According to Ernst & Young, by 2025, 75% of the global workforce will comprise of millennials, that is individuals born after 1982. A lot have been said and written about the differences between millennials and the two other generations dominant in the workforce: baby boomers and generation X. Popular press regularly publishes articles on the clash of values between the generations, leading to emergence of generational faultlines within organization. Indeed, academic research has shown that millennials are different from previous generations in terms of their work values (e.g., Smola & Sutton, 2002).

At EGADE Business School (in cooperation with the Gustavson Business School in Canada) we contribute to this stream of research and examine work orientations of millennials in various cultural settings. These are  some of our most relevant findings.

Who are millennials?

First, we must explain who millennials are and how they are characterized as a group. The term “millennials” usually refers to a generation of individuals born after 1982 (Zemke et al., 2000). This cohort has been also called Generation Y or Generation Nextbut it seems that the term millennial is most commonly accepted. More broadly, a generation is a group of people born and living at about the same time,„who experience the same significant events within a given period of time” (Pilcher, 1994). What are the events for millennials? It is a political and economic liberalization of the 1990s, widespread technological advancement of the early 21stCentury, and the Great Recession, which hit global markets around the time when millennials where starting their careers. It should be stressed that within a generation individual can differ significantly, but they share significant common characteristics.

The ubiquitous social pressure

Early on in their careers, millennials make decisions influenced by parents, siblings, or closest friends, who inspire and help them choose a field, and offer emotional (and in many cases financial) support. Even when having doubts about the selected career path, social expectations and validation from one’s peers and family push millennials to continue. While social pressure is not a new effect, the digital revolution of the 21stCentury magnified its impact on the new generation. 

Millennials experience substantial pressure to conform due to constant peer comparison through ubiquitous social media. The latter has been found to be a powerful stimulant of adolescent and young adult brains (e.g., Giedd, 2012) and to change the nature of social interaction and derived behaviours (e.g., Somerville, 2013). Interestingly, we found the effect of social media to be stronger in the developing economy context of China. The peer comparison continues with their careers development. The constant flow of success stories through social media puts additional pressure on the millennial to search for meaning and/or recognition in their current career. If the search for meaning is unsuccessful, the millennial starts looking for alternative career choices.

Millennials at work

In the first phase of our research, we interviewed millennials from Canada, China, and Poland to describe their work orientations and what factors influence their decisions on the job market. Surprisingly, the new generation is not driven by money or other material incentives. Contrary to popular belief, additional perks such as cool office amenities or more flexible office hours also seems to have no influence on millennials’ career decisions. If it is not about the money nor the extra benefits, what is it all about? 

It turns out, the generation so embedded in the virtual worlds mostly seeks positive personal relationships at work. The most sought after feature is a positive organizational culture. Millennials also want to see their work to be impactful and meaningful, so that they can see how their work contributes to the organizational performance. The millennials we interviewed also stressed the need for extensive coaching and mentoring. 

It seems the generational faultline within organizations is smaller than some thought as millennials value the experience of older colleagues and want them to share it. Interestingly, millennials also look for opportunities to share their experience, which should come as no surprise as it is a generations raised in the era of omnipresent feedback. In sum, millennials want to know why they do what they do and how can they get better at it.

Attracting and retaining talent in the new era

While all these findings are interesting for researchers, one question remains unanswered: how to attract (the easy part) and retain (the tricky one!) millennials at your organization? As always, there is good and bad news. The good news is that it does not require substantial financial investment. Unfortunately, it requires a change in mindset which for many organizations is more difficult than spending millions of dollars. 

First, companies must understand that in a global world, the competition for talent is also global. Many companies realize it and has taken advantage of the global talent pool. However, the consequence they rarely foresee is the global migration of the local talent. In other words, not only you can access distant talent, but distant companies can access yourtalent pool, too. Second, be proactive and realistic in your search for talent, that is look for high potential candidates before they decide to search for a job. 

