The Future of B-School section includes:
Integrative learning and 21st Century education: it’s about more than B-School curriculums. Competitiveness and ducation in a global economy
July 2006
THE CONTINUING RELEVANCE OF B-SCHOOLS IN THE 21st CENTURY
Jim de Wilde
August 2005
MEMOS:
Globalization and the development of B-School curriculums August 20, 2005
Integrative learning and
21st Century education: it's about more than B-School
curriculums
Competitiveness and
education in a global
economy
July 2006
Jim de
Wilde
www.jimdewilde.net
INTRODUCTION: The end of
credentialism and the beginning of the age of collaborative
judgment
B-Schools are not alone in their attempt to provide relevant,
rigorous education in a post-Wikipedia age. The organization of
knowledge in an information-saturated open source age and the
development of curriculums that are appropriate to meeting the
challenge of the 21st Century remains a top priority both
for educators and for public policy makers. We are now in an
era of intellectual property-led growth or knowledge-based
industries or an information economy. Whichever buzzword we
choose to use, the issue remains that educational policy and
competitiveness agendas have merged. The competitive advantage of
the Finnish or Canadian economies comes from the current
capacity of the traditional western economies to organize knowledge,
commercialize new ideas, and create value-added information and
educated citizens. As
Asian science and technology
becomes creative as opposed to imitative, the nature
of global leadership in business will change.
The realization that this model is under challenge has
gradually worked its way into public policy discussions in
Canada
and North America in the last few years. There seem to be some
trends emerging and they affect the curriculum that the world's
leading knowledge centres will develop. This has real
implications for the way leading B-Schools and educational centres
will themselves innovate. It is commonplace
today to say that the next generation of global leadership will be
technology-literate and will understand intuitively, for example,
the ways social networking creates new social policy operational
models. It is
increasingly commonplace in Europe and
Canada
to say that the next generation of global leadership will understand
intuitively the intercultural dynamics and the impact of centuries
of globalization affect our strategies and decisions. For example, it will never
be possible again for a major world figure not to know the
difference between Shia and Sunni Islam. Five years ago, that was not
a criterion of qualities. The historical amnesia
inherent in social models has ended.
The challenge for professional educators is to create
curriculums and educational instruments which facilitate this kind
of leadership and disseminate these skills as widely as possible.
In an
information-saturated age, the generation of more data is less
important than the skills required analyzing it. In moving beyond an
era of narrowly-focused specialized credentialism, educators need to
create programmes and techniques which facilitate the development of
skills required for 21st Century leadership. It is in this context
which skilful innovative ideas like Integrative Thinking at
Rotman have emerged.
These remarks are intended to reflect on the state of
B-Schools in
Canada
and globally as we start the 2006-7 academic year. I will start with some
general observations on the globalization of knowledge:
First, it is clear that
China,
India
and
Japan
are developing a capacity to innovate scientifically. There are now
concentrations of expertise in Asia which
match the creativity in science and cultural industries that we have
long associated with North America and
Europe.
They create different models of validation. Chinese and Indian herbal
medicine are
empirical traditions based on centuries of
experimentation.
Second, Chinese and Indian knowledge is less concerned with
credentialism and more concerned with relevance. One has to be cautious
about predictions. In
preparing these remarks, I looked at some of the debate on competitive
advantage of
Japan
in the late 1980s. The discussion then was
premature, accurately understanding new Japanese trends (film
animation, consumer product engineering for example), but
dramatically underestimating the capacity for Japanese capital
markets to manage open innovation, and missing "disruptive
technologies" like the internet and satellite communications and the
impact that they would have on the Japanese model of technological
innovation.
Nevertheless, those predictions, extreme as they were in some
quarters were accurate about the global automotive industry and the
global consumer technology products
industry.
Third, as knowledge globalizes in an open source world, it is clear that the
ability to use knowledge creatively and innovatively remains the
source of competitive advantage. Only in an open society can
knowledge be disseminated rapidly, corrections be made quickly and
new ideas be disseminated thorough social conductors. These are difficult
preconditions to invent through public policy. They emerge from
cultures and explain geographical centers of innovation. The Korean film
industry, the Taiwanese music industry and the Japanese anime
industry are all clear examples of creative industries. The question is
whether they will affect the creative patterns that exist in North
American and European societies.
What we do know is that we need new ways to organize
knowledge.
Research is less important in an age where a first-year
medical student can theoretically be as up-to-speed on research on
pancreatic cancer as someone who has spent ten years researching the
issue. The skills
we need are different now and the disconnect between the demands of
the consumers of educational products and the organizational of
traditional university-based learning reflect this yearning for
different skills and capacities.
