First SKOLKOVO MBA Alumni

15 December will go down in history of SKOLKOVO School: it was the day when a long-awaited graduation party of our students of the first SKOLKOVO MBA Programme took place! In September 2009 they received student cards from Dmitry Medvedev, President of Russia. How fast those 16 months of hard studies, work and activities have passed!

During their studies MBA students have visited several continents, acquired new friends and business partners, created their own start-ups and, of course, got a lot of valuable knowledge and advice for the future from prominent businessmen, politicians, culture and sport celebrities and, of course, from their personal mentors.

You could watch the development of events in our social media platforms :)

Wilfried Vanhonacker, School Dean, opened an official ceremony and reminded of all important events of those months. Ruben Vardanian, SKOLKOVO President, emphasized in his ceremonial speech that the graduation was just a beginning. Andrei Volkov, SKOLKOVO Dean, wished the students to follow their own way and move forward in spite of any difficulties.

During an official part special SKOLKOVO Awards were granted. The awards in different nominations were received by
Sultanbek Khunkaev – The Most outstanding work
Gamid Akhmedov – The Most socially aware student
Marina Parfenova – The Most creative student
Alexander Khomenko – The Most entrepreneurial student

It’s difficult to find words to describe emotions that filled the guests at the graduation party – both happiness, and excitement, and pride, and sadness, because the first class of students leaves the walls of the SKOLKOVO Campus to start free floating!

We do not say goodbye to our alumni and will report their activities further.

Is Low Wage Manufacturing in China Disappearing? - is a new research of SKOLKOVO

Growth in Chinese manufacturing has been the critical element in that nation’s ability to achieve average annual real GDP growth rates of approximately 10 percent since the early 1980s. And it has been “cheap labor”, more than anything else, which has fueled China’s competitiveness and growth in this sector. Higher profile strikes and rapid wage gains in China over the past year have given analysts speculation that the era of cheap labor may finally be coming to an end.
While China is bound to eventually lose its competitive advantage as a low-wage producer as it continues developing and moves toward higher “value-added” manufacturing and the production of services, the fact remains, however, that it is far from reaching that stage. And this is fortunate because China currently lacks real advantages in higher education, efficient markets and enterprise and a capacity for innovation and still requires low wages to drive economic growth.

The study also finds that China’s working-age population will not peak until around 2020, roviding China with sufficient labor input.
The highlights of the report include:

• Taking into account the increasingly large number of workers employed in the “informal” economy, China’s average wage levels in manufacturing currently remains competitive against most other Asian developing countries.
• SIEMS’ estimate for the average hourly compensation in China’s manufacturing sector is RMB 7.1 in 2010 (or $1.05 at the current exchange rate), with the corresponding monthly compensation running RMB 1,652 ($244).
• Chinese real wages in manufacturing, after accounting for inflation and labor productivity gains, are actually lower now than they were in 2001.
• While China’s supply of 15-24 year-old workers (the ideal age for the lower-end manufacturing that China’s has specialized in) has recently peaked at 228 million in 2010, the total labor supply in this age cohort is estimated to be a solid 200 million by 2015, more than they numbered in the year 2000.
• China’s working-age population (16-59) will not begin falling until 2020, providing China with sufficient surplus labor and keeping a lid in the growth in labor compensation over the next decade.
• China’s “interior” provinces, possessing lower wages than the coastal regions and endowed with a large labor reserve, is likely to become the most immediate recipient of global manufacturers looking for competitive locations.

Central Bank Independence and the Global Financial Meltdown - is a new research of SKOLKOVO

Central banks have been both blamed and praised for their part in the global financial crisis, but how much did their independence in setting policy actually affect a country’s economic performance? This study shows that countries with more transparent central banks were more prone to higher credit and, for the most part, lower interest rates, in both developed and developing countries. Despite much of the hype over central bank independence and its supposed benefits for an economy, it appears that bank independence didn’t matter that much for how an economy weathered the crisis, and may actually have contributed to the asset bubbles in developed countries.

This study is based on an examination of 91 countries over 1989-2008 and the effects of an independent central bank on different variables, including growth rate of GDP per capita, inflation, and credit to the private sector extended by the banking sector. The study breaks new ground in utilizing several different measures of bank “independence,” including using a “transparency index” that measures the openness of a central bank to public discussion. The key results from the study include:

• A long history of both central bank independence and transparency lowers interest rates for all economies, while rapid turnover of central bank governors raises them by a large amount;
• Over the long run, an independent and transparent central bank should create the right conditions for growth, but in the short-term, price stability may lead to lower growth than would have been achieved if a central bank were acting politically;
• Growth in bank credit appears to be much higher with transparent central banks than with non-transparent ones, possibly because a central banker still has the incentive to please his audience, which is more “the economy” and less “the government.”
• Looking specifically at the BRIC (Brazil, Russia, India, China) economies, central bank independence from 2003 onward correlates with a strong positive effect on bank credit, meaning that independence appears to have fueled the root causes of the global recession rather than stemmed them.

In sum, the paper concludes that central bank independence may not even matter for growth or inflation if the policies pursued still are erroneous. If central banks were independent during the credit boom of the early 2000s, perhaps it’s more important to wean both developed and emerging market bankers off bad models rather than make them more independent. Experimentation with different term-limits for bank governors, as well, may help to avoid some of the problems seen in the run-up to the crisis, removing the temptation to play God with the economy.

Advice on business literature from Helen Edwards

We congratulate you on the first day of winter! We hope that in spite of frosty weather, you will get warm with a cup of hot tea reading some interesting books. It is books that we will tell you about today. A traditional column of advice on business literature guided by SKOLKOVO Library project manager Helen Edwards.

1. Anywhere: how global connectivity is revolutionizing the way we do business
Emily Nagle Green.
McGraw-Hill, 2010.
281 pages.
ISBN: 9780071635141

Imagine a world of total connectivity where people, ideas and products are instantly and seamlessly connected. President of the Yankee Group, Emily Nagle Green, explores the business opportunities offered by the wireless world. The book shows how to evaluate and then exploit business activities by their "anywhere" characteristics - from those like music which already live in the virtual space, to devices with intelligent components, to physical services rendered more efficient by the technology, to RFID tracking of assets- and points out the profit potential for those businesses able to "collapse time and space" by taking advantage of the anywhere technologies.

