Business schools are undergoing a fundamental transformation in response to changing student values, the internet, globalization, shifting demographics, and acute economic pressures. So it is imperative that they innovate, refocus, and restructure, or be risk creating unemployable students. Managerial decision making depends as much on the Communication, Interpersonal Skills, Team Management Skills and leadership abilities of the executives as on their skills as strategic thinkers. May be business schools are doing an average job of preparing their students for challenging careers but average is not good enough anymore due to the intensity of competition & cut-throat fight for survival. Business schools should be known more for the effectiveness of its education program than for the efficiency of its admissions personnel.
When John Reed, the longtime Chairman of Citicorp, accepted the Academy of Management’s “Distinguished Executive of the Year” award in 1999, he ended his acceptance speech by challenging his audience of elite academics. “The business community knows full well that business schools perform a useful function [in] sorting potential hires,” he said. “The schools sort out from the general population those who are more ambitious, more energetic, more willing to subject themselves to two years without income. But the real question is: Do you give these students a set of skills that is going to serve them well over their careers?”
Student transformation will not happen if business schools are not open to partnerships with companies.
What Mr. Reed said years back is very much relevant even today and will hold good for many years to come. Business schools are undergoing a fundamental transformation in response to changing student “buyer” values, the internet, globalization, shifting demographics, and severe economic pressures. So it is imperative that they innovate, refocus, and restructure, or be risk creating unemployable students. Managerial decision making depends as much on the communication and interpersonal skills, team management skills and leadership abilities of the executives as on their skills as strategic thinkers. Guiding teams comprising people from diverse backgrounds, handling crises stemming from communications conflicts among interactions of diverse cultures, most of the executives find themselves asking the same question: “Do they have skills that are going to serve them well over their careers?” May be business schools are doing an average job of preparing their students for challenging careers but ‘average’ is not ‘good enough’ anymore due to the intensity of competition & cut throat fight for survival.
Whether your company is a bank, a consultancy, a manufacturing unit, or any other sort of business enterprise, the current MBA education does not adequately prepare people for the tougher-than-average challenges they will face when they start careers in leading corporations. Companies today demand creative, collaborative thinkers and good communicators who cooperate to solve problems, and not just good analysts who blindly apply business-school formulae. Moreover, corporate is scouting for talented specialists who have specialized knowledge useful to particular professions while business schools are more likely to deliver generalists who have trouble understanding special fields due to lack of training.
Today, corporate is looking for leaders who can effectively articulate ideas orally and in writing to provide motivation and mentorship. But business schools focus on learning by rote and don’t provide opportunity for free articulation of ideas through debates, discussions and brain storming. There is a strong case for curriculum reform and also redesigning the pedagogy of teaching in business schools. The curriculum reform need not be a radical overhaul: We can search for a middle road, in which good business schools preserve the strengths they have today, especially in teaching quantitative and strategic skills, but redesign some aspects of their curricula and change their teaching methods.
Bridging the Gap
By how much does today’s MBA education fall short? A study of MBA graduates conducted by Mark Kretovics, the then Assistant Dean at Colorado State University’s College of Business provides striking findings. The study, which assessed 12 skill areas, showed MBA graduates were significantly better than a control group of university graduates not enrolled in a business program in seven categories: action, goal setting, information analysis, information gathering, quantitative skills, theory, and technology. However, MBAs did not outperform the non-business group in five other crucial areas: helping others, initiative, leadership, relationship, and sense making. In an article by Stanford Graduate School of Business, Professor Jeffrey Pfeffer published in the inaugural issue of Academy of Management Learning and Education, Professor Pfeffer and co-author Christina Fong argued that, with the exception of perhaps a few top schools, MBA programs provide little of use in the real business world and are especially lacking in on-the-job experience, leading and managing others. Professor Pfeffer and Ms. Fong noted: “Without a larger clinical or practice component, it is not clear that business schools ever will impart much lasting knowledge that affects graduates’ performance.”
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Cause and Effect Analysis:
There may be number of causes for the drawbacks evident in the quality of MBA education. One could be that business schools mistakenly defer to students when they’re designing their curricula, reacting to the demands of students who prefer the fun of strategy. That is the reason why MBA programs are not attentive to the intricacies or nuts and bolts of problem solving and other competencies that employers demand. It is unfortunate that in most B school students are not taught to pose the question “why” and to persist with asking why until they cannot ask it anymore, this is a very important element of effective problem solving.
Another cause of the problems with MBA education is that a large majority of MBA programs are very similar to each other. Once upon a time Harvard was known for producing great General Managers, Wharton or the University of Chicago was known for producing great Quantitative Analysts, and Stanford was known for great technologists. But now the graduates from all these programs are very similar to each other, as programs have become more and more generic and less impressive in any one of the areas. Convergence undoubtedly is of great help in competing apples to apples in the rankings, but when it comes to competing for jobs, one-size-fits-all does not work. For example, students going into consulting, those going to bank and those going to the finance department of an automotive company all need different skills. Companies do not get the well-rounded top talent they’re looking for from business schools.
MBA Program Reform: Key Principles:
More courses in “people skills”, these courses are indispensable for effective management.
- Improving the problem solving capability of the students by teaching the basic skills and tools needed.
- Providing strong foundation in theories of economics, measurement, governance, psychology, human behavior, and leadership.
- Curricula to be designed on learning-by-doing, and applying multiple disciplines on the job.