Finally, there comes the question of how to keep millennialsin your organization. During the interviews, three main themes emerged: the job, the career, and the people. Millennials are less likely to quit their current organization if they can see the direct impact of their work, preferably meaningful for the society at large. The jobshould also be challenging and dynamic, thus satisfying their need for constant learning. The career plan must be clear and structured, so that they know how they will grow in the organization. Finally, the people– as already mentioned, millennials seek coaching and mentoring, therefore the older generations must be ready and willing to offer help. If these simple, yet challenging conditions are met, both millennials and your organization will thrive.

A few weeks ago, it was made known that between 2017 and 2018, Mexico dropped three places in the IMD World Competitive ranking, to 51st out of 63 countries. However, the news failed to emphasize that, according to this indicator, our country has actually lost 19 places in competitiveness over the past 5 years, from 32nd in  2013.

Competitiveness is a broad concept that, according to Arturo Bris  –director of the IMD World Competitiveness Center–, expresses “the way in which countries, regions and companies manage their competencies in order to accomplish long-term growth, generate jobs and increase wellbeing.” According to the World Economic Forum, “A competitive economy is a productive economy, and productivity leads to growth, which, in turn, takes us to (higher) income levels and improved wellbeing.”

The IMD index contemplates more than 250 indicators correlated with competitiveness, since they operate in one of the three following ways: as factors that create the conditions for competitiveness, as competitiveness level indicators, or as variables that receive the direct effects of the level of competitiveness accomplished. Of the four major factors, the ones that have lost the most places are ranked as follows:

• Greatest loss in government efficiency (54^th place): Worsened institutional and social schemes, which are determined by the degree of effectiveness of government actions. In particular, some of the most deteriorated components in this category are: growth of the informal economy, high levels of corruption and bribery, lack of transparency, risks to personal safety and property rights, limitations to the justice system, high homicide rate, elevated income and opportunity inequalities, tax evasion and difficulties in the creation of new companies.
• Decline in economic performance (35^th place): Low dynamism in public and private investment, total and per capita domestic production, and formal employment; rise in inflation and cost of food; depreciation of the peso; and limitations in international trade, such as its high concentration in the United States and limited service exports. These latter two aspects assume a particular risk in face of the NAFTA renewal difficulties.  
• Erratic behavior of  business efficiency (48^th place): Erratic, but with a downward trend. Interestingly, a decline in all the subcomponents of this factor can be observed, such as: productivity, efficiency, management competencies, financial position, and attitudes and values.
• Lowest loss in the factor infrastructure (55^th place): Six places lost since 2013. This shows us that our infrastructure has traditionally been limited and has not increased at the same rate as in the rest of the world. Aspects such as basic infrastructure, health and environment, and education displayed the greatest losses.

Mexico's position in the IMD World Competitiveness Ranking, 2018.

There are, of course, strengths and positive behaviors in diverse components associated with Mexico’s productivity and competitiveness, which can serve as a foothold for developing a national crusade to recover the country’s competitiveness and productivity.

However, it is important that the new federal government, which will come into power at the end of this year, should develop and address a comprehensive agenda that will tackle the institutional, social, economic and political obstacles that have affected the competitiveness, productivity, growth and wellbeing of Mexico and its inhabitants. This is a challenge that urgently needs to be addressed with intelligence, courage and political will.

Proof

The last televised presidential debates included a box with an interpreter inset at the lower right-hand corner of the screen. However, this box was too small for the members of the deaf community who watched the debate from their homes. It is possible to add subtitles, or closed captions (cc), but most deaf people cannot read. Moreover, there are websites that offer a larger picture with MSL interpreters, but not all deaf people have Internet access.

Gerardo Monsivais, the deaf co-founder of Dilo en Señas (Say it in Sign Language), acknowledges that he is concerned about this issue because it formed part of the voting process. "In the first debate, the interpreter couldn’t be seen; the interpreter was good, but the picture was small. I was hoping that there would be a bigger inset in the second debate, since Margarita Zavala had resigned her candidature and her space could have been used to make the inset bigger."

Oscar Tadeo Tavitas, a deaf professional with a Bachelor’s in Industrial Design from Tecnológico de Monterrey, agrees that the interpreters in the presidential debate are good in general terms, and comments that "sometimes we criticize them because the television format is bad, with a very small, difficult-to-see inserted picture.” He also says that the lack of sign language interpreters in government institutions “is a lack of respect for our culture and a violation of our human rights."

