Focus

Management

The Magazine of Cranfield School of Management

Inside
Collaborate to Innovate
Global Power Shift
Innovating with IT
Project Managers: Lessons Learned?
Releasing Time to Manage
Working through the ZOUD

Managing
the Price of
Food
Issue 30 // Spring 2011 www.som.cranfield.ac.uk/som/mf
Contents Editorial

"We are dedicated to The world continues to change at

making a difference a remarkable pace and as one of
the world’s leading management
- creating responsible schools, it is our aim to help
individuals and organisations to
management practice, stay ahead with the latest thinking
improving business and research.

performance and
16
Our faculty, which is amongst the
Managing the Price of Food inspiring the next
largest and most diverse of any
business school in Europe, are
generation of leaders." actively engaged in consultancy
and business relevant research and are closely in touch with the needs of
business and government. Their commitment to our mission of transforming
knowledge into action and management practice means they are consistently
current and topical in their teaching. They bring not only experience, but rigour
to their programmes. They understand your challenges. They have faced them
themselves and they can help you to do the same.

04 News
08 Innovating
with IT 10 Releasing Time
to Manage 14 Working
through the
A combination of rigorous research and inspirational teaching is at the heart
of everything we do. We are dedicated to making a difference - creating
ZOUD responsible management practice, improving business performance and
inspiring the next generation of leaders. We work to change the lives of our
students and executives by encouraging innovation and creative thinking, as well
You can download the magazine at
as the drive to succeed and make a real impact on their organisations.
som.cranfield.ac.uk/som/mf

This edition of Management Focus tackles some of the many issues facing
If you would prefer to receive the next
managers today, from knowing when and how to innovate to managing an
issue (due out Autumn 2011) electronically,
effective top team. Séan Rickard discusses what needs to happen in order to
or have any suggestions for future topics,
manage the spiralling cost of food and Professor David Buchanan and
please contact Media Relations
Dr Emma Parry share the early findings from their three-year research project
20 Global Power
Shift 22 Project
Managers: 24 Collaborate
to Innovate 26 Alumni interview:
Howard Dickel
on +44 (0)1234 754348 or email
sommediarelations@cranfield.ac.uk
investigating the realities of front-line managers in the NHS.

Lessons (MSc PPM 2010) I do hope you enjoy the read.

Learned?

Design and production Editor and publisher ISSN 1474-1199

Bulb studios Ltd Media Relations No part of this publication may be reproduced or
Cranfield School of Management stored in any form whatsoever without the prior
written consent of Cranfield School of Management.
e: hiya@bulbstudios.com Cranfield, Bedfordshire, MK43 0AL, UK The views expressed herein are not necessarily the
t: +44 (0) 116 2628869 opinion of Cranfield School of Management. Whilst Professor Frank M Horwitz
w: www.bulbstudios.com e: sommediarelations@cranfield.ac.uk every care has been taken in the production of this
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w: www.som.cranfield.ac.uk for the accuracy of the information contained herein.

© 2011 Cranfield University.

All rights reserved.
 News
Distinguished Alumnus
Professor Frank Horwitz, Director
of School hosted the School’s
annual awards evening at the Royal
Institution’s Faraday Theatre in London
in January. The awards recognise
the very considerable achievements
of alumni and students. Guest
speaker, Warren East (EMBA 1990)
CEO of ARM Holdings, who was
announced at the event as the 2011
Distinguished Alumnus,
Supply Chain Award
Congratulations to Professor Richard
Wilding who received the prestigious
Individual Contribution Award at
the recent European Supply Chain
Excellence Awards. Richard is pictured
with the host of the evening, comedian
Rufus Hound and Mark Judge who
presented him with the award.
Professor Wilding has been
described as one of Europe’s leading
“gurus” for supply chain excellence,
4 S P R I N G 2 0 11 MF
Knowledge Online
gave a presentation titled ‘The
future is in our hands’. Warren
talked about how we, as consumers,
can exercise intelligent choices
about how and where we spend
our money and that these choices
impact directly on global issues.
His company ARM Holdings is the
major European designer of silicon
chips that provide the brains behind
countless digital devices.
Entrepreneur Award
promoting supply chain innovation
in an easily accessible way for nearly
20 years.
Richard has helped develop Cranfield’s
Centre for Logistics and Supply Chain
Management into a leading centre of
excellence. The Centre provides an
international focal point for advanced
teaching and research in the field of
logistics, supply chain management and
transportation management.
The Cranfield Knowledge
Interchange (KI) Online has
recently been redesigned and now
offers an even easier route to
the latest relevant and respected
management information from
Cranfield. The site gives subscribers
access to a unique blend of
resources, new concepts, latest
publications and presentations.This
exclusive service enables managers
to use the resources for personal
development and business.
In January, Harry Clarke was
presented with the 2011 Cranfield
Entrepreneur Alumnus of the Year
award. Harry, Commercial Director
at Cobalt Telephone Technologies
completed his Cranfield MBA
in 1992. The award is presented
annually to the alumnus who has
made an outstanding entrepreneurial
achievement and promotes the strong
entrepreneurial spirit present within
the School alumni body.
International accreditation
Cranfield’s Executive Doctorate (DBA)
programme has been awarded the maximum
5 year accreditation by the Association
of MBAs (AMBA). It is one of only three
AMBA accredited DBA programmes in the
UK (and only seven worldwide), which is
testimony to the high standard and rigorous
quality assurance of its programme on an
international scale.
The future of food
Senior Business Economist, Séan Rickard
was commissioned to write a report on the
value of crop protection which was published
by the Crop Protection Association. The
report was launched at the annual Chatham
House Food Security Conference which was
attended by some of the most influential
speakers in agricultural development. Séan is
a leading commentator on food, farming and
rural policy issues and is often called upon to
advise the government.
VentureDay 2011
The School’s Bettany Centre will host the
2011 VentureDay on 12 May. The one-day
conference and networking event is aimed
at entrepreneurs and those interested in
cutting-edge entrepreneurial performance.
Keynote addresses will be given by leading
entrepreneurs including Harry Clarke and
former media tycoon Eddy Shah.
MF S P R I N G 2 0 11 5
 News

