Germany's hidden competitive advantage lies in the education of its top managers
Munich, June 18, 2012
- The broad academic training of German top managers proves to be an advantage in times of financial crisis
- Most German managers have a university degree or doctorate and research experience
- The demands on future managers, however, are very different from the skills of today's top managers
- Education systems and recruiting strategies have to be more flexible to retain the competitive advantage here
German companies are admired around the world for their success in these times of globalization and economic and financial crisis. This is partly thanks to German managers and their excellent training. For top managers, it is a big advantage to be from Germany. For the study "Academics in management – Germany's hidden advantage", experts from Roland Berger Strategy Consultants and Innsbruck University examined the educational careers of 181 DAX managers, asked them about their experiences and compared them with companies' demands on future managers. The result: The skills of the top managers stand in strong contrast to the demands that companies place on their next generation of young managers. Most of the managers hold doctorates and have research experience, but only around 14% gathered practical experience during their studies. Yet this work experience is just what companies consider to be so important today. That's why the experts at Roland Berger advise rethinking recruiting strategies and making the education system more flexible, in order to keep Germany a preferred place to become a manager.
"German companies are very successful, and one reason for this success is their excellent managers," says Torsten Oltmanns, Partner at Roland Berger Strategy Consultants. "The managers of German companies have a broad academic background, but that is not being demanded of young aspiring executives today."
Hidden advantage lies in the education of German managers
84% of all German top managers are college graduates, around 20% of them from elite universities. "Almost half of today's managers even have a Ph.D. – while an MBA is comparatively rare at 11%," says Ivo Hajnal, a professor at the University of Innsbruck and co-author of the study. He also chairs the University's Academic Senate, where he is responsible for keeping the school's curricula up to date. Although most of the managers surveyed have an excellent education, a Ph.D. and several years in research on their résumés, they expect their successors to have different skills. "Today, almost 70% of top managers consider a Master's to be very important," says Oltmanns. Only 20% want a doctorate, and experience in research doesn't play any role at all in the companies' demand profile. "And this although the difficult economic situation at present requires a good mixture of academic background and practical experience," Oltmanns continues.
What managers expect of the next generation also diverges considerably from what they themselves have to offer in terms of internships during their university careers: "Only around 14% of today's top managers in Germany gathered practical experience during their studies. However, more than 80% of them consider such experience to be beneficial and they expect it from today's applicants," says co-author of the study Sarah Ertl from Innsbruck University.
The same applies to other qualities expected today, such as entrepreneurship (27%) and creativity (23%). Many companies are looking for unconventional thinkers with an entrepreneurial spirit, although the CVs of top managers paint a totally different picture. For example, only 4% of managers had ever put one of their business ideas into effect. Most of them went the traditional path of completing university quickly and starting work immediately after. Current and future realities also differ greatly in terms of overseas experience: More than one-third of those surveyed have never studied or worked abroad, although nearly all top managers (97%) consider this to be important in order to meet today´s management requirements.
Companies have to change their recruiting approaches
But if German companies want to continue benefiting from the strong educations of their top managers, they should rethink their recruiting strategies and requirements profiles, and not go from one extreme to the other. A Ph.D. used to be a must-have, whereas today it's the MBA.
Most of all, recruiters should base their considerations more on the successful models of the DAX managers. "With their strong emphasis on practical experience, MBA degrees certainly play an important role in the education of aspiring managers. But this shouldn't mean neglecting a well-rounded academic education," study co-author Oltmanns warns. "It's about the combination – in both academia and in consulting. Roland Berger Strategy Consultants has already taken this into account and increasingly sets up consulting teams that combine excellent students with more experienced employees," Oltmanns concludes.
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