Midlands, Oxford supply chain management organisation. and London. Previously vice president of Knowledge Acquisition at Ingenuity Systems, Midlands Thursday 11 September 2003 Philippa spent nine years at SmithKline Beecham PLC in supply chain Tuesday 18 November 2003 strategy development, manufacturing management and global logistics, culminating as vice president and director of a network of 10 manufacturing London facilities around the world. Early in her career, she worked in the UK at Friday 3 October 2003 Eli Lilly & Co. and the Institute for Animal Health. Tuesday 11 November 2003 Friday 5 December 2003 new look nexus – special 24 page edition: Your favourite alumni magazine has undergone a design makeover and we are eager to hear what you think of the new look. Please email your comments to Pam.barnes@wbs.ac.uk and we will include a selection in the next issue, due out in January 2004. Designed by Parenthesis +44 (0)24 7622 9658
  3. 3. : news update Recognition in Brazil: WBS was the subject of strong media coverage in Brazil in June, with an article in Valor Economico, the leading business daily paper, describing WBS as ‘a dream place for world class executives’. The article highlighted the modernity of the campus, its excellent quality of life and how the university has risen fast in various rankings to become a world class centre of excellence. Don Antunes, Dean's Fellow (Strategic Management) was also interviewed on Brazil’s national radio and the WBS Football Management course featured in Brazil’s top business magazine Economia. Recruiting stars of the future: WBS rises again in worldwide rankings Warwick's continuing commitment to excellence is shown by the recruitment of WBS has risen to 34th position in the influential Financial Times World MBA 12 new faculty who will be joining WBS rankings, published in January, making it 8th in Europe, and 3rd in the UK, over coming months. We welcome: splitting Cambridge and Oxford (2nd and 4th respectively). WBS has now risen Alberto Franco ORS, Philip Hancock 20 places over the past three years. and André Spicer IROB, Zoe Radnor OM, Zulfiqar Shaf, Kostas Koufopoulos, ‘This is great news, for both staff and students at WBS. It is also great news for our Silvia Rosetto, Giorgio Valente, Simuna 14,000 former students working around the world – a vindication for them that Scarparo AFIN. Three new Professors: they studied at one of the best business schools in the world’ said Dr Simon Ruth Davies ORS, Richard Elliot and Collinson, former Associate Dean for the Warwick MBA. Nigel Piercy MSM. Further confirmation of WBS’s position as one of the world's top business schools They come from as far afield as the came from The Financial Times Executive Education survey, published in May. University of Melbourne, Australia, and The survey placed WBS 4th in the UK and 30th in the world, a rise on last year of the Institute d’Economic Industrielle, one place and three places respectively. The comprehensive survey looks at a range Universite des Sciences Sociales, of issues from course design and value for money to food and accommodation. Toulouse, bringing a depth and range of experience to the already internationally renowned Warwick faculty. Top honour for WBS Professor kicking off the new season Professor Sir George Bain was awarded the honorary degree of LLD in the June 2003 saw WBS launch the second year of its highly Summer Degree Ceremonies at successful programme for Football Management. Warwick in July. George worked at Developed in partnership with bodies from the WBS when it was the School of footballing community, the qualification is designed to Industrial and Business Studies. In 1970 complement existing coaching qualifications. The course he joined Hugh Clegg at Warwick to continues to receive media interest both here and abroad, take up the post of Deputy Director of Stuart Pearce as the new cohort includes such well-known names as the internationally-recognised ex-England players Tony Adams and Stuart Pearce. Industrial Relations Research Unit. In 1974 he took over as its Director and served in that role until 1981. solving a $40 billion riddle changing students He accepted the post of Chair of the School in 1983. It was in this role that A team at WBS in the Innovation, Knowledge & Ravi Monteiro and Daniel Jones are the first he transformed it into the leading Organisational Networks (IKON) Research has been awarded WBS undergraduate students to go on the international business school it is a £500,000 grant by The Economic and Social Research exchange with Wharton School, University of today, and changed the name to Council and the Engineering and Physical Sciences Research Pennsylvania and will start their studies in nexus: summer 2003 Warwick Business School. In 1989 he Council to research ways in which knowledge transfer can September. Wharton, the top-ranked US left WBS to become Head of London be improved in the field of biomedical research. ‘No-one business school, contacted WBS in the Business School. He was knighted for knows the true value of the ‘lost’ research for the simple autumn to explore exchange possibilities and services to higher education and the reason that it never makes it to market,’ says Jacky Swan, is currently the only UK business school with Low Pay Commission in 2001. Professor of Organisational Behaviour at WBS. which they are working. 3