Research
Diversity report has huge impact Change at any age
A new study led by Dr Emma Parry,
has revealed that there is considerable
stagnation in the careers of many over
50s. The research conducted for the
Employers Forum on Age (EFA) found
that many employers are not currently
doing enough to prevent this and the
loss of skills and attitudinal problems
that result.
Leadership
Ineffective sales
behaviours
Mobile savvy
shopper
The Harvard Business Review (HBR)
recently published an article discussing
Cranfield’s research project with sales
consultancy Silent Edge.The article by
Professor Lynette Ryals highlights the
key findings from the project. Cranfield
worked with data, provided by Silent
Edge, analysing the performance of 800
sales professionals observed in live sales
interactions. The results identify eight

challenges sets of behaviours in sales meetings. By

The 2010 Female FTSE report from
the School’s International Centre for
Women Leaders revealed another
year of barely noticeable change in
the number of women in
leadership positions of the UK’s
top 100 companies.
The report, complied by Professor
Susan Vinnicombe OBE, Dr Ruth
Sealy, Jacey Graham and Elena Doldor,
detailed that there are just 135 female-
held directorships out of 1,076 on the
FTSE 100 boards. The latest figure of
12.5% highlights a three year plateau
(12.2% in 2009 and 12% in 2008)
signifying a situation of stagnation
when it comes to diversity in
British boardrooms.
Equalities Minister Lynne
Featherstone said: “It is worrying
that women – who make up more
than 50% of the population – still
account for just one-eighth of
FTSE 100 directors. Making boards
more diverse is not about political
correctness - it’s about making sure
companies draw senior staff from the
widest possible pool of talent, which
is good for business, good for staff
and good for customers.”
Lord Davies of Abersoch, former
Labour trade minister was asked by
Business Secretary Vince Cable and
Minister for Women Theresa May
in August last year to carry out a
review to increase the representation
of women on the boards of UK
companies. Professor Susan
Vinnicombe, Director of Cranfield’s
International Centre for Women
Leaders was a member of Lord Davies’
steering committee. The report
‘Women on Boards’ was published on
24 February. Cranfield’s Female FTSE
report was referenced extensively in
articles about the review.
Key findings of a significant new
piece of research from Professor
Michael Dickmann and Dr Emma
Parry have revealed International
NGOs widely agree that they must
improve the speed, quality and
effectiveness of their humanitarian
leadership response to overcome
the challenges that arise from climate
change, global insecurity, scarce
resources and increasing scrutiny
from a wide range of stakeholders.
The research is the result of a joint
initiative by Cranfield and People In
Aid. Funded by ELRHA, the research
aims to help agencies understand the
nature and scope of international
leadership competencies required
over the next decade.
understanding these behaviours, managers
can effect changes in their current sales
force and recruit better team members in
the future.
Public sector
innovation
A study into public sector innovation
carried out by Professor Keith Goffin
and Dr David Baxter showed that public
sector managers need more guidance on
commercial partnerships in order
to make them work effectively.
A survey revealed that only a minority of
respondents were able to give examples
of successful service innovations in the
UK public sector, and very few of these
examples were commercial partnerships.
A new report co-authored by
Dr Silvia Rossi and Professor Richard
Wilding raises serious questions about
the ability of Britain’s current data
infrastructure to support the growing
development of mobile telephone ‘apps’
that provide shoppers with additional
product information. The study done in
partnership with GS1 UK, examined the
quality of product descriptions and image
data available in three of iPhone’s most
downloaded third-party, generic barcode
scanning apps. Only 9% of scans returned
the correct product description when
compared with the approved data.