2. Brand society: how brands transform management and lifestyle
Martin Kornberger
Cambridge University Press, 2010
308 pages
ISBN:9780521726900

Kornberger uses evidence from sociology,anthropology, philosophy, aesthetics and mangement and his own experience in a branding agency to develop a theory of brands. He identifies brands as the organizational lifeline between the company and the external environment, the force which both links and reorganises the relationship between production and consumption The book is organised in three overlapping concentric circles: the concept of brands and how they are made: how brands are used by companies to manage and organize and indeed formulate the company identity and how brands transform consumption through the concept of lifestyle.

3. India, Inc.: how India's top 10 entrepreneurs are winning globally.
Vikas Pota
Nicholas Brealey, 2010.
232 pages..
ISBN: 9781857885248

Who are the most relevant role models in business today? This book identifies ten top Indian entrepreneurs from sectors as diverse as IT, pharmaceuticals, biotechnology, banking, manufacturing, entertainment and green energy and describes their personal histories, vision and values and approach to business. The book also draws conclusions about factors within the Indian business environment - the approach to corporate social responsibility, the advantage of the fast growing domestic market at the time of global recession - and their contributions to these successes.

An interview with Jaideep Sengupta specialized in Consumer Behaviour

Over a week ago, as a part of the 9th module of the SKOLKOVO Executive MBA programme, the second group studied a Consumer Behaviour course.

A complicated science of consumer behaviour was taught by Professor Jaideep SENGUPTA from the Hong Kong University of Science & Technology.

Professor Sengupta agreed to give an interview and discussed some professional subjects with us.

- You teach a very interesting subject at the interface of psychology and marketing. Does it help you in your everyday life to know the consumer behaviour model or the theory of consumer behaviour?
- Yes, I think it’s important because I spend a lot of my time studying all marketers trying to influence it. So if you’re aware of that, then to some extent when you are watching an ad, you can look at it itself and the influence it makes, and then you can guard against that a little bit. But there are so many things that are done, that marketers do and that we react to as consumers in a really unconscious way then even if you know about it, it’s very hard to guard against it. Well, I’ll give you one favourite example first. There’s a study that showed that if you’re in a wine store, I mean if you’re shopping for wine and they are playing classical music… When you’re hearing the classical music you’re more likely to buy more expensive wine, because it is in that state of mood. But if they’re playing this modern pop music, though you think of yourself as a sophisticated person, but then you kind of get down on your knees and buy the cheap wine. But that kind of thing you can’t even arrest. This is unconscious.

- You know that cultural differences have a direct impact on our behaviour, consumer behaviour. Can you give any striking examples?
- There are lots of them. I think one of the examples I actually use in my classes... You know about a Marlboro man? That was started in the US. Whenever you see the Marlboro man in the US typically or you used to see, because in these days he’s not popular any more, so back in the old days. All you see is one cowboy, just one man, because the US is very much about the power of the individuals standing out or doing their own thing. Now when Philip Morris, a parent company, took this label to Japan, it didn’t work at all. Japanese consumers felt sorry for him. The reaction was like to a poor man, he can’t be doing very well, he has to work alone. Then they showed several cowboys together. It’s the power of the group that is much more important in Japan. It’s a more collectivist culture. There are lots of other examples.

- Do you apply different approaches to teaching in different countries?
- To some extent, but I think it’s a basic theory. The consumer behaviour, the theory that I drop on the psychologist theory, that I drop on better about human behaviour, about human code. And the theory doesn’t change. Also in terms of how students interact in some countries. Now I’ve had a pleasure of teaching in many different countries. I’ll show an example when I teach in China. There’s a more reluctance of speak up, which I don’t see in Russia. So that’s why I encourage more group activity and so they speak at the group, which makes it easier for them to do that.

Professor Pierre Casse: Russian managers love challenges

We offer you an interview with Professor Pierre Casse in which he tells about his teaching experience and explains how SKOLKOVO students differ from students of other business schools

Pierre Casse was once a staff development specialist at the World Bank and one of the highest-paid business trainers in the world. He teaches courses on leadership at business schools in Germany, USA, Slovenia, and France, writes books, and consults multinational companies. Mr Casse has been a professor of leadership at SKOLKOVO since January 2009.

- Why did you accept the offer to teach at SKOLKOVO?
- When I was invited to Moscow, I thought—why not? I got here and I really liked it—the atmosphere, people’s reactions, their openness and thirst for knowledge. People are very warm here. And I appreciated the strong entrepreneurial spirit of the SKOLKOVO project itself. The creation of a Russian Harvard is a brilliant project, not only for Moscow but the world. It’s a very ambitious project, but not an easy one.

- I know that you love to learn about cross-cultural differences. What is your impression of Russian students?
- First of all, managers in Russia love challenges like no one else. They enjoy it when someone riles them up. Second, they love to discuss ideas and get very emotional doing so. Nowhere else in the world have I seen students pound their fists on the table while discussing case studies! They get carried away and shout while they are solving problems, making a big mess. But they get results. German students maintain perfect order in the auditorium, but they don't come up with any new ideas during discussions.

- And what don’t you like?
- I spend time with students and with managers of major companies for whom we conduct seminars. They are happy to raise their level of management expertise, but when the discussion turns to whether they will be able to apply their new knowledge, many of them begin to claim that they aren’t able to change their organisation. They often mention bureaucracy and corruption. The problem of how to apply education is not one that comes up only in Russian business schools—it also exists in the USA, but here it is more noticeable. A person is open to new ideas, but is not ready to put them into practice. That’s absurd. Perhaps this can be explained historically, since people in the Soviet Union were directed from above for so long—they were told what to do, what not to do. I tell my students—don't try to change your company or country all at once. Change the environment around you. Create a community of people like yourself. They say—yes, I can do that. But I want to say that the new generation of Russian managers is very different from the old one. They hungrily seize upon something new, ready to take the initiative, change, and take risks.

“Life Alert” - SKOLKOVO students' project

Students from the first SKOLKOVO MBA intake have been busy with their start-up projects: projects of all teams are to be presented before a strict expert jury as early as in December.