  4. 4. a message from the Dean of WBS : across a range of undergraduate and postgraduate courses. This Spring the Warwick community lost two valued members: Professors Peter Doyle and Tony Steele, and we pay our tribute to them both below. This autumn will see an almost unprecedented influx to WBS of first-rate new academic staff from around the world. We are looking forward to welcoming them to the Warwick family and we expect them to continue our progress towards becoming the I hope to meet many more of you at the second Annual Dinner which is planned for 13 May 2004 and will be hosted by George Cox, Director General of the Institute of Directors, in the gracious Nash room of their London headquarters. We are very pleased to be able to include here an article Tony best European business school. Warwick Business School’s wrote for inclusion in Nexus on You will have the opportunity foundation is superlative research how to increase the odds of to meet some of them at and teaching excellence and your Warwick Business School has winning. This is complemented alumni events. work, as Warwick graduates, long been known for its by an article about Professor This May I attended the first brings our reputation for quality entrepreneurial spirit. This Stewart Hodges’ research into the Warwick Business School dinner, to over one hundred countries. edition of Nexus is the ‘money’ options markets. There are also which was hosted by Lord Jeff I look forward to your continuing issue with a series of articles on articles from WBS alumni who are Rooker (MA IR 1971–72), at the support. entrepreneurship and finance. using the knowledge House of Lords. This distinctive Since the new year, WBS has they gained at Warwick to venue launched what I hope will launched the Enterprise Teaching develop their corporate strategy become a rich tradition as alumni Group which will ensure that this as entrepreneurs or in the and students mixed with current expertise is brought to students finance sector. and past WBS staff. Howard Thomas tribute For WBS, the Spring term was Chairman of WBS who was the Accounting and Finance overshadowed by the sad deaths responsible for bringing Peter Group organised a gathering to of two of the leading lights of the Doyle to WBS, through to fellow celebrate his life, following on School. Peter Doyle and Tony marketing professionals, from the funeral. The event was Steele both joined WBS as academics, past and present held at the University's Scarman professors, both achieving this students and alumni of WBS, and House, next door to WBS, and promotion at an unusually young Peter's family. Messages and included friends, family and age, and tragically both lost long tributes were sent from as far colleagues from academia and Peter Doyle battles against cancer. This cruel afield as India, Greece, Japan, the professions. disease took them within weeks New Zealand and North America. Tony and Peter were not only of each other, at an age when A commemorative book on Peter's absolute experts in the they still had much to give in life and career is currently being academic sense, they were both their careers. compiled; two copies of this will lively and entertaining Peter died on 30 March, and a be produced, one copy to be well-rounded individuals with a tribute event was organised given to the Doyle family, one to great sense of humour. We will jointly by the University and be kept at WBS. miss their commitment to WBS WBS on 20 May, in the Ramphal Tony died on 21 April, having and their dedication and Tony Steele Theatre on campus. A wide fought his illness to the end, and enthusiasm for their own : spectrum of guests attended this insisting on leading the Critical subjects, for the wider world of event, from top academics such Issues in Management third year business study and research, as Professor Sir George Bain, core course for the Undergraduate and their wish to improve and Vice-Chancellor of Queen’s Programme at WBS this academic extend the boundaries of University, Belfast, and past year. His family and colleagues in knowledge and expertise. For more information visit w www.wbs.ac.uk/news/features/doyle.cfm w www.wbs.ac.uk/news/features/steele.cfm
  5. 5. first for WBS An historical event took place on Thursday 8 May, with the School’s first ever Annual Dinner. As befitting a first, this premier event was held at one of the most prestigious venues in London, the House of Lords. WBS alumnus Lord Jeff Rooker (MAIR 1971–72) hosted a unique assembly of over 120 invited guests, faculty, board members, alumni, staff and current students. british cabinet office looks to warwick On arrival, Palace of Westminster guides took guests on a tour behind the scenes, concluding in the House of Commons. With its outside terrace overlooking the Thames, the Cholmondeley Room provided a superb Professor David Wilson was invited by the House of Lords to teach Members of the setting for reminiscing over the excellent House and senior civil servants, including Black Rod, about strategy implementation dinner, as guests were reunited with former and effective organisation design. On Friday 28th March David led a three-hour lecturers, classmates, students and colleagues. session with 30 Members and Civil Servants to help them identify where issues lie, To the chimes of Big Ben, Dean Howard which are critical, and how developments will be made in the future. Thomas proposed a toast to the School and This is part of a larger process led by the Cabinet Office, which is looking at how its successes, including the 5 star ranking Parliament can be re-organised. They are particularly interested in how the and the excellence and popularity of our House of Lords Committee Structure is organised, how information is conveyed programmes, with our MBA programme into the House, and on what basis they make decisions. recently ranked above Oxford. Lord Rooker ‘The Cabinet Office looks to Warwick for business expertise and training responded with a witty speech recalling his which is quite exciting,’ explains David. They will be seeking a partner days at Warwick in the early ‘70s, and the business school to continue the process of improving decision-making and somewhat unconventional route his political this may well turn out to be Warwick Business School. career has taken since. David Wilson is Professor of Strategic Management at Warwick Business School. He has served as an Advisor to the Cabinet Office and various Alumnus Mike Callanan confirmed: ‘The government departments as well as to many private sector companies. venue, organisation, food and atmosphere His research interests are: strategic decision making and performance; were all superb. As a result we had a comparative studies of public/private organisations; strategic change and pleasurable and memorable evening. It will politics in organisations; links between leadership, strategy and be a hard act to follow.’ This event proved so performance and strategy implementation. popular that tickets sold out within hours. He was invited to lead the session at the House of Lords with George Cox, the Next year’s Annual Dinner will be held in head of the Institute of Directors. Black Rod was part of the session because, the beautiful Nash room at the Institute of as well as his famous ceremonial role, he oversees the committee structure in nexus: summer 2003 Directors in London. the House of Lords. ‘The day had proved a great success,’ concluded David, ‘and the House of Lords fully intends to follow up this initiative.’ 5