6 S P R I N G 2 0 11 MF MF S P R I N G 2 0 11 7

Innovating
A framework developed by Cranfield can help
organisations to consider and assess their
current approaches to business innovation with IT.
I
nformation technology is
now part of the very fabric
of almost all organisations.
Indeed, few could survive for very long
without their IT systems. While IT
provides tremendous opportunities
for innovation, most non-technology
organisations struggle to take advantage
of these opportunities. A global survey
that we conducted as part of our
research to help such organisations be
more proactive in their approach to
business innovation with IT, revealed that
only 14% of large companies believe that
they are maximising the potential of IT.
This is an astounding statistic given the
potential that technology offers.
Opportunities for IT innovation
come from one of two sources. IT
may respond to requirements that
come from the business, what is known
as ‘business-pull’. Alternatively, ‘IT-push’
8 S P R I N G 2 0 11 MF
with
sees emerging technology or new
combinations of existing technology
provide the motivating force for
business innovation.
If the IT innovation agenda is going
to have any real chance of success,
there must be an acute awareness of
the trade-off between ‘push’ and ‘pull’
factors. While our data revealed that
over 80% of innovation is instigated
by demand-pull factors, this results in
more incremental innovation. A good
way to describe the limitations of such
pull is to think of the famous Henry
Ford quote: “If I had asked people
what they wanted, they would have
said faster horses.”
‘IT-push’ innovation tends to lead to far
more radical innovation. Yet, because
of the uncertainty in outcomes,
it is often more difficult to obtain
by Joe Peppard
Professor of Information Systems
IT
funding for technology-push projects
and therefore many IT executives simply
ignore or minimise such efforts and
focus on supporting and aligning with
demand-pull requirements.
Our research led us to develop a
framework that maps ‘IT push’ against
‘business-pull’, highlighting the specific
issues and challenges that must be
grappled with when considering
business innovation with IT (see
Figure 1). This has proved to be a
powerful framework in our work
with executive teams; giving IT a more
innovative mandate and helping them
to understand the trade-offs that they
unknowingly make. The framework
also highlights four specific ‘traps’
that executives can fall into that
have profound implications for any
organisation seeking to promote an IT
innovation agenda.
On the push side are technologies
that are either ‘known’ to the
organisation, or exist in the
market, but are as yet ‘unknown’
to it. On the pull side are
problems and opportunities
that are either ‘defined’ or exist
but have not yet been identified
and thus remain ‘undefined’.
Problems tend to be grounded
in the existing organisation and
its strategy. Opportunities mean
doing something different and new.
In the ‘known-defined’ quadrant
are problems and opportunities
but with known solutions. The
‘known-undefined’ quadrant
captures the situation where a new
technology is identified that may
have potential for the organisation.
This potential has yet to be
identified and defined and requires
investigation to seek out what
these might be.
The ‘defined-unknown’ quadrant is
where a problem is highlighted and
a search is conducted to identify
potential technology solutions.
Figure 1
Complacency Trap
Information Technology
Known
Solution to a known
business problem
Push
Unknown
Imitation Trap
The bottom-right ‘undefined-unknown’ it fails to gain any traction in the
quadrant represents the fact that there business. The ‘imitation trap’ arises
are problems and opportunities that when the organisation simply
have yet to be defined and that there copies what others have done in
are technologies the organisation is applying technology to a business
currently unaware of. problem or opportunity. Finally,
organisations fall into the ‘ignorance
This simple framework can be used trap’ when they fail to acknowledge
by organisations to consider and that there are problems and
assess their current approaches to opportunities still to be defined and
business innovation with IT. A key technologies to be identified.
question to be addressed is whether
you have initiatives in all quadrants.The An organisation needs to operate
framework also highlights a number in all four quadrants, recognising
of traps that organisations can fall into that not all their actions will
when looking to innovate with IT. lead to competitive advantage.
Ultimately, all innovations end up
The ‘complacency trap’ occurs in the ‘known-defined’ quadrant
when organisations believe they as it is difficult to keep any
are innovating when in fact they are innovation secret for very long.
applying a known technology to a Your competitors are continually
defined problem or opportunity. watching your strategic moves, just
The innovation might be new to as you are theirs. The challenge is
them but it is certainly not providing to ensure that your organisation
any competitive differentiation. The is operating in the other three
‘credibility trap’ occurs when a quadrants while simultaneously
technology with potential application avoiding the traps. MF
is identified and due to the poor
credibility of the IT department or lack For further information contact the
of appropriate business relationships, author at j.peppard@cranfield.ac.uk
Business Problem / Opportunity
Pull
Defined Undefined Credibility Trap
Opportunities search
Technology Missed opportunities
search
Ignorance Trap
MF S P R I N G 2 0 11 9
 by Dr Emma Parry
Principal Research Fellow
Organization Studies

and David Buchanan

Professor of Organizational Behaviour

Releasing
Time to
Manage T
he constant flow of government
policy initiatives, pressure to meet
targets and high profile concerns
about patient safety and ward cleanliness
have combined to make the National Health
Service (NHS) a complicated and stressful
environment in which to work.

Although they are responsible for the vital

job of managing the delivery of patient care,
and often get the blame when things go
wrong, surprisingly little is known about
the work and experiences of front line and
middle managers in the NHS.

10 S P R I N G 2 0 11 MF MF S P R I N G 2 0 11 11
 It is against this backdrop that a team
of researchers at Cranfield School of
Management have embarked on an
extensive project to investigate the
roles, contributions and realities of
front-line and middle NHS managers.
Funded by the Service Delivery and
Organization (SDO) programme,
the project is using a combination of
interviews, focus groups, and a survey of
managers in six NHS Trusts to explore
what front line and middle managers
contribute to patient outcomes, what
motivates them and the barriers they
experience when trying to perform
their jobs. This article looks at some of
the early findings from the project.
We know that middle and front line
managers in acute settings within the
NHS are highly motivated, particularly
when it comes to making a difference
for patients. We asked middle and
front line managers what motivates
them to do their job and found a lot of
commonality in their answers.
Figure 1:
Seven ways in which NHS managers contribute to clinical and organizational outcomes
1. Identifying, ‘selling’ and implementing
service improvement ideas and
opportunities.
2. T
 ranslating and implementing
ideas from colleagues and external
sources.
3. F acilitating change, taking risks,
working with clinicians, organizing
rapid improvement events.
12 S P R I N G 2 0 11 MF
Managers said they were motivated
by the desire to make a difference for
patients and to provide a high quality
service. However, they want to feel valued
and receive recognition and feedback
for the work they do. Some managers
enjoy developing others, supporting their
colleagues and working in a team, while
others emphasize self-development.
There was also evidence of ‘public
sector values’. Some of our participants
mentioned factors such as pay, job security
and terms and conditions; but these were
not the primary motivations for working
within the NHS. The managers that we
spoke to were enthusiastic about ‘the buzz
of innovation’ and ‘trying new things’.
The popular stereotype of NHS
managers is as costly administrators and
bureaucrats who block change. Yet our
research shows that middle and front line
managers in the NHS are fundamental to
implementing service improvements and
other organizational changes that make a
real difference to patients.
4. P
 rocess and pathway redesign
such as the productive ward and
lean methods.
5. D
 eveloping infrastructure such
as new IT systems and physical
facilities.
6. D
 eveloping skills in others and
‘getting people on board’.
Our research revealed that they contribute
to clinical and organizational outcomes in
seven main ways (see Figure 1).
Despite the myriad of ways that they
can contribute to organizational
outcomes, we know that NHS managers
are undervalued, overstretched and
often underutilized. This experience
seems to be true across the Service
and is shared by middle and front line
managers regardless of their place in the
organizational hierarchy – from ward
sisters to directorate managers.
Our research has identified seven
sets of barriers to middle and front
line managers performing their roles
effectively. The first is ‘money’ as the
pressure to cut costs and the increasingly
complex funding model often make it
difficult for managers to be effective.
Second is the ‘work itself’ as issues
related to finding the time and headspace
to manage effectively and the need for
broad shoulders and a thick skin.
7. L everaging targets to improve
performance, through the
use of techniques such as
dashboards and benchmarking.
Despite the myriad of ways
that they can contribute to
organizational outcomes, we
know that NHS managers are
undervalued, overstretched and
often underutilized.
Third, managers told us that the
demands relating to ‘compliance’ make
their jobs difficult as they constantly
have to service the regulators and
are under pressure to avoid breaches.
Fourth, managers reported that they
have a number of issues relating to the
‘systems and processes’, such as dated
IT, information gaps, and are constantly
fighting systems that don’t work. Fifth,
our interviewees spoke about difficulties
with ‘external relationships’ particularly
with primary care trusts. Sixth,
difficulties are caused by the constant
demands for ‘change’ coupled with the
slow rate of change. Finally, managers
experienced other issues around staff
shortages, recruitment problems and
learning from serious incidents.
This paints a picture of a problematic
environment with potentially more
barriers and blockages than facilitators
for middle and front line managers
trying to make a difference for patients
and to their organizations.
Managers told us that they felt like
“hamsters on a wheel”, that middle
and front line managers only ever get
“beaten up” and that “it doesn’t matter
what we do, it is never good enough”.
We can see then that the organizational
environment surrounding middle and
front line managers doesn’t necessarily
support their contributions and that
they often lack the resources, authority,
external support and, in particular, the
time to be able to drive and implement
new ideas.
Middle and front line managers are not
always allowed to ‘punch their weight’
in terms of contributing to service
improvement and clinical outcomes.
Some simple cost-neutral steps would
enable them to make a greater impact.
For instance, middle and frontline
managers should be empowered to
decide, within their budgets, how their
areas are run and be provided with
timely and understandable financial
information. At a divisional level,
the clinical director and directorate
manager make a powerful team if
they collaborate effectively. ‘Rapid
improvement events’ give staff time
to reflect, and to develop innovative
approaches. More ‘office days’ and
fewer meetings would also help.
Finally, at a personal level, middle and
front line managers should be visible,
walk the floor and talk to people
and not be driven by email. They
should be allowed to create space for
reflection and for exchanging ideas
with colleagues. MF
For further information contact the
authors at emma.parry@cranfield.ac.uk
or david.buchanan@cranfield.ac.uk
MF S P R I N G 2 0 11 13