It is in this spirit that we have developed new approaches to
learning, the demand for commoditized courseware which avoids the
need for a thousand first year physics courses to reinvent
wheels. It is in
this spirit that students from Asia have
developed a smorgasbord approach to education, picking things off
the table as they "visit" Stanford or McGill, rather than purchasing
the pre-set menu.
It is in this spirit that the North American career market
has discouraged narrowly-specialized skills-sets in exchange for the
mixture of judgment, analytical capabilities and creative qualities
which were; ironically, at one level the hallmark of a traditional
elite education in an Oxbridge tradition.
B-Schools have taken the lead in producing the kind of
education required in a post-internet world. In part, this came
about because of the triumph of market-based policy analysis in the
1990s and the capacity of B-Schools to be the nucleus of the
invention of new business models. But in equal part,
this was because B-Schools had a unique positional good: they were the only place
where students collaborated with differentiated backgrounds. An MBA programme had
physicists, art historians, macroeconomists and chemical engineers
all seeking a particular set of skills and values. This turned out to be
what educational consumers wanted, even if they had no interest in a
career in business per se. However,
B-Schools within a North American university model inevitably
succumbed to the temptation to reward specialized research and we
ended up back where we started from. B-Schools need to rescue
education from specialization in an era where the practical
"integrated" judgment of experiential knowledge needs to be
distilled and transmitted as efficiently as possible if as a
society, we are to maintain a competitive advantage based on our
capacity to innovate.
It is in this context that the Rotman adventure in Integrated
Thinking offers a chance to reassess curriculums and educational
needs. In our
current organization of knowledge, B-Schools remain the one
place where a student of the IMF can work with someone who has
worked on emerging markets portfolio strategy at an investment bank
and see how their paradigms combine in collaborative work. The ability to do this
and do more of this will differentiate the most successful economies
from poorer performers in this new era of globalized open source
knowledge. It is
in this spirit that I offer some observations about how this can be
arranged in a curriculum that combines rigorous analysis and
integrated thinking.
PART ONE
Integrative thinking is
more than turbo-charged interdisciplinary research
In many conversations, students starting for college ask
about a "relevant" curriculum. In a parallel
universe business conversations begin with finding the research
skills necessary to solve particular problems: from the causes of
particular viral infections to the question of what Thailand's GDP
grows and Ethiopia's doesn't (neither was colonized).
In the focus on learning societies which is now part of the
agenda of competitiveness, there are many currents of thought
competing for the attention of public policy makers. We all want an
educated society. The
question is not only how we get there, but what "educated"
means.
In professional evaluations, we all use shorthand: "book smart, but no street
smarts". In analyzing
public policy situations we quickly detect the conflicts between
sociologies of knowledge:
Arabist historians who understood the clan culture of Sunni
Iraq versus "strategic" thinkers who thought they understood
geopolitical trends.
The many currents which exist in educational circles contain
those who want to see rigour developed, a Jesuitical model of
learning which then leads a trained mind
through the jungles of
accumulated data versus those who want a broader education where a
subtle cultured mind is prepared to understand the world. This current rewards
discipline, whether the discipline is of writing a dissertation on
Spanish poetry during the Renaissance or on the ecological problems
of Costa Rican rain forests.
One current rejects credentialism as leading people down
narrow paths and this current has given rise to some useful forms of
interdisciplinary thought.
Educators are preparing for this complex world. Some of the best
thinking about education is going on in business schools, fore
example the Rotman approach to
integrative thinking. At one level,
integrative thinking takes place when intellectual
cross-fertilization and creativity occurs. A lunch between a top
quality environmental chemist, a food scientist and a public policy
specialist on land-use can create a number of useful ideas. As most institutions lack
the framework to make this lunch happen, the institution which deems
its competitive advantage as creating a culture in which this lunch
is "ordinary" and "expected" achieves a status of leadership in
educational circles.
Interdisciplinary programs and products are highly valuable,
but they are only the starting point for a new approach to
education. There needs
to be more than this, and not just in business schools, but in the
search for better models of education in all undergraduate areas of
learning.
With this in mind, one
starts to address in an internet age where Wikipedia makes
information a very easily obtained commodity, what it is that one would
like the most dynamic and effective business decision-makers to have as acquired personal
software and how we can most efficiently facilitate their acquiring
those skills.