  6. 6. keynote lecture An invited audience of faculty, alumni and the simulation demonstrated that a range doctoral students attended a keynote of structures could be equally effective.’ lecture on organisational design by These findings resonate with those found Professor Nicolaj Siggelkow of Wharton by David and his colleagues who studied School in May. the relationships between implementation Nicolaj Siggelkow and David Wilson According to David Wilson, Professor of characteristics of strategic decisions and Strategic Management: ‘This lecture the effectiveness (or otherwise) of the showed how some of the nostrums about outcome. They found that organisational the appropriateness of organisational structure did not feature as a key factor in structure can be questioned. Using a these processes. Successful decisions could simulation approach, Nicolaj demonstrated be made in highly centralised that centralised, de-centralised and organisations which were facing turbulent network (liaison) could be equally effective environments and vice versa. Indeed, given certain contextual parameters.’ structure itself only seems to matter when it impedes decision processes. Unless ‘In particular, appropriate forms of German-born Nicolaj has been in the USA structure gets in the way, then it seems structure - those which led to greater speed since 1990 and met his collaborator Jan there are no simple ideal types as proposed of action and decision making – were Rivkin when he did his PhD at Harvard. by earlier contingency models such as contingent upon both the characteristics of Commenting briefly on his visit, Nicolaj those by Burns and Stalker. the problem (simple versus complex) and said: ‘I have known Andrew for a couple of the environment facing managers (stable Professor Siggelkow was invited to WBS years and was delighted to accept his versus turbulent). Only in extreme cases of by Andrew Pettigrew, WBS Dean Research. invitation to Warwick. I am very impressed stability or turbulence were Burns and Andrew commented, ‘His work with the new building and what Howard Stalker's nostrums that centralised exemplifies the use of a variety of research has been telling me about studying the structures are appropriate in stable methods to beam in on a consistent MBA by different disciplines and the conditions and decentralised structures research theme’ how and why strategic ability to switch between, which I feel may appropriate in turbulent conditions choices and changes in firms are linkable to be unique, particularly the distance supported. In all other cases, firm performance. learning MBA with local tutors.’ book now! Forthcoming Warwick Open Programmes Short Courses Accredited Open Programmes October 2003 Designed for practising managers who wish to refine and formalise their 2 Business & Responsibility: The Global Compact management knowledge and skills, these practical courses are delivered tbc Entrepreneurship as 8 x 3-day modules over 18 months and lead to a University of Warwick Diploma. November 2003 3 Managing Knowledge Warwick Diploma in Applied Management 17–18 Images of Strategy: The Impact on the Firm Next course starts 8 October 2003 January 2004 Warwick Diploma in Service Leadership 13–14 Marketing: Building and Managing Strong Brands Next course starts 24 November 2003 27 Managing Critical B2B Relationships For full programme information and booking details, contact Warwick Business School Executive Programme on tel 02476 524395 e-mail execqueries@wbs.ac.uk or visit our website at www.wbs.ac.uk/corporate
  7. 7. enterprising teaching at WBS Can entrepreneurship or entrepreneurial behaviour be taught or is it innate? ‘I am probably quite unorthodox,’ says Nigel Sykes. ‘People need to find out who they are and how they fit with other capabilities. I focus less on the notion of the entrepreneur and more on the entrepreneurial team, the importance of developing our talents, and application of the skills learned on other courses. ‘The course becomes entrepreneurship in action. Everyone has a talent and can make a valuable Nigel Sykes contribution so that is the teaching approach I take’ In Spring of 2003 Warwick Business School own businesses directly after their course, launched the Enterprise Teaching Group. but from the pattern of the alumni Where is the money? This formalises the change for the long- database it is clear that most Warwick Especially in the current climate, finding standing research group, the Centre for MBAs will be self-employed at some point funding for a new venture can be tough. Small and Medium Sized Enterprises, in their careers. There are also a number of On the very popular new course, Dr which now shares its expertise with current students on the MBA course each year who Andrew Burke seeks to provide students WBS students through teaching. are already entrepreneurs. For example, with an understanding of the venture Sara Shailer who had started her project capital market from different perspectives: A whole series of entrepreneurship courses that of the investor in a venture capital management company, Accompli, in 1995 are being taught to Warwick undergraduate fund, the entrepreneur, and others who graduated with the Warwick MBA this July. students