Working through
ZOUD
the
Never has it been more necessary for management teams to be able to
work through the Zone of Uncomfortable Debate (ZOUD) – that unspoken
process that prevents us from questioning too closely the things that are
held dear in business.
M
ost senior managers find
their executive team difficult.
‘Dysfunctional’ is a favourite
word. Testing dynamics, political
agendas, big personalities, strong
opinions (and voices to match), too
much or too little control is the reality
for many. Not surprisingly, they find the
real work of the management team -
tackling the big strategic and business
performance issues - challenging at the
best of times.
But times have changed. The
unprecedented business challenges of
the recession have tested teams with
tough choices and urgent decisions.
Difficult decisions about what, where,
how, and how deep to cut for efficiency
whilst sustaining capability in a radically
changed financial environment.
14 S P R I N G 2 0 11 MF
Cranfield Business Leaders' Programme
These issues now give way to even more
demanding questions about positioning in
the dynamic landscape of new and changing
customer preferences, dwindling markets
and outdated practices; but at the same
time booming opportunities and the high
gain, high risk potential of growth strategies.
At no time in the recent past have business
teams needed to be more able to address
the basics, to challenge themselves to
identify their business core capability, yet
at the same time take swift and decisive
action. Never has it been more necessary
for management teams to be able to work
through the Zone of Uncomfortable
Debate (ZOUD) - that unspoken process
that prevents us from questioning too
closely the things that are held dear in
business. Such discussions all too easily
dissolve into hostility, power plays, ridicule,
escape mechanisms or delay tactics.
by Dr Catherine Bailey
Director
Seventy senior managers from fifteen
executive teams attending Cranfield’s
High Performance Business Team
programme shared their experiences of
the ZOUD. What prevents productive
discussion on ‘difficult’ issues and how
can managers handle vital but tricky
business decisions? Here are some of
their collective insights on what gets in
the way:
• Insufficient knowledge of others’
agendas and views
• Others inability to discuss difficult issues
• Fear of uncontrolled emotions
• Assuming you need the answer to ask
the question
• Prejudging the answer
• Fear of surprises
• Lacking confidence in a productive
outcome.
How to work through the ZOUD The ability to work effectively in the ‘Zone
of Uncomfortable Debate’ is a capability that
1. Prepare people, process and place
distinguishes effective management teams
Give people the opportunity to prepare; rotate from the rest. It may even be rare enough to
the Chair; legitimise and spread the responsibility make such teams very special. MF
for asking challenging questions by taking turns
to be ‘devil’s advocate’; ensure sufficient agenda For further information contact the author
time; choose a comfortable or different location at c.bailey@cranfield.ac.uk
for ZOUD discussions.
2. M
 ake ZOUD discussions an executive
team competence
Be clear why it is important for the team to
talk about ZOUD issues; recognise the natural
difficulties that everyone experiences; agree
‘rules of engagement’.
3. F ind the right starting point and pace
for ‘too difficult’ issues by taking a
stepwise approach
Is there agreement there is an issue to discuss?
What is the issue? What are the decisions to be
taken? What needs to be understood better to
make those decisions? What are the decision-
making options? What are the pros and cons
of each? What factors should guide choice and
what weight should they have?
4. Maintain a productive perspective
Keep a business (not personal) focus; and keep a
long term and bigger picture perspective.
Focus on issues (not personalities) and ensure
everyone gets heard.
5. A
 ct with emotional intelligence and
political awareness
Manage your own emotions; don’t leave others
to guess your worthy intentions. Strive to
understand what is driving others' views. Ask
questions to gain understanding (rather than
trade dogmatic statements); facilitate progress
(e.g. how can we move on? What would help
us to clarify this? What are we trying to work
towards here?)
6. Leave the ZOUD before leaving the room
Put the discussion and its value in perspective: why
it was important; the natural difficulty felt; what’s
been achieved by all and agree the next steps.
MF S P R I N G 2 0 11 15
 by Séan Rickard
Senior Lecturer
Business Economics

Managing
the Price of Food
Rising food prices are a direct consequence of the global food supply failing to
keep pace with demand. The world needs a new ‘green revolution’ with scientific
advances that can deliver higher yields and improved management practices to
run large-scale hi-tech farms effectively.

