Preparing for the GMAT business school admissions test has been more nerve-wracking than usual recently. GMAC, the not-for-profit body that owns the exam, announced in June that it had won a court order to shut down Scoretop, a website it had accused of improperly featuring questions still being used in the computerised exam.

GMAC says it might cancel the scores of those who broke its rules by using Scoretop to share or confirm the content of “live” questions, leading to speculation that some students might be thrown out of business school or have the offer of a place on an MBA course rescinded.

In the light of this drama, I decided to have a chat with Dave Wilson, chief executive of GMAC, about the dos and don’ts of getting ready for the GMAT, which aims to test verbal and mathematical ability through multiple choice questions and essays (it is also a “computer-adaptive” test, which means it gets harder the better you do).

In the first section of the interview we talk about issues such as: the ideal length of preparation (100-120 hours spread over 7-10 weeks); new security features designed to prevent cheating; and the difficulties faced by non-native speakers of English. In the second part, we discuss the ongoing Scoretop crackdown.

Both sections can be found at the FT Podcast Player.

My uncle’s Austin Maxi was a tough old beast. It was the sort of car that never gave up. It carried my cousins and their parents all the way from Scotland to Spain and back again on ambitious summer holidays, but could also display a useful turn of speed, outgunning my dad’s Renault 12 with some ease.

It is strange, our nostalgia for these vanished car marques. After all, it is not as though some of these older models were really any good, at least, not compared with today’s far more comfortable and reliable cars that are so much easier to drive.

Luckily for me – and for my fellow road users – I have never had to double declutch in my life. But I do remember those cold mornings when the jump-leads had to be applied and the choke was pulled out all the way, or those long summer drives when bare legs got scorched by boiling hot vinyl seats. The good old days left considerable room for improvement.

Petrol heads of a certain vintage will have been able to indulge all their nostalgic feelings in the past few days after reading the long and largely affectionate obituaries of Lord (Donald) Stokes, the former chairman of the British Leyland Motor Corporation, who died last week.

Continue reading “Why I’m still backing Britain”. Please post comments below.

You always know you will be in for an interesting time when you talk to the great management guru CK Prahalad, but I must admit I hadn’t expected to hear the name Euclid cropping up in our conversation.

This was not a case of gratuitous name-dropping. CK, who is professor of strategy at the University of Michigan’s Ross school of business, was trying to explain to me how all his major publications of the past 20 years have really followed the great mathematician’s example: establish a clear premise that is robust, and then follow the logic of your own argument.

This is what he had done (together with Gary Hamel) with Competing for the Future, with The Future of Competition and The Fortune at the Bottom of the Pyramid.

And this is what has done with his latest book, The New Age of Innovation.

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The shareholder is king, says Anglo-American management dogma, so run your company for his benefit. I’ve often struggled with that one. Kings? Those people scrambling for the egg sandwiches at the end of the annual meeting? That automaton running the index-tracker fund?

Freek Vermeulen of London Business School also has trouble with this truism. The Dutchman argues persuasively on his blog that employees should perhaps be a greater priority than investors - and throws in a boozy anecdote about the late Sumantra Ghoshal to boot.

John Thornhill sagely extends a similar line of thinking in a column about the people-centred - as opposed to profit-centred - model of capitalism often found in continental Europe.  

Elsewhere:

1. The Chippendales brand gets a fresh coating of oil rubbed into its pecs.
2. Why cash-hoarding European family companies suddenly don’t look so stupid.
3. Which country’s bosses get as many as 18 weeks of annual holiday? (Clue: not France.)
4. How to start a mentoring program.
5. What publicly-traded companies are up against when trying to retain executives tempted by private equity.

Anyone who oversees accountants would do well to read details of a freshly-settled fraud complaint in the US.

The SEC had accused Scott Hirth - a former divisional CFO at ProQuest, a producer of electronic databases of archived information - of fraudulently boosting recorded revenues and under-reporting costs.

Without admitting or denying the allegations, Mr Hirth has agreed to pay a fine and be barred as a company director. ProQuest, which is now known as Voyager Learning Company, has also consented to settle SEC claims of lax controls without admitting or denying the claims, but it does not have to pay a fine.

Two things in the 24-page complaint filed by the SEC struck me as particularly fascinating. The regulator alleged that Mr Hirth had covered up his spreadsheet manipulation by using hidden rows and entries in white text on a white background.

That’s right: we’re talking about the accountancy equivalent of invisible ink.