I would
start an approach at new models of thinking with three books:
John Allen Paulos'
Innumeracy , which requires non mathematical students to
be consumers of mathematical knowledge and demonstrates the dangers
of limited mathematical understanding in the calculation of risk.
Innumeracy leads to bad decision-making. By exaggerating
certain risks, I allocated resources inefficiently;
Peter Huber's Galileo's
Revenge (philosophy of science, sociology of knowledge) which shows
the importance of the sociology of knowledge in understanding claims
about scientific "accuracy". The
understanding of how scientific norms change returns us to the best
judgments we can make. Scientific
illiteracy goes many ways. Most
undergraduates today know the Brad Pitt (as character Jeffrey
Goines) monologue in Twelve Monkeys:
Jeffrey
Goines: Uh-huh. Eighteenth
century, no such thing, nada, nothing. No one ever imagined such a
thing. No sane person. Along comes this doctor, uh, Semmelweis,
Semmelweis. Semmelweis comes along. He's trying to convince people,
other doctors mainly, that's there's these teeny tiny invisible bad
things called germs that get into your body and make you sick. He's
trying to get doctors to wash their hands. What is this guy? Crazy?
Teeny, tiny, invisible? What do they call it? Uh-uh, germs? Huh?
What? Now, up to the 20th century, last week, as a matter of fact,
before I got dragged into this hellhole. I go in to order a burger
at this fast food joint, and the guy drops it on the floor. James,
he picks it up, he wipes it off, he hands it to me like it's all OK.
"What about the germs?" I say. He says, "I don't believe in germs.
Germs is a plot made up so they could sell disinfectants and soaps."
Now he's crazy, right?
Stephen Levitt's
Freakonomics . The
University of
Chicago economist's book
is an interesting attempt to broaden the appeal of a very innovative
approach to asking significant questions without pre-selecting the
manner in which they should be answered, a good definition of
"integrative learning"?
But what are the skills the successful decision-makers of the
future need to learn and how do they learn as they read these books
and analyze the contemporary world where scientific knowledge and
strategic decision-making seamlessly intersect?
Management educators should want to create business versions
of Ang Lee, a director who can manage creative artists,
technological skills, and create a film. The most successful
CEOs are likely to be film directors or symphony conductors in the
future. The
skills they need are to:
(a)
to be
numerate and scientifically literate in analyzing the decisions they
have to make;
(b)
to manage
interdisciplinary knowledge rigorously;
(c)
to be able to
manage functionally different teams (cinematographers and
special effects computer software designers);
(d)
to be able to
understand the logic of a discipline (e.g. environmental chemistry,
immunology) without
developing an expertise in it ;
(e)
to know how
to put together
"Mission: Impossible"
teams. By
this I mean combining different skill-sets and knowledge-bases
for different tasks, the way the team was assembled at the
beginning of the original TV show. This skill-set is the
equivalent of the social and interviewing skills required for making
the "lunch" between specialists productive;
(f)
to understand how incentives
structures can influence outcomes and reviseeconomic theory to be
much more empirical and less driven by
abstract mathematical theories
Much of this is the responsibility of the student, who is
ultimately the agent of integration. The reason we
consider some individuals to be "excellent" and others "competent"
is in significant part because of their capacity to integrate. At one level, integrative
learning is a synonym for pursuing excellence. At one
level, the student following David Brooks' superb New York Times
column of
March 2nd in
developing a formula for a culturally-enriched and disciplined
mind (learn a foreign
language to understand how other people think, read Plato, take
statistics, travel)
.
My overused
advice to younger family and friends that there are three
intellectual disciplines one must master before accumulating data:
philosophy of history, philosophy of science and sociology of
knowledge is annoying and possibly unhelpful because most
curriculums are not organized that way. But
understanding how Braveheart changed interpretations of Scottish
history, understanding how detective work on new forms of virology
van be organized, and understanding why we stuffy some things more
than others equips an undergraduate with a cast of mind which
enables them to make decisions about larger issues (which research
grant should be funded,
whether or not there is a rational ground for military
intervention in Somalia,
which course of treatment to use for the pancreatic cancer we
have just diagnosed).
Great educators teach people how to learn, great educations
tell people what to think about, not what to
think.
PART
TWO A
Curriculum for Thinking About How We Organize Knowledge
How do we teach this 21st Century approach to a
subtle and trained mind? One of the great competitive
advantages of B-Schools is the heritage of case method
education. If we take
five topical articles from recent business publications and treat
them as cases, we can begin a discussion on integrative learning and
the skills required.