16 S P R I N G 2 0 11 MF MF S P R I N G 2 0 11 17

F
ood price inflation in the
UK is currently 5%, just two
years on from peaking at
12.8%. The UN’s Food and Agriculture
Organisation’s (FAO) benchmark
food price index (see Figure 1)
suggests 2007 was an indication of an
upward shift in global food prices and
the UN’s Millennium Development
Goal to halve the proportion of
hungry people in the world’s poorest
countries by 2015 has suffered the
embarrassment of numbers continuing
to rise. These are not random events
- they reflect a fundamental change
in global food markets. After a
generation in which the affordability of
food steadily improved, the trend has
now been reversed.
A recent report by Chatham House
(the Royal Institution of International
Affairs) on the future of food, opens
with the words: “What we had
thought of as abundant food supply
is anything but … the global system
as currently operated will reach
breaking point unless action is taken.”
Higher food prices are a direct
consequence of global food supply
failing to keep pace with demand.
In developed countries this puts
stress on disposable incomes with
adverse effects for other sectors of
the economy. In developing countries
it threatens the pace of development
and in the world’s poorest countries
it results in hunger and malnutrition.
The challenges faced by the world’s
food system are summarised in
Figure 2. Many food experts believe
that the global demand for food will
double over the next 40 years due
partly to the world’s population
rising to 9.2 billion; but primarily
because of rapid economic
development and its associated
reduction in poverty.
18 S P R I N G 2 0 11 MF
Figure 1: FAO Food Price Index Figure 3: The importance of management
220 The index weights the average
wholesale price of wheat, corn, rice, Technology
200
oilseeds, dairy products and meat. Captured via
investment in fixed
180
New capital, new production
systems and responsive
Scientific Biotechnology
160
Knowledge managerial control
140
Management
120
100
Added value through
Delivering a wide choice of low cost food and larger scale operations,
2000
2006
2008
2004
2002
1990
1996
1994
1998
1992
2010
non-food products via sustainable production higher productivity and
systems and supply chain collaborations superior standards
Source: UN’s Food and Agriculture Organisation (FAO)
Figure 2: Seven challenges to global food production
Issues Concerns Challenges
As per capita incomes rise above Figure 3 shows how the value High levels of support have the effect
Demand drivers $2 a day, diets include more meat and inherent in new scientific knowledge of overriding market forces, thereby
dairy products. The FAO expects can only be captured if managerial protecting inefficient enterprises and
1. S ubstantial rise in the Annual global per capita grain Many developing countries
demand for meat in developing countries ability keeps pace. critics soon find they are grappling
world’s population production has declined are struggling to meet their
population’s demand for food to more than double by 2050 and this with politics rather than economics.
will require a complementary increase in Never has an industry cried out Secondly, in the world’s poorer
2. N
 utrition transition as Global demand for meat and Continue upward pressure on the production of grain for animal feeds. more loudly for ‘creative destruction’; countries there are very few alternatives
per capita incomes rise dairy products rapidly rising world food and grain prices namely, the replacement of large for farmers who would need to leave
The situation outlined in Figure 2 numbers of small scale, badly managed the land to make way for larger scale
Supply challenges
is echoed in a 2009 study from the enterprises with fewer, larger scale farms. Anyone advancing the need for
3. The dependency of food Energy prices have risen and Rising production costs plus Royal Society which argued that only skilfully managed farms. That there structural change is at best likely to be
production on energy are expected to rise further increasing diversion of arable solutions “underpinned by science and are enormous economies of scale in viewed as heartless. Thirdly, agriculture
land from food to biofuels technology are feasible”. In essence, farming is beyond dispute and the wide lacks the glamour of transnational
the challenge is to greatly increase total range of yields, quality and unit costs in organisations and higher value,
4. S evere limits on the area The per capita area of Underlying productivity
factor productivity. That is, not only will all agricultural sectors testifies to the diversified products.
of agricultural land cultivated agricultural land has growth – particularly for grains
declined – is slowing farmers have to significantly increase the scope for improved efficiency. Large
output they get from each hectare of scale enterprises can afford and justify This neglect is a serious oversight.
5. G
 lobal supply of water Agriculture production heavily Agricultural trade to land; but they will also have to achieve higher levels of investment; they can Feeding the world is the greatest
failing to match demand dependent on fresh water compensate limited by failure this by using less water and energy per more easily spread risk; and deliver the priority and the growing demand
to reach WTO agreement unit of output. lowest unit production costs. for food will require much improved
6. S tress of climate Identified as a cause of crop Will contribute to the more management skills in agriculture. This
change on agricultural losses in recent years rapid spread of crop and The world needs a new ‘green With so much dependent on is where business schools have an
production animal disease revolution’ with scientific advances that management, it is pertinent to ask why important role to play. We have much
can deliver higher yielding plant and farming is a neglected area in business to offer in helping the world’s food
7. R
 ural populations Global harvests already Rising urban populations will
animal varieties while reducing demands schools? Three reasons come to system adapt to this new era. MF
are declining as a dependent on migrant labour become reliant on a reduced
proportion rural population for their food on the world’s resources. However mind. Firstly, in developed nations
reliance on technology and in particular agricultural policy is implicitly viewed For further information contact the author
Source: Author’s summary based on Chatham House report ‘Food Futures: Rethinking UK Strategy’ biotechnology will not be sufficient. as a social policy. at s.h.rickard@cranfield.ac.uk
MF S P R I N G 2 0 11 19
 Global
by Sunil Poshakwale The Brazilian banks have been directed
Professor of International Finance to hold higher reserves against their
foreign exchange positions and
the tax rate on income earned
by foreign investors from Real
denominated bonds has been