with nearly 700 students taking work in the sector. He looks at what VC’s ‘The modular programme of study really courses over the coming year. These range do and how they seek to add value, he worked well with running a business at the from, ‘Understanding enterprise’ taught by examines legal aspects and the same time,’ she commented. Dr Francis Greene, through to ‘Critical management of a VC fund. He also teaches issues in management’ taught by Professor the financial economics which underlie David Storey. Innovatively, several courses The mythical entrepreneur new venture finance. are aimed at Warwick undergraduates who Nigel Sykes and Dr Andrew Burke are taking science or engineering degrees teach Warwick MBAs a course called but who will undoubtedly need business ‘ENTREPRENEURSHIP AND NEW VENTURE skills in the future. CREATION’. The course has two major themes: entrepreneurial behaviour and the All variants of the Warwick MBA also take entrepreneurial process. Students learn what Headed by David Storey, the Enterprise courses taught by the Enterprise Group. is involved in setting up a business, the Teaching Group comprises Stephen There have always been a subset of problems of growing a business and the Batstone, Andrew Burke, Francis Greene, Warwick MBAs who go on to start their preparations and role of the business plan. and Nigel Sykes WBS hosts international launch The launch of the new International Journal departments including Harvard, MIT, successful entrepreneurship are skills and of Entrepreneurship Education attracted Berkeley, UCLA, Warwick, Cambridge and perspectives that can largely be taught. international media attention at WBS and INSEAD attended the launch, where These are the skills that the Journal will be nexus: summer 2003 the Mercia Institute of Enterprise. Editorial Dr Andrew Burke (WBS and UCLA) one of promoting.’ The IJEE is published by Senate board members from the world's leading the Journal's founding editors, stated, ‘The Hall Academic Publishing. Details are business schools and economics constant features that are associated with available at www.sentatehall.com 7
  8. 8. David Tilles and Clive Gillmore
  9. 9. ‘David and I both think our Management Sciences degrees from Warwick gave us many different skills as well as the perspective to see what interlinks and forms a whole’ D avid Tilles (BSc, Man. Sciences, 1971–74) met Clive Gillmore (BSc, Man. Sciences, 1979–82) for the first time when he interviewed him for a job at the British merchant bank, Hill Samuel. Now they run an extremely successful London based investment management firm, Delaware International Advisers, as Managing Director and Deputy Managing Director respectively. A winner of the 2001 Queen's Award for domestic client base and US mutual funds capability. They also gave us equity ownership in the business. We were bringing them our experience of international markets at a time most American pension funds invested very parochially.’ ‘David saw that there was huge potential growth in this segment of the global financial services industry. At that time the average US pension fund might only have an international allocation of 2%-4% and we expected that international trade, their company mainly invests on proportion to grow to over 15%,’ Clive explains. behalf of North American based pension funds, ‘There was a lot of investment theory at the time on the endowments and foundation clients like Pfizer, State of benefit of diversification and when you combine New York and Stanford University in stock markets domestic US and foreign investments together you can throughout the world. They have seen their share of lower total portfolio volatility and have the potential to this huge and competitive US market double over the increase return’. last five years, and in spite of the volatility in the international investments, they have stayed focused on ‘The first year was hard work,’ remembers David. providing their clients with above index returns for all their products at low levels of risk. ‘It took three years to get our first $1 billion under ‘David was the entrepreneurial catalyst,’ Clive explains. our management for fifteen or so clients’ In 1990 David moved with his entire team of nine In the following years many US, Canadian, Japanese, international investment professionals from Hill Samuel Australian and South African pension funds embraced to set up a new company. ‘It was less of a risk for the rest international investment and Delaware. David and of us because we were a bit younger, but we all agreed to Clive's new company, Delaware International Advisers, no change in our salaries and no bonuses for two years,’ was able to grow from the initial team of ten in 1990 to remembers Clive, which even as one of the youngest in just under 100 people today. The assets under their the team, meant a substantial reduction in income after management have grown from $20 million for one nearly ten years successful work in the City. client to $16,000 million for over 70 large institutional clients. They have been one of the fastest growing ‘We knew our future as a team lay elsewhere,’ companies in the City with over 90% of their annual says David. ‘We had a few choices but Delaware sales coming from overseas customers. Investments, a US-based asset management company, nexus: summer 2003 offered to fund our whole team for two to three years ‘It was David's entrepreneurial vision to be in the right for no return and agreed to give us access to their place at the right time, but he also brought together a 9