Daniel Maya, president of the Mexican National Association of Sign Language Interpreters and Translators (AIT), admits that "in the first debate, there were interpreters who were certified and accredited by the national associations of interpreters. They also took courses at the Federal Electoral Tribunal to understand the issues involved in the electoral process and were trained to be able to interpret the debate. Not all interpreters have the knowledge in electoral matters to be able to interpret the debates."

The president of AIT states that the interpreters in the first debate were people who could hear, but with the skills and abilities to interpret. Something that few people know is that in the second debate there were deaf interpreters, who also have interpreting skills and were prepared by the AIT to be interpreters. However, Maya explains that not all deaf people can be interpreters, since special knowledge and skills are needed, as well as a great deal of training.

From bilingual speaker to deaf interpreter

There are few associations in Mexico with experience in training interpreters. However, the Mexican National Association of Sign Language Interpreters and Translators is collaborating with the Mexican National Union of the Deaf to prepare a teaching program for interpreters, as well as an evaluation that CONADIS (Mexican National Council for the Inclusion and Development of People with Disabilities) wants to present for interpreter training and evaluation. Daniel says: "Nothing new needs to be invented. There are already international standards on the evaluation of interpreters in oral languages and these can also be applied to sign language interpreters."

Being an interpreter is a profession, not an occupation. Not every person who can sign can automatically be an interpreter. Professional training is required. "Being a bilingual speaker does not convert anyone into an interpreter; professional training is required for anyone to be called an interpreter," says Daniel.

Olinda Perla Treviño González, founder and former President of the Association of Deaf People of Nuevo León, Member of the Advisory Council of Persons with Disabilities of Monterrey, and current Vice President of the UNSM (Unión Nacional de Sordos de México, A.C. (National Union of the Deaf of Mexico)), was the first deaf director in Mexico. Perla considers it "extremely important that there be interpretations in the mass media."

Regarding the interpretation of the presidential debates, Perla believes that: "It is really good that competent people were selected. For the first time in history, we have seen the figure of the deaf interpreter. Mexican Sign Language Interpreters (IMSL) were trained for this activity. I feel proud because it empowers deaf people and places us as professionals in public events, with the public eye focused on our abilities and recognizing us as subjects with rights."

There are some associations that are dedicated to training IMSLs. There are also "competent self-taught people who have carried out studies on interpretation, who share work experiences, attend congresses, symposia, seminars and permanent courses, and remain in permanent contact with the deaf community," affirms Treviño. She assures us that "the recognition of IMSLs is the result of their local deaf communities accepting their work."

Inclusion in companies

Regarding companies, Daniel Maya proposes that "at least a part of the Human Resources Department should learn the basics of sign language and there should be videotaped instructions, regulations, manuals and contracts in sign language."

Oscar believes it is important "first, to sensitize the human resources staff and then the personnel in general about the treatment of the deaf community and, if possible, have at least one person who can communicate in MSL."

To be more inclusive, Perla believes that companies should change their paradigm with regard to the deaf, and "stop seeing deaf people as people with a deficiency, rather looking at them as people who are different from the listener, with a culture and language of their own. This makes room for a more inclusive language and the creation of working contexts with accessibility."

Treviño believes that companies should have training to create bilingual contexts where Sign Language is included and an IMSL is incorporated.

In financial institutions, for example, "employees should be trained on how to deal with deaf people, since sometimes the procedures to apply for a loan or cancel a bank account are carried out by phone, making it difficult for a deaf person to complete the process personally. It is usually unacceptable for a person who can hear to conduct such processes on behalf of the deaf person, since the voice of the process owner must be recorded to initiate and conclude instructions. Some of my friends have had to go to the Bank Manager as witnesses to the process to open an account or cancel the service," concludes Perla.