Power
doubled to 4%. Excessive liquidity
created by quantitative easing
pursued by developed economies
including the US and the UK has led
to spiralling commodity prices. Inflation
rates in emerging economies have
increased and a steep increase in food

Shift
prices is posing a serious threat to policy
challenges and economic gains.
The financial crisis has exposed the
hazards of excessive dependence on debt.
The credit crisis has provided significant
The global financial crisis has accelerated the insights into the short-sighted business
shift in economic power from the developed practices of the financial services industry
to the developing economies. in general and the banking sector in
particular. Banks which generously
offered credit to financial markets
and the corporate sector, have now
become highly risk averse. Furthermore,
consumption levels
in these countries will
rise, causing a decline in
savings. This is likely to
cause further reduction
in the availability of capital.
Finally, higher financing costs will
reduce stock market valuations
thereby adversely affecting stock market
performance.These developments will
create serious managerial challenges in

A
s we enter a new decade, there
are a number of uncertainties
about the current status and
long term prospects of the global economy.
The International Monetary Fund (IMF)
estimates that the rate of growth in Europe
has been sluggish and the outlook for the
world’s largest economy, the US, remains
uncertain. The current and future state of
the global economy is largely attributed to
the credit crisis that ensued following the
sub-prime mortgage debacle in the US.
The toxic credit crisis then spread across
the Atlantic and now threatens the future
of the Euro. Europe, Greece and Ireland
are being helped through financial packages
and there is concern that the market
pressure may also create a liquidity crisis
for Portugal and Spain. However, one must
question whether it is right to treat the
financial crisis which has affected the
major developed western economies as
a ‘global crisis’.
Although the financial markets in the
emerging economies of China and India did
react to the adverse developments in the
US and Europe, these reactions were short-
lived. Both economies continue to grow at
their long term growth projections.
It is estimated that whilst China’s GDP
will continue to grow by around 9%,
India will not be far behind with around
7.5% annual rate of growth for the
foreseeable future. In a recent study,
PricewaterhouseCoopers suggests that
the global financial crisis has accelerated
the shift in economic power from the
developed to the developing economies.
If they continue to grow, the economic
output of the emerging markets of China,
India, Brazil, Russia, Mexico, Indonesia and
Turkey, the so-called E7, would overtake
that of the established G7 nations: US,
Japan, Germany, UK, France, Italy and
Canada by 2032.
These developments have major
implications for developed economies like
the UK. It is estimated that the UK exports
around 7% of its total exports to developing
economies. As the economic power shifts
to the emerging economies, unless the UK
increases its share of exports to developing
countries it will miss the opportunity
to be part of the growth. On the other
hand there are serious challenges for the
government and policy makers in emerging
economies. The higher rates of growth
coupled with higher rates of interest in
emerging economies, are already attracting
hot capital flows. This is putting upward
pressure on their currencies. Over the last
two years or so, most of the currencies of
developing countries have increased in value
significantly against the US dollar. Brazil
provides a good case, where the Brazilian
Real has risen by nearly 40% against the
US dollar prompting the government to
actively intervene in the currency markets.
the emerging economies of India and
China require huge investments in
water systems, transport, infrastructure,
housing and power generation. These
economies do not have high levels of
capital accumulation and therefore to
finance the growth, capital from other
parts of the world must flow to emerging
economies.These developments bring
significant implications for businesses
in the developed economies. First
and foremost, availability of capital in
developed economies will be scarcer
as it will be directed to the growing
emerging economies. Consequently,
less supply of capital will lead to higher
costs and access to credit will be
increasingly challenging. Secondly, high
saving developing economies have been
an important source of capital for the
developed world for many decades.
However as these economies grow
and the standard of living improves,
the developed world. Businesses will
have to become smarter and more
innovative.The likely shortages in
availability of capital would mean that
managers will have to invest scarce
capital a lot more judiciously. Good
banking relationships will be a critical
success factor for gaining competitive
advantage as access to finance will
become increasingly difficult.
Technological innovations
which have provided
competitive advantage in
the past will be another
key factor to remaining
competitive in the wake of
increased competition
from the emerging
economies. MF
For further information
contact the author at
sunil.poshakwale@cranfield.ac.uk