  10. 10. shrewd investors continued: multi-skilled team. For example, I can lead the market's boom and bust of the ‘I see two challenges in our future and you aspects of our investment side but also past few years, the long-standing have to have the vision to know you are well involve myself in winning new business. recession in Asia, and keep adding to positioned no matter what happens,’ says David and I both think our Management their client base? Clive. ‘The financial services industry is Sciences degrees from Warwick gave us going to consolidate in the medium term ‘We take a long view on fundamental many different skills as well as the and in the longer term we have the value. We are consistent and systematic in perspective to see what interlinks and influence of demographics. People will live our investment approach over time, and forms a whole,’ says Clive. longer and they will need to give greater this has proved itself,’ says David. ‘Our emphasis to income. Our income based Their team has remained remarkably average international portfolio has only approach to equity evaluation fits this steady, with six out of nine of the original fifty companies, and with 24 equity scenario very well as does our capability in company founders still with Delaware. analysts this means that the team can managing Global Fixed Income instruments. Over time they have recruited 35 focus on knowing fewer companies, in We believe our firm is well placed in both investment professionals and only ever greater depth over a longer term the medium and the long term.’ lost five. They credit this stability, sense of evaluation period. This marks us out team spirit and loyalty with much of their relative to competitors who tend to David and Clive obviously share a long success in achieving good investment try to cover too many companies and successful history together and they results and retaining clients. By keeping superficially and trade the holdings in both credit their Warwick degrees with the company fairly compact, based in a their portfolios frequently.’ starting them off. David relates an single location, always on one floor with anecdote of their first meeting when he ‘Investment fund management is about open plan offices and the management in interviewed Clive for a job at Hill Samuel. people and methodology,’ says Clive. accessible glass fronted offices, everyone ‘I asked him about his degree from ‘For Equity markets we use a long term feels a strong sense of esprit de corps. Warwick. I inquired where the University dividend discount model which is based Probably most importantly, every member of Warwick was. Then why isn't it called on profit flows. We focus on return and of the team shares in the same incentive University of Coventry? As he dealt with our approach is income based. This is a plan. Thirty percent of the company's that, I asked him about the 'sciences' part better long term map.’ Considering that profits are put in an incentive pool and of his Management Sciences degree and Delaware has retained both its clients shared out amongst all of the staff so that questioned could management really be and staff over the internet boom when employees feel motivated to see the scientific? In the end, of course, I told him offering low-risk and non-speculative company succeed. I had the same degree from the same returns was extremely unfashionable, University, and despite that hired him!’ So how can they guarantee a reasonable they must know what works. return in the current climate, ride out Warwick Business School’s Master’s degree companies including: JP Morgan, Deutsche in Financial Mathematics (MSFM) takes Bank, Foreign and Colonial, Baring Asset some of the cleverest mathematical brains, Management, and London Clearing teaches and trains them for one year, and House.’ when they graduate they are snapped up The companies work with Stewart to set on the employment market by financial the projects, and then he manages the institutions. Each summer, MSFM students students to ensure they deliver a useful are available for projects with companies. report back. Assignments run from the ‘Our students do exciting projects end of June to mid-September and for companies,’ explains Professor companies do not incur any costs unless Stewart Hodges who is the Academic they require students to travel. Director of the programme. ‘The projects are on topics like risk measurement and management, derivatives valuation, If you think you may be able to offer an investment management, financial MSFM student project, please contact Financiers of tomorrow, current students Jianping Feng and Miao engineering, and computational work. Professor Stewart Hodges on Chen are doing their MSc projects with London Clearing House This year projects will be completed for stewart.hodges@wbs.ac.uk
  11. 11. hedging your bets by Emily Fay If you were to have bet in the Martell Grand Professor Stewart Hodges, at Warwick ‘For the put options in both markets, one and National horse race on a 1-10 horse, a horse Business School’s Financial Options Research three month horizons, we found there was the bookies think has a 90% chance of Centre (FORC), and a team of international evidence that investors are usually overpaying winning, then for every pound you bet you collaborators have recently completed some for all put options as an expected cost of would get £1.13 back if your bet paid off. research to examine if the above premise insurance,’ continues Stewart, ‘the patterns of On the other hand, if you bet on a real translates from horse race betting to average return map onto the betting average outsider, with a 100-1 chance, you could options markets. return.’ win a fantastic return. ‘We investigated this for the S&P 500 futures, This is primarily of interest to institutional What about the expected returns on these the FTSE 100 futures, and the British investors like Goldman Sachs and Deutsche bets? We know that on average the bookies Pound/US dollar futures for the 17 years Bank where those who use options for win, but they expect to win more on some from 1985 through 2002,’ explains Stewart. trading or hedging will be able to make use of kinds of bets than on others. The averages ‘We found that there was a definite this extra information to guide them. show that the expected return to the punter relationship between calls on the FTSE 100 is worst on outsiders (which really deserve with three months to expiration. Moreover, even longer odds) and best on the favourites there are slight profits from deep-in-the- (which should have slightly shorter ones). money calls on the S&P futures and increasingly greater losses as the call options Further reading: ‘The favourite / long-shot For bets on strong favourites the punter can are out-of-the-money.’ They did not find the bias in S&P 500 and FTSE 100 Index futures nexus: summer 2003 expect a small positive return, whereas for all bias on the FTSE 100 futures but a significant options: the return to bets and the cost of other bets the expected return is negative. long-shot bias does exist for the deepest insurance’ FORC preprint 2003/125 available out-of-the money options. from stewart.hodges@wbs.ac.uk 11