We constantly take our access to information for granted. In fact, we very often unintentionally absorb information, by listening to something on the street, on the radio, on the way to work, or reading on social networks by chance. However, in reality, millions of Mexicans cannot communicate orally. Moreover, the overwhelming majority cannot read or write, because our school system is not sufficiently inclusive and, unfortunately, our society is not yet inclusive either.

However, we know that partnering with groups that tend to be excluded is key. We must do nothing for them without them. In addition, in general terms, we are seeing that younger generations have a vision of social justice and wider inclusion than we had ever seen before. Also, although there is still a long way to go, there are many people striving to achieve a more inclusive country. There are things we can do from our own standpoint: talk to our company/organization to see what they are doing to be more inclusive; take a Mexican Sign Language Class; sign petitions; support inclusion projects; discuss the topic of inclusion at the dinner table; and many more. It is up to us to implement this change.

Thousands of companies, all over the world, are in need of increasing the information offered to their stakeholders due to new legislation related to sustainability, such as for example, the European Directive on the Disclosure of Non-Financial and Diversity Information, which is now obligatory for the 2017 fiscal year.     

Nevertheless, in Latin America, according to a global study by KPMG, 81% of the 100 largest companies are already reporting social and environmental impacts in its sustainability reports, an increase from 74% in 2015. This advance, which has primarily been led by stock market investors in many countries, looks for businesses to communicate transparency in their operations. However, how can we tackle the sustainability puzzle in our own business? How can we measure it, and essentially, communicate it to our stakeholders?

Nowadays, sustainability is understood as the capacity of a company to create value for its stakeholders, proactively managing risks and strategic opportunities in environmental, social and economic dimensions. This definition transcends from the more traditional concept of Corporate Social Responsibility and includes a wider spectrum of environmental issues (such as water, energy, and emissions), economic issues (such as innovation, corporate governance, and antitrust policy), and social issues (such as occupational health and safety, personal development, and Human Rights), all depending on the specific type of business.    

Many companies have spent years developing initiatives for these issues, but how can we ensure that these actions are really contributing to a sustainable business? The answer, as with any management system, is the establishment and measurement of objectives.

Why do we need reporting standards?

Although the business sector has not typically been a pioneer in sustainability, in recent years more companies have joined the efforts of the United Nations and other players, such as governments, NGOs, and Civil Societies, to develop the Millennium Development Goals (2000) and Sustainable Development Goals (2015). These initiatives establish clear goals to achieve sustainable development. The UN also created the UN Global Compact (2000) for companies to commit to working toward responsible and sustainable businesses.  

When companies comply with initiatives such as the Global Compact, one of the main requirements is the reporting of its operations. This stems from the need for companies to be more transparent with their stakeholders, to be open about the disclosure of clear information, regulations, plans, processes, and operations. Furthermore,  their top management must act visibly, predictably and understandably to promote participation and accountability, and allow third parties to easily perceive what actions are being performed.

While there are numerous measurement standards and guides to report sustainability information, one of the most used and updated is the Global Reporting Initiative (GRI). The GRI proposes a common framework which helps companies to generate their sustainability reports with an integrated view of their impacts. Under these standards, companies can communicate their performance, as well as propose and follow up on the objectives they have set. Finally, they are used to guarantee the comparability, quality and pertinence of the information.   

Recommendations for a good report

If you, or your company are about to start or are in the process or generating a report, the following recommendations will help you on your path to sustainability:

1. The report is a consequence of strategy: It may sound obvious, but reality usually shows that a company’s sudden interest in sustainability starts with the report. First we need to take a step back and analyze the company’s current strategy, then take a look at it from the point of view of sustainability, which means mapping out the risks and opportunities of the business model all along the value chain, in its social, economic and environmental dimensions.
2. Include top management: The process of the report, and in general of the sustainability strategy, works better when there is visible conviction from the head of the organization. This does not mean that the CEO needs to be involved in every step of the process, but they and their executive team should be one of the last filters of the information disclosed to the stakeholders, as it will also become public information.  
3. Prioritize what you are going to disclose: A Materiality Analysis process is key to select the content that is most aligned with the stakeholders’ expectations, the sector trends and the company strategy. This process is normally carried out by a third party to avoid any bias.
4. Limit yourself to what is relevant for your company: There are many standards, indicators and indexes used to measure corporate sustainability, but here also less is more. Ask yourself: What standards are the most critical for my company? Do they generate value? Which ones can I manage, or am I able to use? Start off little by little, but well done, making sure about the contributions to improving the company’s performance.
5. Reporting is a process of continual improvement: At first some companies tend to feel overwhelmed by the amount of information demanded from them, but just like any process, it is based on learning and constant improvement. If the company does not have all the relevant information, that just means that it needs to adjust its information collection process.
6. Sustainability Culture: It is about adopting sustainability habits, attitudes and behaviors in the day-to-day management of the organization. Once people understand the concept, its benefits and the contribution it makes to company performance, the reporting process will become much easier. Invest in training and communicate the sustainability strategy in simple terms to the rest of your company.  
7. A Positive/Negative Balance: Reporting is an exercise focused specifically on transparency and accountability in front of stakeholders. Thus, you must present the positive and negative aspects of the value chain in a clear and balanced manner. Avoid just showing the good parts, as this defeats the main objective of the process. Stakeholders do not generally focus on what the company did or is doing wrong, they want to know how it was resolved or will be handled going forward.
8. Match individual performance to corporate performance: Many companies are now relating their sustainability objectives with their variable employee compensation systems. This undoubtedly facilitates the management and reporting of sustainability. Working closely with Human Resources is key for this type of implementation.       
9. Sustainable Development Goals: Once the main material impacts and issues have been identified within a company, indicators and goals will be integrated in relation to the SDG. This fundamentally contributes to the overall strengthening of the company’s relationships with its stakeholders and its contribution to the sustainable development of the region in which it operates.
10. Focus on the value chain as a whole:  Although sustainability reporting is a process of continuous improvement, the entire value chain of the business model must be taken into consideration. This basically means that it is not enough to just manage issues within the company. You need to go further and manage the risks associated to customers, suppliers, contractors, communities, and any other stakeholders that may be affected by the activities of the business.

Corporate sustainability is a response to a new economic world. Sustainability Reporting is advancing rapidly and is becoming a vital tool in management and transparency with stakeholders, and particularly with investors. Initiatives such as the Dow Jones Sustainability Indexes (DJSI), Task Force on Climate-related Financial Disclosures (TCFD), CDP and Sustainability Accounting Standards Board (SASB) are clear examples of how investors are becoming increasingly interested in sustainability issues and how these issues are being translated into financial language. Therefore, companies are now being challenged to take a step backward, to analyze their Business Model, their risks and opportunities in relation to social, environmental and economic issues, as well as to communicate their management of these issues in a proactive and transparent manner. 

he world’s most prominent business schools are now including experience-based learning as part of their curricula. Until now, many of them, particularly those offering full-time programs, were missing out on the chance to incorporate the practical and experiential dimensions of business, which can complement the concepts that students learn, for a more immediate implementation.   

However, the global business education sector is currently deploying innovative initiatives to bring the practical side of the world of business closer to the educational side. This includes virtual reality; technological campuses where businesses and consultancy projects can be set up in real life environments; and the international, multicultural and diverse team management program promoted by the GNAM network.  

It has been proven that the more experience-based the education, the quicker the development of students’ critical skills. Moreover, the  value proposal of business schools is being redefined in an era where basic content can be found online, for next-to-nothing or for free. Nevertheless, the development of competencies, such as decision making, dealing with complexity or leading diverse teams, is closely related to an irreplaceable experience-based education.

Empirical learning to manage investments

This article presents the case of one of the specific experience-based learning plans offered by EGADE Business School in the area of finance. The rapid evolution of technology and the development of the securities market have contributed to facilitating access to investments with less money, using different tools currently offered in the market.

These conditions have meant that academia, through courses such as Investment Management, offered by EGADE Business School to Master of Finance students, has been enhanced by the use of diverse experiential components that support long-term learning. Furthermore, by the end of the course, students will have benefited from the added value of having generated a real personalized investment and designed the theoretical concepts needed to manage investments in a more professional manner.  