Today we will introduce you with one of the projects of our students called “Life Alert”. High techniques help to care about our health and health of our nearest and dearest. We talked with one of the members of team, Dmitry Yurchenko.

- Dima, please give details of what you are working at?
- It concerns a serious, really terrible problem that many of us face. Let’s imagine an elderly person; to make it more illustrative, let it be Santa Claus who is known to everyone from childhood. And now let’s reconstruct a critical situation. An early morning, he isn’t completely awake yet, he goes to the kitchen to make a cup of hot tea. Suddenly he loses balance that actually often happens to elderly people. Falls down. Statistically, when falling, unfortunately, elderly people don’t have time to react and protect vulnerable spots, so falls are very dangerous for them. That is what happened to Santa Claus – he started falling, hit himself hard, lost consciousness, bleeding began…

Some time later he came to consciousness, felt all his body aching and incredibly weak, so that he was incapable to turn on his own. Time went by; he couldn’t find strength to call for help and kept on lying on the cold floor. Two hours later his muscles started to decay (myoglobin decays), another four hours later his kidneys stopped. Santa Claus lay, suffered and knew that it was long till the next New Year, so no one was likely to come to see him…

Some hours later it was impossible to save Santa Claus at all. But to turn him over in order to suspend those terrible processes would be enough.
Just imaging how many elderly people, lonely or living separate from their relatives, face such critical situations…
What do you think could have saved a life of Santa Claus?

- If his grandchildren had learnt somehow what happened…
- Right! If Santa Claus had a chance to call for help, if there were a help call button within his reach – on his neck or wrist, for instance – his life would be saved. It is that we are working over now – we are developing a business plan for the life save button. Our project is called “Life Alert”. It can seem to sound simple that some single button can dramatically change the state of things, save a human life, but that’s what it is.

Let’s examine another scenario: let’s assume that Santa Claus didn’t come to consciousness after his fall and, consequently, was hypothetically unable to press the button. We have a solution for such cases too – a fall sensor. This is a device with a sensor which can distinguish daily actions from falling and send a warning signal of a possible fall to an emergency response console “Life Alert”. More advanced versions of this device can control a location of an elderly person by GPS, read an electrocardiogram, monitor an organism response to medicine taken, detect critical organism indications and inform a patient, a doctor and family members of a possible danger to health and life of the person.

- A story with Santa Claus is very sad. How often does it happen?
- Very often! There are more than 18 million elderly people over 65 years old in Russia. Over 7 million of them will statistically fall this year, with most of them falling again during the year with various severe consequences. About half of those who fall at this age cannot get up unassisted. Over 7% of falls result in fractures for the elderly. About 10% of falls end in severe head and internal injuries. It means that since you and I started talking (and you started reading this interview), several tens of the elderly have fallen, with many of them lying waiting for help.

Practical leadership course

Pierre Casse is one of the most outstanding lecturers at SKOLKOVO. We have written about him a lot in our blog, but he became even more popular, after his lecture read on the Open Day was published. Many people regretted missing his workshops. But now everyone has an opportunity to communicate with this outstanding man personally. Pierre Casse will hold a “People Leadership” programme.

This is one the most popular SKOLKOVO programme. It allows participants to take a look at sources and principles of leadership, to diagnose key aims of a leader, to improve leadership competences and find a personal way of a leader who will inspire other people.

Programme objectives:

• Define characteristic features of a leader in a turbulent environment
• Understand individual motivation under uncertainty
• Promote creativity and innovation in people and teams
• Acquire a selection of leadership skills to mobilize individuals, teams and organizations

The programme will be held on December 1-2 on the Campus of the School. You can find more details at our site

Pierre Casse will be accompanied by Professor Paul Claudel from Aix-en-Provence University Business School (France) who is also an independent consultant and holds corporate workshops all over the world. Key subjects of his courses are HR management, leadership and business philosophy.

Paul Claudel is an author of several books on leadership and philosophy. His recent book “Philosophy for Creative Leadership” was written together with SKOLKOVO Professor Pierre Casse.

SKOLKOVO MBA student Edward Khamaza: 3D projection as a new art form

We are offering you an amazing performance that brightened a Town Day in Kazan – a 3D projection show onto the building. This performance was prepared by Edward Khamaza, MBA SKOLKOVO student (first intake). An interview with Edward Khamaza about his project is coming soon!

We are offering you an amazing performance that brightened a Town Day in Kazan – a 3D projection show onto the building of the Tatar Academic Theatre of Opera and Ballet.
The best of all would be to see that type of show live, of course, but we are confident that a camera view won’t mar general effect.
You might have heard about 3D projections onto buildings, but it’s the first experience of that kind in Russia.

This performance was prepared by Edward Khamaza, MBA SKOLKOVO student (first intake). We suggest you watching a video first, and then reading an interview with Edward.

- Edward, how long have you been making projection shows?
- As regards production of 3D projections onto buildings, I didn’t start it until this year. It had occurred to me before, but while I studied, I wished to implement it.

- What was it that encouraged you during your studies at the School?
- At SKOLKOVO I found time for creative work and got eager to do something I had had no time for, when I did business at my company Smart&Bright Lighting. While studying, I managed to get beyond the limit, show a freedom of thought, let loose creativity to make something new. The atmosphere is appropriate: an entrepreneurial spirit at the School cannot but encourage you in experiments.

- Is there any connection between the area of projection shows and your company?
- A new company is called Smart&Bright Production. My company Smart&Bright Lighting is engaged in design and light design of architectural and indoor lighting at a highly professional level. We offer our customers interesting, non-typical but at the same time functional and economically sound solutions. So there is no direct connection. But my partners took part in implementing the first project and are supporting me now.

The Rise of the Emerging Market Global Middle Class - is a new research of SKOLKOVO

The economies of the emerging markets have made great strides in recent years and in some cases decades. Hundreds of millions have been lifted out of poverty in both China and India. For the first time in history, these economies are leading the world economic recovery. Collectively, their foreign exchange reserves amount to 20% of world GDP. Despite all this progress however, they still essentially lack a sizeable global middle class. While hundreds of millions may no longer be classified as living in poverty, as defined by the World Bank, relatively few have the purchasing power of the great middle classes in the rich, developed world.