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Don’t miss Anna Fifield’s superb reportage from South Korea - with accompanying slideshow - in which she looks at the employee training courses that use graphic simulations to demonstrate the finality of death.

The likes of Samsung Electronics and Hyundai Motor send workers to Korea Life Consulting to show them the value of life and encourage them to question their priorities. The course includes mock burials - yes, attendees are actually shut into coffins temporarily - and will-readings. One aim is to discourage suicides, particularly prevalent in South Korea.

The piece left me wondering how many of the employees sent on these courses re-evaluate their priorities to the extent that they then quit their jobs. I guess it depends on the traditional internal battle between reinvention and inertia that occurs following most training courses.

Usually, the call to action articulated in a good training session - must lead team better, must lead more meaningful life - fades within a couple of days as the old ways of doing things reasserts itself.

That said, an inspirational PowerPoint slide is likely to be easier to forget than the sound of dirt being thrown on the lid of your coffin - with you inside.

Today I am going to tell you about …

This, the experts tell me, is the worst possible way to begin a presentation. It seems counterintuitive, I know, but apparently when we get up to speak we shouldn’t be trying to tell anyone anything. Oh no. Rookie mistake. The goal here should be shared understanding: a conversation not a speech, a message (or messages) conveyed, received and taken away.

Simple, isn’t it? But not for the thousands of executives who step up to the lectern of fear every day to launch the next dire, life-sapping, career-jeopardising presentation.

Why are so many of us so bad at doing these presentations? According to James Caplin, author of the newly published primer I Hate Presentations – I think we get his message – too many presenters are stuck in the school-essay mindset of imparting information. This involves telling a long story about the past (“how we got here”), the present (“where we are now”) and the future (“where we are going”). The whole thing is dull and lifeless. It patronises and bores the audience.

 Continue reading ‘Column: Why presentation skills are permanently on the slide‘

RiskMetrics, the owner of corporate governance adviser ISS, has just delivered its assessment of the latest round of annual shareholder meetings in the US, also known as the proxy season. Its verdict?

Simply put, the bear market mauled the 2008 proxy season… The collapse of Bear Stearns on the eve of the season let most of the air out of the shareholder activism balloon.

Deteriorating economic conditions meant shareholders were more likely to back management and refrain from ousting directors, while activist pension funds and unions sensed which way the wind was blowing and decided to rein in their demands. RiskMetrics also said companies were getting better at talking to investors on contentious issues.

Yet it added that one type of investor has been pursuing its own agenda in muscular fashion during the market turmoil. It pointed out that many boards - including those of The New York Times Co and Tiffany - have in recent months agreed to yield one or more seats to hedge funds unperturbed by the choppy waters.

My colleague Jonathan Moules has found a rare example of a small supplier managing to stand its ground against a much-bigger customer that decided unilaterally to change payment terms (in the big company’s favour, of course).

MTa International is a family-run training business. It rebelled when Alliance Boots, a pharmacy chain owned by private equity, said it would pay suppliers 75 days after receiving an invoice, having previously paid after 30 days. Last week, MTa managed to exempt itself from this diktat after threatening to withdraw its services.

Justifying the general hardening of its payment terms, Alliance Boots said it was “committed to working with suppliers for mutual long-term benefit”.

In the same spirit of partnership, I have decided to take two-and-a-half times longer to pay at my local Boots store. Please be patient if you are stuck in the queue behind me as I pat every pocket laboriously in a pantomime search for my wallet, or attempt to fill out a loyalty card application form at the till using only a No 7 eyeliner pencil.

In the meantime, here are some tips on how to manage exposure to slow payers in today’s horrible credit climate.

“A mass of publications that are read by few and have little influence… an exaggerated focus on methodology and intellectual appearance.”

These are just some of the criticisms Anthony Hopwood levels at the academic research coming out of business schools in a column in today’s FT. Prof Hopwood is a former dean of Oxford’s Saïd Business School. He says business academics are too concerned with publishing arcane articles for their peers instead of writing for working managers.

In the column he also takes a pop at the highly-regarded London Business School, as well as criticising the FT. Prof Hopwood claims our business school rankings - which reward institutions for research output, among many other things - contribute to the obsession with getting “hits” in esoteric journals rather than creating ideas of value.

Is Prof Hopwood right to criticise business academics? Readers might also want to take a look at the column written last week by Charles Baden-Fuller of London’s Cass Business School; it claims that US supremacy in business school research will end.