At EGADE Business School, we have the best-equippedBusiness Intelligence Laboratory in Latin America, with the most advanced databases and software, creating an enriching active-learning setting for students. Technological tools and resources are combined to create a focused learning environment, from which I, as a professor, extract the benefits, on the basis of their contribution to my own experiential learning. These tools include: Bloomberg Portfolio Optimizer and Risk Analytics, Real Investment Platforms, Financial Market Simulators and Expert Guest Speakers, all of which support student learning. 

Bloomberg Optimizer

Bloomberg is one of the most renowned economic, financial and business information providers in the world. Its platform works via a monthly paid subscription and, in return, a double screen terminal is supplied. It offers an enormous amount of content, and one of its most beneficial solutions lies in investment portfolio management through the PORT tool (Portfolio and Risk Analytics), which provides an in-depth vision of portfolios and their structures, analyzes positions and their active stakes, and explains historical records and future risks. PORT optimizer monitors intraday and historical performance as well as fundamental characteristics, scenario analysis and portfolio optimization.

The other tool used is PRTU, which allows for the customized creation and management of portfolios, as well as the ability to share them with other users, reference points and related strategies.

The advanced use of Bloomberg on a daily basis at our school allows our students to develop better analytical and information-sourcing skills, consolidating their  global vision.

Source:  Bloomberg, Portfolio & Risk Analytics.

Real investment platforms

There are currently two online platforms in Mexico for investing in government bonds and stocks with a minimum deposit of just $100 Mexican pesos.  

·       Cetesdirecto: This website was developed by the Banco Central de Mexico [Mexican Central Bank] with the aim of strengthen a culture of savings among lower-resource investors. This mechanism offers the opportunity to invest in government bonds, which offer better market performances at a lower risk. The deposit is made in a Nacional Financiera (Nafin) account, the most important development bank in Mexico, which operates as an investor counterpart, thus providing a higher level of security.

Via this portal, students open their own account and learn how to valuate each financial instrumentand select the ones that are most appropriate for  the prevailing market conditions. Subsequently, as the course progresses they increase their invested amount while also submitting their investment strategy, explaining their decisions and their results, following the detailed guidelines to ensure learning, supported by my professional experience.   

·       Kuspit: This is an online stock brokerage firm with an active platform where investors can invest in Mexican companies’ stocks. Given that this is a real investment, the students need to generate their RFC (Federal Taxpayer Registry code) and complete a risk profile questionnaire. Once the students are ready to invest, they select stocks in accordance with a detailed analysis, which allows them to invest intelligently, based on the research and analysis of a diverse range of financial indicators,  under the direction of the professor and the experts who contribute to the course.

These two investment options are called in the class personal investment strategies, where the objective is to make a real long-term investment in order to create a diversified fixed- and variable-income portfolio. At the same time students develop the ability to analyze stocks and bonds and the risks  involved. In addition, there are other online platform options for those students who have more capital, such as GBMHomebroker, Bursanet, Finamex, among others, which offer a wider range of securities in which they can invest, such ETFs, REITs, Fibras or Tracs.

Similar to Cetesdirecto investment, the participants design an investment strategy, following the criteria established in class, gradually including the knowledge they have acquired on decision making. 

Financial Market Simulator

The third component of the course is the use of a simulator in the classroom, where teams of students have to make investment decisions with a broader array of financial instruments, different stock exchanges and diverse currencies.

The platform used is FinamexTrader, which was designed by a Mexican brokerage firm and allows the teacher to personalize the “challenges”, varying from the amount of money assigned, commissions and types of securities that students are able to buy, and which works as a “mandate”.  

This is the most comprehensive simulator in our country, operating with real financial market information and making it possible to monitor and rank the teams, and assign them tasks. 

Source:  Finamex Trader.

Expert Speakers

Furthermore, experts on investment topics are invited during the course to share their experiences with students and trigger rewarding, meaningful discussions. We also organize visits to companies listed in the Mexican Stock Exchange (BMV) to see their facilities and interview executives, who explain their business strategies and financial results. Throughout this process students analyze the relationship between the companies’ business strategy and competitive advantages, and the performance of their financial indicators, stock price and growth potential. Moreover, students validate the company investments and analyze their social responsibility programs and the quality of their corporate governance, all of which are critical factors for making an intelligent investment.     