This paper will examine what this rise might look like and some of its economic consequences for the global economy.

The highlights from this month’s brief include:

• This is history’s third great middle class surge, and this time, it is coming exclusively from the emerging markets
• China has at least 400 million people on the threshold of becoming globally middle class. It will lead the world in adding people to these ranks over the next 15 years
• India will replace China as the biggest contributor to the global middle class around 2027
• Asia, currently home to 28% of the world’s global middle class, is projected to account for two-thirds by 2030
• In terms of its impact on global economic growth, consumer spending between the emerging and developed market economies is now roughly equal.
• While income inequality may be rising rapidly within most countries, the distribution of global income among countries is rapidly becoming more equal.

An interview with Alexander Osterwalder

Lately we have told about a special master class on creation of business models given by Alexander Osterwalder to the MBA SKOLKOVO students. Below is an interview with Alexander after his lecture

-What is your general impression of the School and SKOLKOVO Campus?
-I think it’s great! And specifically what I liked is the work places - that’s the first thing that I noticed. It is a perfect environment for my work – these paint walls, you can use them to draw on, to stick up things. That’s actually pretty rare, either in schools or meeting rooms, you wouldn’t meet this kind of infrastructure which is necessary for creative thinking.
Besides the new building, which is nice too, but also having such comfortable classrooms that help you to do creative work - that's brilliant. These are my first impressions about the school.

- What else do you need for your creative work?
- Brilliant people (laughs). So the class is fine, there are many people from different countries. Some of them are entrepreneurs, they want to go to entrepreneurial career, some of them want to return to their companies. So the group of students is excellent to work with.

- Do you feel the cultural differences of students' learning?
- It is difficult to generalize. There are certain differences, but I can only speak from my experience, from the groups I worked with.
So, I would point out one common feature: it is difficult to the entrepreneurs to put themselves into the shoes of the customer before designing a new product or service or a new business model. In some countries, it becomes a kind of norm. In others it doesn’t. For example, in Europe I’m working with a pharmaceutical company on service innovation, and they can’t put themselves into customers’ shoes in different countries. So there are certain cultural differences from one country to another, and differences in one business area to another.

Advice on business literature from Helen Edwards

We are pleased to present you a regular fresh selection of books from Helen Edwards, a SKOLKOVO Library project manager. You can read her previous advice on business literature here.

1. Fault lines: how hidden fractures still threaten the world economy
Raghuram G. Rajan
Princeton University Press, 2010
259 pages
ISBN 9780691146836

Just announced as winner of Financial Times Business Book of the Year 2010, Fault lines was written by one of the few economists to see the financial crisis coming. The book shows how the collective effect of individual choices, in themselves a rational response to the prevailing economic order, had the effect of exacerbating flaws in the financial system, leading to meltdown. The author believes that the dangers from the economic crisis are far from over and outlines the steps he thinks necessary to avert them.

And see http://www.ft.com/indepth/business-book-award-2010 for details and excerpts from all the FT short listed books.

2. The Facebook effect: the inside story of the company that is connecting the world
David Kirkpatrick
Virgin books, 2010
372 pages
ISBN 9780753522745

With the film The Social Network http://www.thesocialnetwork-movie.com/site/ just out, the Mark Zuckerberg story is attracting even wider interest. This book, also shortlisted for the FT Business Book of the Year award, was written by a reporter with inside access to Facebook's founders and key executives including Zuckerberg himself. It describes how Facebook was created but also the company's business culture and beliefs, its use of engagement marketing and the concept of "gifts" as the "cool" approach to advertising, how it makes money and its extraordinary impact on global communications.

3. The coaching kaleidoscope: insights from the inside
Manfred F. R. Kets De Vries; Laura Guillen Ramo; Konstantin Korotov and Elizabeth Florent-Treacy
Palgrave Macmillan, 2010.
256 pages
ISBN 978-0230239982

The purpose of executive coaching is to develop the practice of reflection for the benefit of individuals and their organisations. This book, based on experience at the INSEAD Global Leadership Centre and the European School of Technology and Management, Berlin, describes the research methodologies, interventions and techniques used for leadership development. There are also contributions from those experiencing coaching giving their view of their personal development.

Business Model Generation with Alexander Osterwalder

In the early October in our “Advice on business literature from Helen Edwards”  we suggested you to read the book “Business model generation” written by Alexander Osterwalder and Yves Pigneur.

And in the middle of the month Alexander Osterwalder came to SKOLKOVO to personally share the secrets of constructing a variety of business models with the first intake of SKOLKVO MBA students. The students have just got down to the final module – building up their own start-up projects.

Alex Osterwalder’s concept of business models is simple and clear and it is always based on the visualization. He especially emphasizes the importance of Design Thinking as a new trend in modern business education. Alex says:

“In business we trained to decide between different options – A, B, C. But that’s the past. The future requires people to be innovative and creative. So it’s not just to be able to decide between A, B and C, they must have the ability to create alternatives, new possibilities, that’s what really important. So you need to educate business students to do that. And business schools are not very well equipped to do that. So typically what do they do? They look into design methods – how do designers work, how do architectures work… They try to teach those methods to business students to create new strategies, new business models, new services”

We will post the full interview with Alex Osterwalder soon. In the meantime, you can read students’ impressions from the workshop.

How an office impacts success

Article by SKOLKOVO MBA student Anton Saraykin
You can find an original article www.forbes.ru

We are leaving a conference room with green walls and violet pouffes for a hall where I almost stumble over a huge white dog wagging in a friendly way. After a rusty printing-press towering over a heap of coloured stuffed toys I’m not surprised with tomatoes sticking out of flowerpots. “Our chef grows them for salad”, mentioned Steve Winter, Director of Google office in Cambridge, without stopping. “I wonder how they manage to remain the most successful internet company in the world among such a chaos.”

Beside studies in classrooms that I described in the previous post, in the USA SKOLKOVO students work on probation at local companies – from a biotech corporation to an internet start-up dealing in used gadgets. My team consisting of five students asked for Cambridge Innovation Centre (CIC), a co-working space for start-ups. We develop and realize a marketing strategy of international expansion for CIC. In other words, we help attract to the office those entrepreneurs from abroad striving to enter the US market. CIC’s offices are lent by about 300 small start-ups, with average age being three years. Till recently one of the lessees was Google’s Cambridge office until it moved to a detached building where I made for to find ideas for CIC.

