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Welcome to the FT Business school newsletter, a weekly serving of management wisdom, reading recommendations and business-related challenges. FT subscribers can sign up here to receive the newsletter by email every Monday. If you have any feedback about FT Business school, please email firstname.lastname@example.org.
Andrew Hill's challenge
With the season for holiday complaints upon us, I have written this week about the way companies now respond to grumbling consumers — particularly on social media. It seems to me that the old paradox that a great recovery from a service failure actually enhances corporate reputations is fading, increasing the pressure on businesses to find new ways to make up for their mistakes.
For this week's challenge, tell me about a recent bad (or good) business response to a failure and what it might teach other companies about the wrong (or right) way to go about winning back disgruntled customers. I'll award extra points for the most novel examples, but knock off points if you go on too long. Send your concise tales of woe to email@example.com.
Last week, I asked you for better ways of keeping channels of communications between business and politics open. Alison Chappell suggested politicians should spend two weeks of their summer break doing internships on the shop floor. I also liked Mathias Keller's idea - inspired, he said, by David van Reybrouck's book, Against Elections — to select advisory group participants by lottery, to "ensure a broad and diverse input".
I was sad to learn this week of the recent death, at 97, of Sir Alcon Copisarow, a distinguished former naval officer, scientist, consultant, adviser to Margaret Thatcher, and chair of charities, including the Prince's Trust and the Eden Project. I met him in 2014 and for this week's further reading you can read about his extraordinary life in the Telegraph's obituary, or look back at my interview, where he offered this memorable advice to those starting out not to get stuck on one career path: “I wouldn’t now plan a journey over a century... Rather, what I would aim to do is to equip myself not with a single spear, but with a quiver full of arrows."
Bracken Bower Prize
Are you under 35 with an idea for a book that tackles emerging business themes? Submit a proposal for The Bracken Bower Prize by September 30. In the meantime, find out which titles have made it to the longlist for the FT/McKinsey Business Book of the Year 2017.
Every week a business school professor or academic recommends useful FT articles.
Francesco Daveri, professor of economics at SDA Bocconi in Italy, selects:
Italian banks: cheap for a reason Interest rates are rising, asset quality is improving and stock market valuations are still often below book values. Yet the time may not be ripe to buy Italy’s bank stocks yet. Currently, the country’s growth recovery remains slow. To avoid more losses, banks will only gradually sell their non-performing loans. The banking industry’s cost-to-income ratios are also high.
Altogether, Italian banks’ profits are likely to remain low, together with their stock values. The lesson is this — if the market price of an asset looks low, think it through. The time to buy may be in the future, but not today.
Entrepreneurial hubs spring up in small towns and cyber space Learning how to recreate the success of Silicon Valley is hard. Yet collecting data on business creation is useful. This is done by the Kaufmann Foundation which has an index ranking US areas for start-up activity. The lesson here is that small towns and cities could make ideal hubs for entrepreneurship.
Paying the high costs of setting up a business in a big city is no longer worthwhile if ideas and talent can be sourced locally and paid for globally via the internet. It sounds like there are entrepreneurship opportunities for the plentiful small and medium-sized towns in Europe.
Ask the academics
Got a question for leading business school experts? Send it to firstname.lastname@example.org and we will publish the best replies in future newsletters.
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Compiled by Wai Kwen Chan — email@example.com