As a school, by combining the theoretical basis with teaching methodologies such as real case analysis, the use of technology and investing with real money, we are seeking to innovate the teaching-learning process. We want to develop the competencies in our graduates  that will prepare them to face the challenges of the world.

The incorporation of these learning strategies also implies challenges, such as the involvement of foreign students who are not able to access the proposed investment platforms since they do not have an RFC, for example. In these cases, we adapt and find ways for them to work, including accessing similar investment platforms in their own countries, which we then monitor even more closely. Another challenge we have faced is the relatively short duration of the course, which can make it difficult for students to achieve attractive yields, especially if the market is particularly volatile due to the uncertainty arising from the elections, exchange rate, interest rate changes or other factors. However, when faced with a scenario of greater uncertainty, students are forced to overcome this challenge by developing strategies to increase profitability.      

The diversity of our students’ profiles also makes the process more rewarding with team members from across a variety of fields. For example, we have had cases of students who previously worked in engineering and then suddenly discovered that they are passionate about the world of finance, so they end up working in the investment sector.          

Our highest performing students ,who develop these skills and competencies and combine them with CFA@Certification process, move on to take part in other unique experienced-based projects in business schools throughout Latin America and that we offer at EBS, such as: Clínica Bancomer, where students professionally manage a real portfolio of around $10 million pesos, under the supervision of a Bancomer Bank committee, thus training as portfolio managers. Another project is Burkenroad Reports, where students analyze the small-cap companies listed on the BMV and create equity reports, giving professional investment recommendations, which are contributed to recognized databases such as Reuters and Factset. This process trains them as professional financial analysts with the advantage of the practical experience gained at the School.

The private equity and the family office sectors in Mexico are still very young and have only really been around for 25 years in any coherent way. If we have to acknowledge the great milestones that triggered local private investment in Mexico, without a doubt the participation of the Mexican pension funds in the private equity ecosystem has been the cornerstone for the multiplication of investments in our country, especially in infrastructure, real estate and buyouts.

Prior to 2009, the year when the government finally regulated the participation of pension funds and insurance companies in the private equity sector, the main institutional investors that invested long-term in Mexico were mostly international players and the government itself through its development banks system, with banks and groups like Nacional Financiera, FOCIR, BANCOMEXT and BANOBRAS leading the way. 

The most important players at that time were foreign institutional investors such as pension funds or insurers from the US, Canada and the UK. The majority of these investors participated through established foreign fund managers. Another important player was the multilateral organizations such as the IADB/FOMIN, the World Bank and CAF, and local and international foundations with clear missions regarding social impact or sustainability, such as the FMCN.org, or Banco Compartamos through Promotora Social México.

But the great absentees in the private equity sector in Mexico and, indeed, the entire Latin America region, have been family offices and high net worth individuals. 

That’s despite the fact that Mexico has a very prominent family business sector with family businesses accounting for more than 85% of the country’s companies. In fact, 100% of the biggest Mexican companies are family owned. Family businesses in the country account for 70% of GDP and 90% of employment in Mexico, according to Tec de Monterrey’s Family Business Center. 

Recognizing an opportunity for its members, in 2013 the Mexicana Private Equity Association (Amexcap) picked 250 out of a universe of 1,000 relevant family-owned companies and made hundreds of calls in an effort to convince them of the benefits of creating their own family office entities. 

But back then few were interested. Today is a different story and we have seen important improvements. And the two organizations that are perhaps making more efforts to generate a culture of wealth management through professional investment entities are Amexcap that already has family office members, and AMAI, the Mexican Association of Independent Advisors, which effectively provides a “guild” of investment advisers to HNWIs and family offices. 