Electric guitar for an office

“How long can they play?”, I asked Steve as watching four programmers who arranged a ping pong tournament at the office right in the middle of a workday. Steve just smiles back and I understand that my question is inappropriate. There is a heap of electric guitars, training apparatuses and basketballs in the “playroom”, and there are several of them in the Google building, there is a drumkit in the corner and a tent put up for some purpose. “We carried instruments here from the studio, because rehearsals of our rock band disturbed a neighboring company behind the wall”, Steve explains.

Photos from the SKOLKOVO Anniversary.

We suggest reviving your impressions of the Fourth SKOLKOVO Anniversary!

Specially for you - a selection of photos from the festival:

Pierre Casse’s lecture about leadership given on the Open Day

On the Open Day of the School  Pierre Casse, SKOLKOVO Leadership Professor of Leadership, gave a lecture on a general topic “Leadership: Old Facts and New Trends”. We suggest you acquaint yourself with its main points. It’s understood that a speech put on paper will never substitute a live lecture and energy of the speaker, but we’ll try :)

Professor Casse spoke close to the topic announced, with his theses being both clear and encouraging discussions, so the audience asked several questions which resulted in a discussion.

When giving a lecture Pierre Casse always intersperses it with a great number of jokes, funny stories from his life presenting them as lessons of life. This form of lecture does allow the audience to better learn the stuff.

The article based on Professor Casse’s lecture is rather voluminous. We were afraid to miss something important and useful to you. To make the text more convenient to read, we structured it as clearly as possible. Have a nice reading!

First of all, in his lecture Piere Casse emphasized an important point: you can be a good leader, only if you fight for what you believe in. Leadership is not a set of universal rules, it is a person’s quality and a sort of state, where a key part is played by personal characteristics.

Common facts and useful advice

Widespread mistakes that leaders make:
1) Know everything
When you know an answer to any question, you deprive your people of their own thinking. When you always try to give assistance, you deprive them of responsibility for the result. Give them free space, let them breathe in!

Advice on business literature from Helen Edwards

We are glad to present a fresh selection of interesting books from Helen Edwards, a SKOLKOVO Library project manager. You can read her previous advice on business literature here.

1. Business model generation: a handbook for visionaries, game changers and challengers
Alexander Osterwalder and Yves Pigneur
John Wiley, 2010
281 pages
ISBN 978-0470-87641-1

This book lives up to its name in that it provides the tools to generate new business models. Packed with pictures, diagrams and real life business stories, it breaks down the complex process of understanding today's business models. This book clarifies how seemingly counter intuitive business models have transformed whole industries and reveals how readers can apply these same techniques to create value for their own businesses and within their own organizations.

2. The lords of strategy: the secret intellectual history of the new corporate world
Walter Kiechel
Harvard Business School Press, 2010
320 pages
ISBN 978-1591397823

The history of the four men who formalized corporate strategy and set in motion the modern consulting industry: Bruce Henderson (Boston Consulting Group), Bill Bain (Bain & Company), Fred Gluck (McKinsey) and Michael Porter (Harvard Business School). The book describes the ideas and analysis applied to developing business from the customers, costs, competitors paradigm onwards and shows how a small number of models and frameworks have dominated management thinking in thousands of companies.

3. The hidden brain: how our unconscious minds elects presidents, control markets, wage wars and save our lives
Shankar Vedantam
Spiegel & Grau, 2010.
270 pages
ISBN 978-0-385-52521-3

Written by the Science Correspondent of the Washington Post , this book describes how the hidden brain operates, its focus on speed and how it may apply heuristics to situations where they do not work. The book follows these unconscious biases from small decisions in private, social and professional settings, to major life choices, personal and business, and finally to issues which affect society as a whole, small groups and terrorism, the criminal justice system and politics.

The Social Innovation Agenda in BRIC

The 19th of September was marked by Open Day at SKOLKOVO. As part of the event some master classes were conducted by professors and experts of the School. Today we will tell you about one of them, namely “Sustainable Growth in Emerging Markets. The Social Innovation Agenda” made by Meng Zhau, Assistant Professor in Strategy and Organization.

Social innovations are, by nature, implementation and promotion of social programmes. They can be seen everywhere: at schools, hospitals, government and even in business. In general, this is philanthropy.

Social innovations substantially belong to nonprofit institutions. But big profit companies also participate in social events. For instance, Ford takes an active part in fighting AIDS, Levi’s is fighting racism an so forth. Besides Meng Zhau mentioned that companies changed a philosophy of business conduct itself: from how to earn to how to impact. They move from stock activities to a possibility to impact shareholders’ decisions. Companies act as social change agents.

One of the most successful examples of social innovations is microfinance (granting of micro-loans to low-income clients). This approach is successfully developed in Asia. In India 40 million people who live rough are engaged in microfinance. For instance, according to one of the models people received amounts of about 10 dollars to purchase, e.g. poultry, cattle or seeds. For a year those people could improve their economy, rise to their feet, repay a loan and continue their business. In China as early as in 1998 100 million people in villages and provinces took microfinance opportunities for a total amount of about 89 million dollars!

It can be said that venture philanthropy is moving from Europe and the US to Asia. According to US National Intelligence Council, 1.5 billion people will have been able to get to the middle class by 2025.

Mountaineering And Leadership

"Follow the hero. Be prepared to go to the limit. Be a why-not'er - yes-but'ers kill companies", that’s how Herbert Henzler summarized his speech about “Mountaineering And Leadership” on the Open Day of SKOLKOVO.

Do you want to know more about Professor Henzler’s lecture? It gives me pleasure to describe its key points below.

It is “Mountaineering And Leadership” that I chose to attend on the Open Day at
SKOLKOVO last Sunday.

Its name thrills, but one can draw rather slight analogies in those two areas. So it was very interesting to listen to what can be said on this topic for an hour and a half.