  12. 12. hot off the press Members of the WBS IKON group have released a new book that draws together some of the major strands of the unit’s entente cordiale research. Managing Knowledge Work by Sue Newell, Maxine Robertson, Harry Scarbrough & Jacky Swan. Published by Palgrave Press, Managing Knowledge Work is aimed at academics, students and practitioners who are involved in Tim Soar (EMBA In 1997, Vanessa studying, teaching, practising and 1991–97) has lived Couchman (MBA managing knowledge work, the book in Japan, Argentina, 1989–90) fulfilled provides a coherent and integrated Venezuela, France her ambitions of account of the critical issues involved. and Spain. A native living and working English speaker, in France by setting he also speaks up as a freelance Max Moullin (MSc MSOR 1974–75) has fluent Spanish consultant and recently written Delivering Excellence in and French business writer Health and Social Care published by Open University Press. According to the The former Commercial Director and ‘Today, I suspect that the MBA is foreword ‘Its review of the different General Manager of MG Rover in often a springboard for new business approaches to measuring quality and to Argentina, recently moved with his start-ups. When I took mine it was promoting excellence in health and family to Barcelona, Spain. Last year usually a stepping-stone from one social care is comprehensive and Tim started his own executive interim corporate career to another. thorough.’ Max is a senior lecturer in management consultancy, Proyectos No exception, I went from the TQM and Organisational Excellence at Limited providing specific publishing industry via the MBA Sheffield Hallam University. Further management and project resource to to the Audit Commission. details can be obtained from companies throughout Europe. I did not have the courage to go www.amazon.co.uk His latest assignment teamed him it alone straight from Warwick, up with MG Rover again, this time and the corporate experience as Interim Sales Director of MG Rover I gained afterwards was essential,’ Disabled parents are the subject of a España in Madrid for a 5 month explains Vanessa. timely new book by WBS alumnus period to achieve a number of Richard Olsen (MA Sociology of Labour After leaving the Audit Commission, specific objectives. 1987–1989; PhD Industrial Relations, she started with a small client base. 1989–1993). The book, Parenting and ‘My experience has been gained in A local contact was invaluable, guiding Disability: Disabled Parents' experiences of dynamic international environments, her through the systems and language. Raising Children, published by the Policy where it is paramount to define key According to Vanessa, ‘Once set up, Press, is the product of work carried out project goals with multi-cultural modern communications technology at the Nuffield Community Care Studies stakeholders and shareholders, and made it possible to work remotely and Unit, University of Leicester. then achieve them,’ says Tim. Over much of my work is done via email www.prw.le.ac.uk/nccsu/ the last 18 years he has worked mainly and Internet. Having the contacts to within the automotive industry on start with made all the difference.’ major business development projects, Now she has a thriving client base, Gerardo Patriotta obtained his PhD in both commercial and manufacturing. mainly in the public sector. The main Industrial and Business Studies at WBS ‘I enjoy the challenges of working in advantage of working as I do is the (1995–99). Now Associate Professor of different cultures and languages lifestyle. I do come to England on a Strategic Management at the Rotterdam enormously and really believe that we monthly basis to see clients, carry out School of Management, Erasmus have still only scratched the surface in projects and market myself. Working University, Gerardo reports the release of terms of inter-EU collaboration. The as I do does not seem to have been a his first book with Oxford University EMBA gave me some fundamentals of barrier to securing assignments.’ Press. Organizational Knowledge in the thinking that are applicable and valid Making – How Firms Create, Use, and Setting up your own business is never in my day-to-day work wherever I am Institutionalize Knowledge. This book aims simple but Vanessa would seem to in the world. Of great value to me to fill the gap between theory, method, have achieved the best of both worlds. were the experiences and different and practice by developing a approaches we shared amongst the phenomenological approach to the study diverse participants during the EMBA.’ of knowing in the context of organizing. www.oup.com