Nevertheless, much still needs to be done for Mexico to have a vibrant family office sector, and here are the main issues for family offices in the country:
1. Security: Without any doubt we think that the main problem lies with security issues in the country, which are still a big challenge, especially to promote best practices in the sector;

2. Lack of culture: We need to communicate more success stories of how family offices are being effectively used by families in Mexico. So we need to educate and network to make this happen;

3. Develop greater trust in local fund managers and trusted advisors: There is a lot of talent with international track records in Mexico that the nascent family office sector can pull upon; and

4. Tax environment: There are little or no incentives to promote the sector and develop a better ecosystem for entrepreneurs.

The challenges for Mexico to develop a flourishing family office sector are great, but there is certainly the will and desire to do so. Nevertheless, progress is being made and family offices will increasingly play a role in private equity and venture markets both locally and internationally in the years ahead. 

*Originally published in Family Capital.

Digital entertainment such as Netflix and Hulu allow us to watch our preferred series and movies on various devices, when and where we like. Amazon and Google find products or websites for us to purchase or review, and then provide us with personal recommendations based on them. Spotify and Pandora learn our musical tastes, and make them available to us at the swipe of a finger; and Facebook and LinkedIn update us on our likes and interests in social and professional circles.     

It is a similar situation with education – at least education that we can freely chose from. We can now access a wide and growing range of contents and resources of differing quality, including options such as Massive Open On-line Courses (MOOCs) available on platforms like Coursera, EdX, Udemy and LinkedIn Learning. Furthermore, thanks to Youtube we can now learn simple things like basic DIY or watch video tutorials for a range of other manual activities.     

Continuing education and executive development are now finding themselves face-to-face with this new norm, presenting them with new challenges and opportunities.  It is often said that “the organization’s employees and executives can choose what they want to learn”, however, this is not entirely true. The Chief Learning Officer – Business Intelligence Board presented research suggesting that only 25% of organizations genuinely involved their employees in the details of the knowledge and skills that they develop. Similarly, in an international study that covered over 1,500 training areas of various organizations and industries, the Human Capital Media Research Advisory Group showed that in the majority of cases, the leaders and directors had the final word on this decision.   

There are reports of “learning ecosystems” being created which personalize user experience. Investment is being made in platforms that can supply users with knowledge, under their required conditions at the time and place they want. Nevertheless, the reality is that the personalization of continuous learning and executive development is only just beginning. Faced with the imminent disruption of the training world, there is an urgent need for the   implementation of Artificial Intelligence or Machine Learning, which will be the true foundations of personalization. To achieve this, there is a fundamental need for investment in technology and development, as well as matching new knowledge and skills to the function, profile, interests and wishes of each employee.

What are innovative companies doing?     

Innovative organizations are already taking simple, high impact decisions in the face of these new technologies and initiatives being more financially and socially accessible. For example, Relativity, a technical provider that supports litigations and legal research, grants its employees up to 3,000 dollars a year to be spent on training, with the employees making their choice based on the “with freedom comes responsibility” scheme. Other organizations now allow their employees to spend 10% of their time at work on programs of their own choice, while developing new skills and knowledge that both parties benefit from.     

In keeping with this new trend, international companies such as IBM have also developed policies to attract and develop talent. They are focusing more on the skills the individuals have personally developed - or are capable of developing for certain roles - as oppose to their “credentials” (academic qualifications). Likewise, companies in the same sector, such as HackerRank, have opted to shift their training and development model to an individual capacity based scheme for each of their employees. 

Other companies in emerging economies such as India or Latin America are also considering comparable approaches based on the large challenges and opportunities that these regions are faced with, and the reason why is clear: if there are more individuals and organizations looking for personalized training based on their specific interests and needs, the development and sourcing of these specific talents will proportionally grow as a consequence. This will trigger the training areas of businesses to enter into an immediate period of deep transition. There are now new theories, models and ideas emerging to improve the developmental quality, knowledge and training for companies and their employees. This also means that as individuals we need to be more emphatic and sensitive to the fact that learning is a two-way street: every piece of information learnt from our company, needs to benefit both parties.

The world today is a place where training is becoming more and more personalized – with a focus on the mutual benefit of the individual and their employer, with or without technology. It will be those initiatives that manage to bring together these two objectives, which shall outshine the challenges faced by both in the immediate future.