Let us start with five case studies, the teaching of which
could illustrate the skills discussed above. These are from a
collection of case studies I am collecting of important topics which
would be difficult to research within transitional academic
disciplines. This
constraint has not stopped the assignment editor of the Financial
Times, New York Times, Business Week or Wall Street
Journal:
(i) A very important
cover story in Business Week is entitled "Medical
Guesswork: From Heart Surgery to Prostate Care, the
medical industry knows little about which treatments really
work". It is a
very useful piece, but one other question it raises is "where
can I go to study this?"
The need for "thinking outside of silos" or "putting
together mixed skills while still having intellectual rigour" has challenged
universities for two decades or more.
(ii) The
investigation of business strategies if beverage companies dealing
with the medical issues
of enhanced stimulative products: Melanie Warner
"A Jolt of Caffeine,
By the Can", New York Times, November 23, 2005: an analysis of the business strategies of major
beverage producers, the competitive marketplace forthe Red Bull,
Mountain Dew product sector, the implications of
caffeine-additives in
health policy discussion (regulation in France, Denmark, Argentina
and Norway), implications for
health advertising, and analysis of behavioral biologists,
experimental psychologists and marketing strategists. The underlying implications of the
role of regulation in assessing nutritional standards, the role
of additives and
stimulants in non-regulated food and beverage are all discussed
in an excellent case study. Another Melanie Warner piece
on "what is an organic food?" shows
another development of the new integrated learning of
business strategy, consumer behaviour, public health issues,
measurement of drugs and additives to health, nutrigenetics, proteonomics
and a range of
cost-benefit analyses.
(iii) Peter Fritsch's November 2, 2005 Wall Street
Journal article on "After the Tsunami" shows how the
work done on creating democratic frameworks in
Indonesia
led to a different kind of distribution system. It creates an
analysis which is a synthesis of political economy, organizational
design, logistics and behavioral incentives. It would be difficult
to do this work within the intellectual boundaries of a political
science department. The
absence of sustained research of this quality shows up in the
skill-sets of those well-intentioned practitioners of development
assistance.
(iv) Roger Thurow's October 26, 2005
Wall Street
Journal piece on "Farmers, Charities Join Forces To Block
Famine-Relief Revamp" represents some of the best analysis applied
work on the
management of famine relief and the operationalization of key
management skills.
It is based on agricultural economics, organizational design,
behavioral incentives, and political economy and reflects a similar
integrative approach to a major question.
(v) Scott
Hensley's
November 8, 2005 Wall Street
Journal article "As Industry Profits Elsewhere, U.S.
Lacks Vaccines, Antibiotics"
on the allocation of U.S. drug research to areas other than
vaccines and antibiotics represents a similar type of innovative
investigative journalism. It
requires an analysis of sociology of medicine, epidemiology,
pharmacology, economics of innovation and public policy
decision-making.
All these questions
require an integrated answer. All of these articles
require a decision-maker reading them to interpret competing claims
about valid knowledge in scientific areas, or conventional thinking
about the organization of resources in contemporary societies. To act
effectively on these issues: (e.g. a management team for famine
relief, an investment team for effective health-care management)
requires managing interdisciplinary
"Mission: Impossible"
teams.
B-Schools alone in the
academic structure have always had to deal with teaching engineers
and PhDs in ocean physics in the same MBA class. By focusing on real problems
as the market generates them, B-Schools at their best have enabled
managers and decision-makers to think in integrative terms. As we look at
curriculums for the education of the next generation of leaders, we
need to know how integrative thinking, which some have defined as
"interdisciplinary research with rigour" can be organized.
PART THREE Learning from these
case studies and case research in integrative thinking
This new journalism is
"integrative", in the sense that it seeks to analyze situations as opposed
to operating within the narrow parameters of a specific "scientific"
discipline.
Fritsch's work could only be done with a mixture of
operational management, political economy and organizational
design. Thurow's
piece is a mixture of organizational sociology, political economy
and strategic management. Hensley's work is a
mixture of epidemiology, sociology of medicine, diagnostic medicine,
medical economics and pharmacology. Some of the most
interesting new research work is being done in new disciplines,
applied entomology, industrial ecology, and envirotoxicology.
Interdisciplinary work is only one aspect of integrative thinking,
but it does set the stage for the type of skills-development we are
currently discussing.