20 S P R I N G 2 0 11 MF MF S P R I N G 2 0 11 21
 by Dr Liz Lee-Kelley
P
roject management has shifted
Senior Lecturer from its traditional base in
Programme and Project Management industries such as aerospace,
Project
engineering and construction to
become a core process across a variety
of sectors such as transport, IT and
pharmaceuticals. Companies that are
struggling to stay competitive, especially
Managers:
in these difficult times, are turning
to project management’s task-based
approach of ‘getting things done’
on-time and on budget. For many,
projects are now part of everyday
business life and most people will find
themselves managing a project or
being part of a project team at some
Lessons Learned?
point in their working life. The terms
‘project’ and ‘programme’ have become
associated with company initiatives
of varying complexities ranging from
moving office to marketing the launch of
a new generation of products.
In the public sector, policy
implementation and the acquisition
Companies that are struggling to stay competitive, especially
and management of equipment and
in these difficult times, are turning to project management’s services are managed as projects and
task-based approach of ‘getting things done’ on-time and programmes.Yet year after year, the
on budget. National Audit Office (NAO) and Public
Accounts Committee, report huge
overruns in time and cost, bringing into
question not only project governance
but the government’s ability to deliver
value for money. The media have
been quick to publicise the failure of
high profile projects such as the NHS
programme to digitise patient records.
Reported as one of the largest IT
programmes in the world at £6.2bn,
22 S P R I N G 2 0 11 MF
it was criticised for the lack of
stakeholder involvement and for being
severely delayed and overspent.
The failure of the Child Support
Agency’s (CSA) new IT system, ‘CS2’,
was another highly publicised fiasco. It
launched in 2006 despite having known
critical defects. Three years later, the
NAO found more than 1,000 reported
problems, 400 of which appeared
‘insoluble’. Vertex Data Science
Limited was recruited to try and
reduce the backlog of cases. The Work
and Pensions Committee estimated
the cost of managing the clerical cases
alone to be around £3.7m per month.
In both these cases, failure can be
attributed to a lack of transparency
and accountability, poor planning,
inadequate management information
and a breakdown in communication
with key contractors.
Projects and programmes are now
commonplace in both the private and
public sector. Large, more established
project-based organisations will
adopt methodologies that are aligned
with one of the professional bodies.
For government projects, specific
procedures or frameworks are
provided by the relevant government
agency or the Office of Government
Commerce. Many will also operate
their own centre of excellence
or academy to deliver project
management training and develop
their project staff.
The processes used in a project are
only one of a host of internal and
external stresses and demands that
project managers and their teams have
to cope with. Closer examination of
the problems that the NHS and the
CSA faced, reveals that project size and
context, structure, technical complexity,
stakeholder relational dynamics,
economics, politics and even the media
all have a role in the project outcome. It
seems 21st century project management
is about the capacity for reliable
performance in a messy, complex and
uncertain world.
An observation from our recent work
with professional institutions, business
and public sector sponsors is a growing
appreciation of the need to take a
holistic approach to projects. The ‘hard’
and ‘soft’ sides of project management
are essentially two-sides of a coin. There
has been a notable shift in mindset to
accept that project management as a
capability encompasses more than just
how to do projects. Effective managers
will have developed the cognitive
ability to fathom and provide for
the unintended consequences which
accompany every decision or action. The
new generation of managers, if properly
trained and supported, need to work
with people and processes. Project
management may finally be maturing as
a profession. MF
For further information contact the author
at liz.lee-kelley@cranfield.ac.uk
MF S P R I N G 2 0 11 23

Collaborate to
Innovate
Innovation is something that many governments strive to
support, in both the private and public sectors. By bridging
the two sectors and creating novel partnerships, public
sector expenditure can be reduced.
T
he financial crisis has
left many countries with
significant national debt and
consequently public sector budgets are
under pressure. This is having a major
impact on the ability of governments
to deliver public services and so
governments are facing the question:
how can the availability and quality of
public services be maintained at the
same time as saving costs? Innovation
can play a key role in addressing this
question and this article focuses on
a particular form of innovation - new
partnerships between the public sector
and commercial organisations, which
we term ‘commercialisation’.
This article discusses how such
partnerships can be stimulated, and
the barriers that must be overcome to
achieve commercialisation.
24 S P R I N G 2 0 11 MF
Professor of Innovation and New Product Development
Senior Research Fellow in Innovation
An important issue is the nature of
innovation in public sector organisations,
as this is often misunderstood. The
definition of innovation most frequently
used by the UK government is “the
successful exploitation of new ideas”,
but this is too generic to support
public sector organisations that want
to innovate. More clarity is needed.
There are of course different levels
of innovation, from incremental
(changes to existing services) to radical
(creating new services or completely
new ways of delivering services), and
transformational (innovation which
completely changes the way the system
works). Much of the innovation in the
UK public sector is incremental, for
example the improvement of service
delivery, or the reduction of costs
through outsourcing.
by Keith Goffin
Dr David Baxter
Dr Magnus Schoeman
Visiting Fellow
However, although incremental innovation
is important, it will be more radical
innovations that are needed to ease the
pressure on public sector budgets. Until
now, partnerships with the private sector
have mainly been based on financial
initiatives but commercialisation opens up
new opportunities.
Commercialisation is different in that
it looks to combine the capabilities of
public and private partners in a unique
way that enables the generation of new
services (which neither partner could
develop alone), and in a way that the
revenues are shared (allowing a financial
advantage for the public sector). In our
research we have looked in detail at
how such successful partnerships arose
and the new services that resulted
(see Figure 1).
Figure 1 - Met Office case study
In 2001 the Met Office started developing
a method to predict the level of demand
for healthcare, based on weather
conditions (for example, cold weather
makes certain respiratory conditions
much worse). A free-of-charge service
for hospital emergency departments was
launched that helped them predict the
changes in demand for their services.
However, when government funding ran
out and hospitals were asked to pay for the
service, the vast majority stopped using it.
A chance meeting at a 2006 conference
led to the Met Office starting discussions
with Medixine, a small Finnish tele-health
company. Working together, they created
an automated telephone system that
alerts at-risk patients of upcoming adverse
weather conditions, asks if they have
adequate medication, and advises them to
wrap up warm and stay indoors.
This service has proved a big success,
with around 40,000 patients now signed
up. Medixine market the service and
gain revenue for every patient they sign
up, which is shared with the Met Office.
In addition, the NHS benefits from a
significant reduction in costly hospital
admissions. The service demonstrates
that both public sector and
commercial partners can benefit
from commercialisation.
Commercialisation holds promise;
a number of projects, like the Met
Office example, have shown that
relationships with commercial partners
can lead to significant and shared
revenues. However, there are some
barriers to successful implementation.
To investigate these we conducted
a survey of UK civil servants. The
results showed that commercial
partnerships are perceived by civil
servants to be of growing importance.
However, the respondents to the
survey also perceived that potential
conflicts of interest, low awareness,
and a lack of experience of managing
such relationships were hindering the
public sector. In particular, it was felt
that there was not enough information
available to public sector managers on
how to make commercialisation work.
Innovation is something that many
governments strive to support, in
both the private and public sectors. By
bridging the two sectors and creating
novel partnerships, public sector
expenditure can be reduced. It also
offers a real alternative to selling off
public assets. It will remain to be seen
whether the government will make the
most of this opportunity. MF
For further information contact the
authors at k.goffin@cranfield.ac.uk or
d.baxter@cranfield.ac.uk
MF S P R I N G 2 0 11 25
 Alumni interview:
Howard Dickel (MSc PPM 2010)
by Stephen Hoare
Howard Dickel, BT’s Delivery Programme Director for London 2012, who
completed the Executive MSc in Programme and Project Management
at Cranfield talks about how BT will deliver the world's largest sporting
event around the globe.