  13. 13. business alchemy: One of the main accusations hurled at turning theory into practice by Robert Craven seen as a good thing…unless the initiative Business Schools is that of irrelevance to the can demonstrate value for money. In reality of the business ‘coalface’. No matter essence he has set the agenda for the how much the academic defends the need provision of business support so that it will for academic rigour, research excellence, the ‘do what it says on the tin’. need to deliver a set number of academic And how does David’s body of work sit in journal articles per year or the fact that their the real world? Has he made a difference? department has to be run like a business… I think that the answer is ‘Yes’. the fact is that these accusations of ivory tower behaviour will emerge. In the seminar room or with clients, the excellent fast-growth businesses really are Professor David Storey from the Business obsessed with David’s triad: strategy, School’s CSME (Centre for Small and As a business speaker, I pride myself on marketing and teams; the issue here is to Medium-sized Enterprises) has achieved a using plain English, yet my work is communicate this with the aspiring reputation as the academic in the field of underpinned with David’s work. business. In government small business SME research. His accolades (in the academic policy and in the Business Link movement, world) are numerous: So my question is: The whole small business industry was David’s challenges to the effectiveness of does David’s work help businesses? shaken by David’s challenge to the old view business support have changed the way that investing in start-ups is a good thing – To declare my interest, I am an that success has been measured. David said and proved that to get the entrepreneur who has run restaurants, biggest bang for your buck, governments David and I set up what has become known sound recording studios and training should invest in the successful high growth as the biggest and the best training companies. Currently, I run The Directors’ businesses which are more likely to produce programme for UK bankers along with Centre, a management consultancy that more jobs than the start-ups. This was the world-class training for business advisers works with fast-growing businesses. I am raison d’etre for the creation of the and their businesses. These programmes author of two best-selling business books. Business Link movement in 1991. took the theory and fed it to the coalface – In a former life, I worked at the CSME, theory and practice worked together. And acting as Programme Director for several It was David who revealed that high the results were incontrovertible: the bank programmes that worked exclusively with growth businesses tend to be more focused saw market share and profits increase, entrepreneurs or their bankers or their on marketing than the run-of-the-mill business advisers saw their clients’ profits advisers. My interest has always been in average business. He also noted how the increase and our entrepreneurs saw their delivering value for money ‘interventions’ really good businesses tend to focus on the turnover and profits increase. And these to clients, irrespective of the source or triad of strategy, marketing, and teams. successes become the stamping ground to academic rigour of the offerings. All I want David likened the skills of the investigate what made them successful, is tools that work to give to my clients. entrepreneur to those of a whitewater which feeds more research and more So, the question for me, as an entrepreneur, rafter – obsessed with getting into the training and consultancy. has to be: ‘Does David Storey’s work add right current (=marketing!), but aware that Robert Craven is Author of Kick-Start Your value to the clients I work with?’ and the the outside environment can also destroy Business and Customer Is King (Foreword answer is ‘Yes’. you (=strategy). by Sir Richard Branson). The Financial Times David’s book ‘Understanding The Small Essentially, David challenged how has recently described him as ‘the Business Sector’, and his work with ‘The government had dealt with small business. entrepreneurship guru’. He runs the Ten Percenters’ with Deloitte and Touche, As a result of his work, it is no longer management consultancy for growing both focus on the needs and the possible to assume that ‘helping small businesses, The Directors’ Centre. environment in which businesses live. businesses’ or ‘helping start-ups’ can be E rc@thedc.co.uk w www.thedc.co.uk In February 2003, Adrian Finn, a part C distance learning According to Adrian, ‘To succeed, you need a clear strategy enterprising bid MBA student, used his entrepreneurial skills, his savings and re-mortgaged his home to set up his own consultancy, based on some thorough market research. Cash flow is critical, plus lots of self-belief. Making use of all possible EpurchasingPlus. contacts and opportunities is a must in securing those first ‘I had always intended to start my own business eventually few contracts. We are currently dealing with about 30-40 but I was never totally clear as to what form this would medium to large organisations, with turnovers from £22m take. Doing the MBA provided the clarification and the to £280m. They are using e-auctions on anything from energy and telecoms through to office paper and raw nexus: summer 2003 necessary pointers I needed to consider,’ explains Adrian. materials, with savings averaging 16%.’ His company provides ePurchasing solutions, particularly e-auctions and collaborative solutions, to medium to large With an expected turnover for the first year of £250k sized enterprises, targeting organisations wishing to generate Adrian looks set to continue bidding in a strong market. rapid returns from their respective ePurchasing investments. For more information visit www.epurchasingplus.co.uk 13
  14. 14. how to pick a strategy to tip the odds in your favour by Professor Tony Steele Although we live in an uncertain world rich with unknown opportunities, this does not mean we are victims of chance. There are strategies that can tip the odds in our favour. Here is a rule that guarantees to improve your chances of making a good choice… one loser following another. A one in three chance step one: followed by another one in three chance. This is bad luck, but will only occur one in nine times. A rule that reduces a Carefully assess the first opportunity. Use this first opportunity below average choice from one in three times down to one to learn as much as you can about what is on offer in nine seems useful. step two: Two thirds of the time above average Reject this first opportunity Having reduced your chances of making a below average choice, the rule must have improved your chances of step three: making an above average choice. The chances of picking a winner can be worked out similarly. If the first option was Accept the next opportunity that is as least as good as the above average, then the rule says you will not settle for first opportunity that you turned down anything less. You will pick a winner for sure. You may have to wait for the next prospect that is as least as good as In general, the choices you have to make, once you have the one you turned down. unwrapped them, walked around and mulled them over, The chance that the first option is a winner is one in three, can be either a top choice – a winner; a grade two – an also but there are more chances of ending up with a winner. If ran; or a grade three – a loser. the first option you turned down was an also ran or a loser It does not matter how you label them, or the criteria that then the rule states that you wait for something equal or you apply to judge the choices as they reveal themselves, better. You wait for the next option and only choose it if it they can be classed as average, below average or above is an also ran or a winner. The chance it is a winner is 1 in average. Only with experience will you eventually learn 2. So another way of picking a winner is to first pick an what to look for. We have to learn on the job. If there are average followed by a winner, or a below average followed three grades, then in the face of your ignorance there is a by a winner. The chance of picking a winner has risen. one in three chance that you will end up with a below average choice. odds without odds using choice the rule the rule A third of the time below average Using the rule you can change things in your favour. To above average ‘a winner’ 1 in 3 6 in 9 end up with a below average choice you need to go average ‘an also ran’ 1 in 3 2 in 9 through three steps. When the opportunity appears, you study it closely. You do not know how it compares to below average ‘a loser’ 1 in 3 1 in 9 others that may arise. You have to decide with limited information. You do not realise it is a below average choice. In any event, the rule is to reject it. The rule has doubled the odds of picking a winner, from one third of the time to two thirds of the time. The next opportunity arises. If it is a below average option, then since it is as good as the choice you have just turned Life can be big consequences following from small actions. down, you will accept it. To end up with a below average Randomness, unpredictability, chaos are also opportunities. choice using the rule, you need to have the misfortune of We can tip the odds in our favour.
  15. 15. alumni out and about With events in Hong Kong, Germany, awarded the WGAHK scholarship, the very Greece and Kenya, as well as the London first Warwick scholarship established by a Evening Seminar, the Warwick Debate, local alumni association outside the UK. the first ever WBS Annual Dinner, One of the after dinner speakers was Sue reunions and the Summer Ball, Beech, Assistant Programme Manager of the spring and summer terms have the MBA by Distance Learning programme been action-packed. at WBS. alumni event in athens: Dimitris Kadis Hong Kong Germany Maria Chryssoulaki (left) & Tina Iordanidou (right) WBS alumna Yvonne Leung (BSc ManSci The second get-together of WBS Alumni 1984–87) was elected President of Warwick in Munich was held in March, organised Graduates Association (Hong Kong) at their by Christian Hoefter (FMBA 01-02). Greece annual dinner in January. Johnny Li He says: ‘The get-together was great fun Gatherings in Athens were well attended (DLMBA 1987–92) remains Vice Chairman. and everyone thoroughly enjoyed the in April and June, organised by Maria WBS Undergraduate Danny Fung has been evening. We met old friends and revived Chryssoulaki (MBA 1997–98) and the good spirit of our study.’ Tina Iordanidou (MBA 1999–00). In June, WBS Professor John McGee’s topic was Kenya ‘New Strategies for a New Economy’ at WBS Alumni met in the Nairobi Safari Club the Athenaeum Intercontinental Athens. Hotel on Sunday 23 March. Committee The presentation was followed by dinner members of the Warwick Alumni-Kenya at the poolside. The evening proved an Chapter came along to talk about social excellent opportunity to meet prospective events and community activities. The event Warwick students, catch-up with fellow was hosted by Ann Jackson, Marketing and Warwick alumni and participate in a International Relations Officer at WBS. topical presentation. The WGAHK annual dinner See page 23 for more event reviews. warwick business school alumni association magazine: summer 03 New look for Nexus the We are constantly looking at ways to develop money and improve communications to our Alumni, issue particularly with our flagship magazine Nexus. Over the past six months, we have undertaken a comprehensive design review of the magazine, with the involvement and support of members of the WBS Alumni Board, faculty and staff at WBS. The quality of design concepts submitted was extremely high and we are pleased to announce that Parenthesis, a design company based locally, conceived the winning design for this special 24-page issue. Due out in January 2004, the Winter issue will focus on Marketing, with articles from top academics and successful marketeers. nexus: summer 2003 The Alumni Team (left to right) Caroline Hughes, Emily Fay, Pam Barnes, Nicola Price, Sue Cresswell As always, we welcome your input, so please We welcome Nicola Price and Caroline Hughes to the Alumni team. Nicola provides essential organisational skills and administration email Pam.barnes@wbs.ac.uk with articles support , while Caroline’s role will be consolidating the wonderful alumni support we receive from our contacts around the world, relevant to the marketing sector. to organise global business networks and special interest groups. 15
  16. 16. launching a business in a recess10n steps to success Rupert Howell started his first business, the ad agency HHCL, in 1987 three weeks before Black Monday and sold it in 1997 for £24 million