- Motivating the students for taking electives outside the traditional core curriculum.
- Create industry-specific differentiated curricula and allow students to concentrate on specific industries
The Reform Path: Six Reforms:
Students, schools, businesses, the governments and as well as the general public would be served better if business schools begin to implement change in the following six areas.
Business schools should include more courses on communication, leadership, human resources, psychology, and other fields that provide graduates with people management and team management skills. The way to do this would make the students work on collaborative projects that emphasize the development of people skills on top of regular classroom lectures, reading, and paper writing. Projects could be individual or group, but the emphasis should be on applied learning that forces students to question, think deeply, weigh alternatives, and create. Project work also involves more management skills — listening, influencing, judging, and selling. There are several business schools that have adopted team-based projects to simulate on-the-job situations.
We can take an example from the University of Chicago that offers a LEAD course, a mandatory one-year experiential leadership course for first-year students. This course uses role play and other techniques, and develops expertise in negotiation, organizational development, interpersonal communication, and leadership. In one three-day seminar, students give an “elevator speech” and then a “pitch.” Professors videotape presentations to give detailed feedback. In another module, students learn team dynamics. Second year students serve as teachers and mentors in the course, which reinforces what is learned in the first year. The course runs along with more conventional coursework, so students have opportunities to practice their new leadership skills while studying the regular curriculum. Business schools need to introduce and lay stress on courses that offer the basic skills and tools needed for problem solving. These skills would include data gathering, data analysis, and innovative problem solving methodologies and tools. MBA graduates often stop short of getting to the root of the problem because they have not practiced these tools & techniques in class.
More and better foundation in theories of economics, measurement, governance, psychology, human behavior, and leadership are required. This would help students go beyond case studies to analyze problems and devise solutions to problems they have never encountered before. If students learn the theories, and nuts and bolts of microeconomics, for example, they may be more prepared, say, to develop a good competitive pricing strategy. If they have strong foundation in theories of human behavior, they may be more prepared to suggest solutions to team or solve motivational problems. Diving deeply into theory, students can create more appeal in the mind of their employers by showcasing their specialized knowledge of a subject.
Business schools should make changes in their curricula so that students can integrate their learning and apply multidisciplinary approach to any job. Most of the times students are usually forced to learn about each of the fundamental business disciplines (such as finance, strategy, operations, and marketing) treating each as a water-tight compartment when in actual life there is integration among so many streams while managing and solving problems. MIT’s Sloan School’s “Leaders for Manufacturing Program” is an example of a curriculum that integrates subjects ranging from manufacturing processes and operations management to leadership and change management, and that emphasizes on-the-job and classroom training. The “Leaders for Manufacturing Program” runs two tracks of learning at the same time, one covering traditional classroom subjects and the other covering “leadership and integrative” activities outside the classroom. The non-classroom track includes leadership seminars, 15 plant tours each year, and a thesis. In the second year, each student spends six and a half months as an intern at one of the 20 partner companies.
Business schools should motivate the students to take full advantage of courses outside the traditional core curriculum. Most of the students do not wish to diversify their course load. This leads to a lack of differentiation among the graduates. Business schools offer plenty of electives but most of the MBA students are sticking to finance, operations, and strategy. Graduates who wish to go into management consulting, for example, would gain by exploring deeply the subjects such as Microeconomics, Competitive Dynamics, and Statistics in addition to their broader management training.
Business schools should have the commitment to recreate differentiation in their curricula. This is not to say that business schools should leave the mainstream courses, but MBA programs can offer courses to students that allow them to concentrate on an industry. For example, schools can offer students who want to go into investment banking, a tailored course of study that specifically prepares them for these fields, not just by offering electives, but by creating a discrete set of courses and experiences. Schools should ideally follow a “practicum” approach in which a large portion of a student’s credits are related to supervised-real-work in his or her area of concentration. This is not the same as an internship, which is typically not under direct supervision of the business school. Over the last few decades several business schools have made drastic changes in their curricula and in the pedagogy of teaching in response to wide spread corporate dissatisfaction with MBA graduates. But still business schools didn’t change enough to take care of serious curriculum weaknesses in such areas as communications, relationship management, leadership, and problem solving.
Moreover, even where course offerings in non-traditional areas were added, it did not lead to necessary changes in the all-important core course work, or the ways in which students are taught. Students need more opportunity to work collaboratively on projects that give them practical experience and training them for collaborating with teams. A blind focus on traditional lecture and case discussion over more complex experiential learning is not the way to go in this time and age. The problem is severe because instructors themselves are more comfortable using traditional teaching methods. By working with employers while designing an industry focused curriculum and pedagogy, business schools can redouble their efforts to meet employer needs.
Student transformation will not happen if business schools are not open to partnerships with companies. Partnerships can sensitize schools to the skills critically needed in the market today. This change in approach will not pay off for the business schools in the short term, but it will pay big dividends for the schools in the long term as companies continue to hire freshly minded MBAs rather than searching for talent elsewhere in the broader job market. Business schools should be known more for the effectiveness of its education program than for the efficiency of its admissions personnel, that doesn’t serve the school, the students, or the employers.
About the Author
Malini Pande holds a Doctorate in Economics. Her area of research was World Bank. She is a Gold Medalist. Dr. Malini Pande is a multi-skilled professional with expertise in teaching, research, writing, training, administration, managing and leading at the top most level.