Generally, the workshop was based on analogies between principles Reinhold Messner (one of the most famous mountaineers) follows when preparing an expedition and principles of achieving goals in business. The analogies are very bright and demonstrate the necessity of a competent approach and a thorough assessment of one’s own resources.

These are some points that one should take into account as recommended by Professor Henzler:

1) Innovation approach.
What was Messner’s innovation and what does mountaineering have to do with it? In fact, Messner has greatly changed an approach to mountaineering as such. While 200 people used to form a group with lots of provisions and all that it implied to reach a peak of the Everest, Messner said that he would do the same with a minimum number of people, with minimum possible provisions in order to decrease weight and time required for the very expedition. The point is to plan a path without any unnecessary thing on the back (Messner even didn’t take oxygen cylinders). Yes, this path will be travelled at maximum efforts, but that’s the way the
result is achieved.

We should make a small reservation here. You should try to achieve your goal, but if at some stage you feel that you’ll fail (and it’s not late to return), you’d better stop.

2) Leader
A team must have only one leader. Yes, he can be wrong, yes, he can ignore advice. But if a person is not ready to follow him till the end without doubting his role, it‘s better not to start at all. Doubts result in conflicts that can lead to unfortunate results – both in the mountains and in business.

3) Team
It logically results from the previous item. Generally, an issue of forming a team will always be problematic. One can never 100% predict if a person will become a good or bad member. Anyway, members of your team should understand: since they joined you, there is no return. And at difficult moments they will have to extend themselves.

4) “Be a why-not'er”
One of the key principles is to ask “Why not?” It is the question that leads to the greatest progress. However, in reality most of us belong sooner to the second group - “yes-but'ers”. As a result, a majority of innovations decline in the state of ideas. We like stability and dislike taking risk – it’s our lot and we should struggle against it.

I hope that my summary of Herbert Henzler’s lecture will be of use and help you in building relations not only at work but also in other spheres of your life!

SKOLKOVO’S Innovative Diplomas

On September 19, SKOLKOVO had its first official graduates! Students from the first Executive MBA class finished their studies in July 2010 and they became official graduates during the celebrations of the fourth anniversary of SKOLKOVO!

After solemn speeches and congratulations, Igor Shuvalov, the first deputy prime minister of the Russian Federation and a member of SKOLKOVO’s International Advisory Board, personally awarded diplomas to this group of 21 EMBA students.

There was a creative approach to the design and format of the school’s first diplomas, so that this event would be as memorable as possible for everyone involved.
Made in the traditional violet shades of the Executive MBA, it is no accident that the diplomas resemble a fairly hefty book. But on the inside, in addition to the usual educational information, there's a surprise for the graduates. Several seconds after opening the diplomas, a video begins playing on a monitor on the right side of the card. It shows a clip about the past 18 months of the program and how this group of strangers became a tight-knit team.

Innovation: Design or Technology?

We continue telling about our experts and lectures that you can attend on the Open Day this Sunday.

We have spoken with Dmitry Repin, SKOLKOVO Start-up Projects Director, about his lecture “Innovation: Design or Technology?”

- Please can you tell us what your speech on the Open Day will be about?
- The lecture deals with a process of generating innovations and new products and services which are focused on a customer, a so-called “human-centered design”. We’ll try to outline an approach to creation of innovations and give some practical tools that will be of use there.

- What kind of audience is the lecture meant for?
- We intended to make the lecture not specific, but accessible to anyone who knows little about economics and social processes.

- Who will be speaking together with you?
- We will conduct this master class with Alexei Nikolayev: he is a director of Intel academic programs in Russia and in charge of cooperation with institutions of higher education. He has a good understanding of Design Thinking, and we actively work with him on a joint project between SKOLKOVO and Intel - Innovation Design Lab. By the way, the methodology that we will describe at our master class is those key ideas which were established at Innovation Design Lab.

- Will the audience have an opportunity to speak to you after the lecture and ask questions?
- Yes, of course. I will be on the Campus all day long, so I will be pleased to talk to anyone who will visit the SKOLKOVO Open Day!

Emerging Market Odyssey

The education offered at SKOLKOVO business school is oriented to studying emerging markets which imply both high potential and great risks. 2008 saw a beginning of world recession that had reversed world economy. The chief arena was occupied by developing countries. It is then that BRIC countries became an even more attractive area to do business. What role do they play in world economy indeed? Why have they attracted more and more attention? If you are interested in those issues, we suggest you listening to such experts as William Wilson and Meng Zhao.

Meng Zhao - Assistant Professor in Strategy and Organization Skolkovo and Research Fellow, Skolkovo Institute of Emerging Market Studies. Research: Emergence and Evolution of Organizational Fields, Social Entrepreneurship & Corporate Social Responsibility in Emerging Markets and others
Meng Zhao also researches Diffusion theory. Diffusion theory's main focus is on the flow of information within a social system, such as via mass media and word-of-mouth communications

William Wilson - Dr. Wilson is a macro and financial economist. He has over a decade experience researching and forecasting the economies of the emerging markets. He produced branded research on India’s economy. For instance, "The India Century", where he sets forth a well-grounded theory that by 2030 India will have left behind China and ranked third in world economy.

One can read their books and articles, listen to their speeches on TV. However no one will argue that it’d better to talk to them face to face. All the more so, on the SKOLKOVO Open Day Meng Zhao will hold a master class on a topic “Sustainable Growth in Emerging Markets. The Social Innovation Agenda”, with William Wilson’s topic being “Emerging Market Odyssey: Where From Here?”

New Trends in Leadership

SKOLKOVO School trains not just managers, but business leaders, so it is students’ leadership qualities that are particularly developed during the training. The best practice in this field is provided by SKOLKOVO Professor Pierre CASSE, an author of more than 10 books in the areas of multicultural management, leadership, intercultural negotiations, and philosophy and business

You have an opportunity to visit his lecture personally: for the Open Day Pierre CASSE has prepared a speech on “Leadership: Old Facts and New Trends”.

A short video presentation about Professor Casse:



We bet that the lecture on leadership would be the best visited on the SKOLKOVO Open Day! :)

SKOLKOVO School welcomed new students!