An Olympic P
icture the scene. It is the 2012 Olympic Games, a British athlete
is leading the field in the men’s 100 metre sprint. It is a dramatic
moment. Suddenly your TV screen goes blank as broadcasts around
the world lose sound and pictures. By the time normal service is
restored the race is over and you and millions of others will have

Challenge
missed a historic moment when a world record has been smashed.

The scenario is BT’s Delivery Programme Director for London

2012, Howard Dickel’s worst nightmare. He stresses: “There is no
project more important to BT. In terms of the sheer visibility, political
importance and reputational damage to the brand if we get it wrong.”

26 S P R I N G 2 0 11 MF MF S P R I N G 2 0 11 27
 In charge of stakeholder
relationships for BT’s London 2012 I’ve never been involved in a project where there
delivery programme, Howard must
liaise closely with the London has been such a direct and emotional connection with the
Organising Committee of the
Olympic Games and Paralympic
people. Many of them tell me this is the most interesting
Games (LOCOG), its chairman project they’ve ever worked on. You just can’t put a price on
Lord Coe, all venues for the Games,
international sports bodies and that kind of commitment.
the world’s press and broadcast
media. BT is tasked with installing
and operating the broadband and
wireless communications needed
to bring the Games to an estimated
5 billion viewers and listeners
around the world.

Well before London was chosen

to host the 2012 Games, BT was a
partner in the bidding process. BT’s
technical capability was a crucial
factor underpinning London’s
bid and is a source of national
pride for BT and its staff. “It was
unthinkable we would have the
Games without BT being involved.”
As the Games’ official
communications services partner,
BT’s involvement has clearly defined
stages. Howard explains: “We
will move through the design to
delivery phase to the operational
phase and then a close-down phase.
As BT gears up for the opening of
the Games on 27 July 2012, 800 BT
staff who Howard refers to as “the
Squad” will be temporarily assigned
to manage communications services
for the 17 days of Olympic and 12
days of Paralympic sporting events.
This includes the appointment of
112 venue telecoms managers.
The high visibility role is expected
to propel people’s careers like
athletes from the starting blocks.
Combining internet protocol
telephony, with high speed fibre
optic packet switching and wireless
networks, BT’s communications
services are not necessarily
state-of-the-art, but use tried and
tried technology where reliability is
key. BT’s remit is to provide fixed and
mobile phone communications and
sound and pictures to and from the
main Olympic Park in London and 94
related venues across the UK.
Responsibility for ensuring
communications is aligned to clients’
needs rests on Howard’s shoulders.
He and his team consult fully with
client representatives and with
technology partners like Atos
Origin, Omega, Cisco, Panasonic
and Acer before the technical
specifications are drawn up and
commissioning begins.
From April 2011 until the start of the
Games in 2012, BT will be conducting
a series of dry runs to check systems.
The test events, some held in private,
some high profile, like the three
day gymnastics contest at which 15
countries will participate at the O2
Arena in January 2012, may expose
technical glitches which can then
be fixed ahead of time. “The 100
metre race takes just over nine
seconds. A three second outage right
in the middle of the race would be
unthinkable. Our operation is mission
critical in every respect,” says Howard.
Following an exhaustive risk
assessment, BT has installed resilient
high speed broadband cables to
serve the Olympic Park, each routed
independently around London. There
is also back-up services within the
venues themselves.
Appointed in 2008 specifically to play
a key role in the Olympic delivery
programme, Howard was sent by his
employers to study the behind-the-
scenes technology at the Beijing Games
and the Vancouver Winter Olympics.
BT has tried hard to draw on the
accumulated wisdom from companies
involved in previous Games. They
sponsored Howard through
Cranfield’s part-time executive
MSc in programme and project
management. He says: “There’s a
huge amount of pride within BT and
a determination to get things right. I
thoroughly enjoyed the three years I
spent at Cranfield and I did my thesis
on the transfer of knowledge from
one Olympic Games to the next.”
From his office on the 37th floor of
a Canary Wharf office block, Howard
points out of the window at an
adjacent high rise building: “That’s
Lord Coe’s office. LOCOG have
got three sets of offices all within
a few minutes walk. Face to face
meetings are the best way of getting
things done.”
Howard takes the pressures of the
job in his stride and says half jokingly:
“I have everyone from the CEO
downwards marking my homework
on a regular basis.” Performance
management involves quarterly
review meetings with BT’s chief
finance officer, regular meetings with
operational management as well as six
monthly audits.
So what management lessons can be
learned from Howard’s leadership
experience? In charge of a business
unit focusing on client delivery, he
manages a current team of 150
with a dozen direct reports. It is a
level of leadership akin to running a
medium sized company and it is the
entrepreneurial nature of the job that
Howard loves the most:
“There are few roles where you
have such a connection with the
customer. It keeps you focused on
the real world.”
Howard is at heart a programme
manager whose skill is in delivering
many intertwined projects all coming
together at once.
He does not profess to detailed
technical or technological expertise.
He makes his expectations
clear: “I’ve hand picked many of
my team especially the senior
management roles. I have
deliberately avoided a hierarchical
structure. If there is someone with
the relevant knowledge two tiers
below me, I let them lead in that
particular situation.”
Howard says he can appear driven
at times:“It’s not such a bad thing to
show a bit of passion.” He adds:“I’ve
never been involved in a project where
there has been such a direct and
emotional connection with the people.
Many of them tell me this is the most
interesting project they’ve ever worked
on. You just can’t put a price on that
kind of commitment.” MF

28 S P R I N G 2 0 11 MF MF S P R I N G 2 0 11 29
 For more than 40 years, Cranfield School of Management, a world leader in management education and
research, has been helping individuals and businesses learn and succeed by transforming knowledge into action.

The School brings together a range of management disciplines through a significant portfolio of activities that
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32 S P R I N G 2 0 11 MF