The School started a Full-TIme MBA programme for the second group of students late August. The second group includes 33 young and self-confident leaders, full of enthusiasm, who wish to study, learn new things and change the world around them! One third of them comes from all parts of the world - the USA, the UK, India, Brazil, Spain, Germany, Finland, Austria.

New students will live and study in a new hospitable building - SKOLKOVO Campus!

Here are slide-show and quotations of some students.




Christian Graggaber:
“After 6 years of work experience in both emerging and established countries Skolkovo gives me the possibility to get additional entrepreneurial and academic experience in emerging countries in an out of the box thinking environment. The diverse international mix of students from a variety of sectors gives me the opportunity to widen my knowledge pool by tapping into the diverse expertise of the other students”

Corporate Giants and Economic Growth - is a new research of SKOLKOVO

Historically economic growth depends crucially on profit creation and the appreciation of asset prices. Although the vibrant sector of small businesses in many countries is the workhorse for generating jobs and emancipating the poor from poverty, profit creation and wealth accumulation however, more or less take place mostly at large scale enterprises.

In a new policy paper, the SKOLKOVO Institute for Emerging Market Studies (SIEMS) studies the largest 400 companies in China and Russia

The research separately reviews a contribution of private companies, i.e. such companies where
the majority equity share of the company is owned by individuals and parties other than the state, and corporate decision making is not controlled by the state.

About 80% of the companies making into the top list are private companies in Russia, while only 18% are private companies in China. The above comparison confirms a current opinion that the private sector in Russia plays a more prominent role than in China.

International humanitarian leader visits SKOLKOVO!

Today our Campus was visited by Sri Sri Ravi Shankar, an international humanitarian guru. A special lecture given to SKOLKOVO students was the first one during his visit to Russia.

The speech was officially devoted to business ethics, but participants had a lot of questions to Sri Sri Ravi Shankar, so finally he touched upon a great number of truly important aspects of human life. He spoke about calmness and happiness, about stress and strength of mind, about leadership and enthusiasm.

Today we offer a short video from the morning lecture, a piece of oriental wisdom. A full report will appear soon.



According to Forbes, Sri Sri is one of the most influential people of India. He is justly considered a world spiritual leader – he is welcomed everywhere with love and respect. “I feel at home wherever I am”, Sri Sri says.

Sri Sri visits over 40 countries every year. He plans to make a long tour through Russia associated with a world week of yoga: Saint Petersburg, Moscow, Kazan, Irkutsk…
We are very happy that Sri Sri found time to personally impart his valuable knowledge to SKOLKOVO students!

Recent news form “Kruzenshtern”

Hello again! We have just received a new report from Dmitry Repin - our “press-attache” aboard the “Kruzenstern” barque! =)

Here it is:

“Yesterday evening both SKOLKOVO rowing teams received prizes from Kruzenshtern officers, the boys team was especially recognized for not giving up and making the finish, being real men. This morning we are preparing to more mast climbing and will have a session with captain after lunch”.

“All morning we climbed masts. People talked about overcoming their fears and some climbed very high – 40 meters and more. Two people from the third intake EMBA climbed to very top of the tallest mast, 1st Grot – Respect!”

Kruzenshtern's update

Dmitry Repin continues sms transmission from aboard the "Kruzenshtern" barque! We're pleased to keep you updated!

"Today SKOLKVO team climbed masts. 1st and 2nd grot masts. Most people got to 2nd mast – about 30 meters above the deck. Also got to walk on the sailyard. Super exciting! It’s sunny and calm seas".

"Kruzenshtern is lying adrift near Skagen, northern tip of Denmark. We all just got to go on lifeboats around the ship. Now two SKOLKOVO teams are preparing to the race in lifeboats around the ship, A boys team and a girls team will race against Kruzenshtern cadets".


"Our boys team failed the first time, but then got some snacks and with renewed powers manager to row against wind and current and finished in 12 min 38 second the race around the 114.5 meter ship. The unlimate teamwork".

Advice on business literature from Helen Edwards

The First of September is the Day of Knowledge!
We sincerely congratulate everyone who follows a difficult path of knowledge, who learns something new and gets an invaluable life experience.

Today we're presenting a new selection of books from Helen Edwards, a SKOLKOVO Library project manager. You can read her previous advice on business literature here.
Hopefully, there'll be only helpful and interesting books in your sack and you'll use them in practice!

1. Market Rebels: how activists make or break radical innovations
Hayagreeva Rao
Princeton University Press 2009
222 pages
ISBN 978-0691134567

This book identifies the key role of activists in promoting or impeding the adoption of radical business innovations. Technology may be ready but social and cultural factors determine whether a product takes off or flounders. Getting people angry or excited "hot causes" or kicking off a trend with which people identify "cool mobilization" can invoke collective action to create or constrain markets. The challenge for the manager is to "think like an insurgent" to make effective use of these powerful social forces.

2. Made in China: secrets of China's dynamic entrepreneurs
Winter Nie, Katherine Xin and Lily Zhang
Singapore: Wiley (Asia), 2009
224 pages
ISBN 978-0-470-82436-8

It seems that everyone wants to do business in China. However it is often China's own entrepreneurs rather than other multinationals which are the real competition. These private companies, now supplanting state owned enterprises and being set up by Chinese business people from all kinds of backgrounds and often with little initial capital, are succeeding by knowing their own markets and culture, readiness to adapt and resourcefulness.

News from a waste of waters of the North Sea

We are here again to share some news with you coming from the Kruzenshtern barque, which is making a historical voyage with our students aboard – from Bremerhaven (Germany) to Klaipeda (Lithuania).

Dmitry Repin contacted us somewhere from a waste of waters of the North Sea to give details about their living aboard.

On Monday evening after dinner SKOLKOVO group met with Kruzenshtern Captain Mikhail Novikov and had a very long discussion about people, countries and everything else, the discussion lasted well into the night. Yesterday in the morning SKOLKOVO students participated in the helping in putting up the sails, pulling lines, working on winches, basically doing everything along with the crew and cadets to put the sails up.
Now sailing under sails at about 9-10 knots, the sea is still dark and rough. In the Tuesday afternoon they discussed survival at sea, working on Alain Bombard case, and later in the afternoon senior botsman showed us how the ship’s crew can fight for ship’s survival. Some of skolkovites trid out the professional survival suit.

Have you already felt the sense of salt sea? Watch the news!

Godspeed!

Today is the beginning of an unusual trip of SKOLKOVO students! Today is the day when the Kruzenshtern barque is departing!

Just a while ago Dmitry Repin, our unchallenged captain of sea craft, connected with us.

He says that SKOLKOVO group has received instructions about emergencies, mast climbing and doing sails.
Today they will have the first sailing rush job - will help to put up the sails. He says “Everyone is excited and wants to participate”.

You can see some pictures below. As we receive more pictures, we will add them in our set on Flickr. All of them will be taken during the trip, so let's be charitabl to their quality :)

Just F***ing Do It!

The first two weeks of studying in the USA probably became one of the brightest and busiest periods of time spent at SKOLKOVO. We met successful entrepreneurs, famous scientists and defended our business projects in front of real venture investors.

SKOLKOVO Students Discover America
After the SKOLKOVO students returned from China and India, they spent two months in Moscow working on corporate projects at Russian companies. Early August a new education stage started: the entire group left for Boston for two months where we undergo training at American companies and study entrepreneurship at a b-school of the Massachusetts Institute of Technology (MIT Sloan).

In fact we live and study not in Boston, but in Cambridge. This town with a population of about 100,000 people is situated over the river from Boston and was built by descendants of the Englishmen who had gone ashore America in the 17th century. Streets of Cambridge are more like London than typical American towns: the same architecture and a similar layout of streets. What Cambridge is famous for is that two of the best-known and most prestigious educational institutions in the world are located here: the Harvard University and MIT.

While it’s needless to introduce Harvard, I will tell you in more detail about MIT, where we study. With a 150-year history this is one of the most authoritative higher educational institutions in the world and a chief engineering institution in the USA. There are a great number of prominent world scientists and engineers with 75 Nobel Prize winners among MIT graduates. A high IQ of local residents is felt in the air. “Even when I’m passing by MIT, I feel a bit more intelligent”, an officer of the American consulate in Moscow who issued our visas jokes.

They like to repeat in Boston that if one sums up business of the companies that have been created involving graduates of the Massachusetts Institute of Technology, the result will be compared with the 17th in succession economy in the world. It is the conversion of discoveries and inventions into money that MIT Sloan stakes on; we are taking a course of entrepreneurship there.

Geeks and angels
The area around Kendall Square in Cambridge where buildings of Microsoft and Google tower opposite each other among MIT blocks is famous for its unique “ecosystem”. This is a place where geeks from the university and people in ties from business meet. While every second person here is an engineer or a scientist, every third person is a venture investor or a business angel.

Sloan students are taught to help geeks transfer technologies on commercial rails. Professors joke that while physicists and chemists sweat over experiments in laboratories, business school students spend all their free time talking at local cafes where they are engaged in “networking” - this word acquires a sacral tint here. American people are convinced that ties determine everything in business.

Every year tens, if not hundreds of start-ups are born in Cambridge. A part of them die, but some of them manage to become an astounding success. I still remember meetings with founders of internet companies KAYAK (online booking of tickets and hotels) and Hubspot (promotion of web sites), each of which has attracted 30 mln USD of venture investments for 3-4 years of existence and shows an explosive growth of profits. “To interest investors, you need about ten simple slides showing business of your start-up and one page of financial expectations. Venture capitalists never read business plans”, Brian Hulligan at Hubsport, a co-author of Inbound marketing describing usefulness of social networks for modern business, gives a recipe for success.

Why to choose a small business school instead of a major one?

Business education is often unconsciously associated with leading world business schools that rank TOP 10: Harvard, Stanford, MIT Sloan, Wharton, INSEAD, etc… It’s believed that if one wants to get an MBA degree, he should get it only at such top institutions, with the others falling short of a high level of educational process.

Is that true? Experts point out a number of reasons why it’s useful to get business education at the b-school which is not in the TOP-10.

We present five most important advantages of small MBAs over major business schools.

1. Trend towards specialization
Hubert Silly, Founder of MBA Center, says:
“More important than the global rankings are the speciality rankings of business schools. A candidate seeking a future career in finance, for instance, would be well advised to choose a school ranked highly in finance-even if that school is not in the "Top Ten" in the overall rankings… Business schools view themselves as specific brands that can appeal to a particular segment of the MBA market”.

2. Individual approach
David Butler, the director of the post-graduate programs at ESC Rouen (France), says:
"One of the most important advantages of a smaller MBA is that they offer smaller programs with ten to twenty students in class, which ensures a better participation and interaction of the group."

3. Unique experience
Michael Houston, the interim codean of Carlson School of Management, says:
"Smaller programs frequently offer more individualized services and leadership opportunities. Some adopt a niche strategy that provides a unique experience. There is more flexibility for learning, connecting with faculty, and internship opportunities than in more prestigious MBAs."

Kamil Isayev (Intel Russia) about Innovation Design Lab

The second part of the interview with Kamil Isayev, R&D CEO, Intel Russia, who heads Innovation Design Lab together with Dmitry Repin. The first part can be found here

- Please let us know your viewpoint on Innovation Design Lab

- An idea of Innovation Design Lab consists in creating some environment on the basis of the SKOLKOVO Campus that would encourage innovations. I see Intel as an injector of ideas. Of course, ideas that we will try to implement there will be close to Intel as a company. They are IT industry, software industry and other modern trends. At the same time an innovative environment created at the Campus should conceive these ideas, process them inventively and produce some product, whether business projects, start-ups, new techniques - such products that can’t emerge in another area. In other words, we start with a set of ideas, including or first of all from Intel and/or our partners and result in business projects of various maturity with a potential to develop and turn into something innovative and new ready to become a component of that knowledge-based economy.

- Please tell us about Intel’s interest in this project

- Innovative Design Lab is especially relevant to Intel at the moment. The point is that the IT market is evolving in an interesting way. In other words, computing devices that we use are rather greatly diversified. Traditional desktops, notebooks, servers located somewhere behing the walls are not enough now; a great number of so-called mobile devices has appeared. Netbooks, tablets, iPad-lie devices and of course smart phones have greatly become intellectual devices.