The nature of knowledge
in the modern world means that specialization without
contextualization leads to work of limited applicable value. For research in
business and in all areas, we need to ask what it is that needs to
be integrated and how this research needs to be designed. If you ask
certain questions: "how
do we label products to accurately reflect food safety issues?" or "how do we understanding
the organizational dynamics of famine relief?" it is clear that we
are asking for a very different approach to the design of "research"
than the one which takes place in the overly-specialized world on
modern North American universities. While there will
always be some research which requires enormous focus and
specialization, the antidote to the trends which have limited
academic research is found on the approaches of
the best journalism, where it has been kept alive for the past
couple of decades.
This reality means that the archives of the major world
newspapers, like Financial Times, the Wall Street Journal, the New
York Times and Business Week, have become the library for the
new educational institutions. It is impossible
to design a curriculum on relevant modern issues from academic
sources alone and this transformation of the economics of education
has significant implications for the commercialization of the kind
of integrative thinking which is taken for granted when it appears
in analyses like those of Business Week, Thurow, Fritsch, Henley and
Warner used as examples above.
As North American and European universities attempt to
restructure around new disciplines and needs, the demand for
innovative models of learning and teaching becomes greater than
ever.
"Integrative thinking" is the best first cut at a
restructured curriculum which will accentuate our capacity for
creative and innovative thinking in the global economy. The world
of business education and practical undergraduate education requires
both rigour and a breadth if perspective. It may well be that a
significant part of the best curriculums will include a revival of
old-fashioned concepts like an emphasis on the philosophy of science,
philosophy of history and sociology of knowledge as means to acquire
rigour. Having
done that, we can teach students to do research around practical
problems through case studies.
The capacity to teach
integrative projects rigorously will help differentiate the
superstar educational institutions of the future. A curriculum which
requires that students acquire the skills to answer important
questions should be the centerpiece of any blue chip learning
institution, whether B-School of undergraduate. It is a post-Wikipedia
approach to research.
A sample outline includes questions like the ones raise above
by world-class "journalists".
1.
How do we
assess the effectiveness of medical treatments? What criteria are relevant
for future allocation of effort in research and allocation of
resources in clinical treatment?
2.
What are the
lessons learned from the Aceh famine relief about managerial
requirements in organizing widespread disaster
relief?
3.
What lessons
for agricultural science and agricultural economics can we derive
from a study of the politics of famine relief?
4.
How do we
assess the health impact of nutritional supplements and integrate
this into the ethical marketing of food and
beverages?
5.
How do we
organize medical research and the production of pharmaceutical
products to meet anticipated demands within the current health-care
system?
Or new
questions:
1.
How do we
best assess the risk of bird flu relative to other medical dangers?
2.
How do
we measure and devise standards for measuring the acceptable level
of toxigens in drinking water?
These are the type of new
questions which can only be usefully framed within a language of
rigorous new disciplines. The
post-open source university of the 21st Century is a
fundamental component of defining competitive position in a global
economy. This means that
incentives have to be created for universities to participate in
collaborative knowledge rather than in areas of peer-reviewed
narrowcast research. The problems of
how to revitalize urban cores require an integrative approach,
linking urban geographers, industrial ecologists, water purification
engineers, exterior design landscape architects, demographers. It is increasingly
difficult for important questions to be answered by specialized
researchers and yet we continue to make the PhD the only way
research can be done in the publicly-financed universities and
continue to look at peer-reviewed research as the major criterion
for promotion and recognition.
In each of these cases
we need to be asking:
(a) What disciplines does
the decision-maker need
for our "Mission:
Impossible" team dealing with a specific issue? The ability to think broadly
and then make this kind of assessment requires an understanding of
the menu of expertise available.
(b) How does a
decision-maker assess the skills and competences within these
specializations?
(c) How does the educator create a transferable body of
knowledge resulting from the collaboration between these
teams?
(d) How does the
decision-maker assess the scientific risk and political risk of
questions like food additive regulation which are at the
intersection of so many contemporary public policy and business
strategy issues?
By working back from key
questions, the best curriculums of the future will develop a
rigorous integrating skill-set. That's what will be
demanded of the highest quality business decision-makers in the
21st Century.
Back to Top
THE CONTINUING
RELEVANCE OF B-SCHOOLS IN THE 21st CENTURY Jim de
Wilde
jim_dewilde@yahoo.ca
Remarks prepared for the
MBA class of 2007
August 2005
B-Schools have been at the heart of innovation-led growth for more
than two decades. They
have created a network for commercialization of new products, an
idea incubation factory for practical knowledge, and a renewable
stream of practically-oriented decision-makers who have internalized
a problem-solving approach to knowledge. It is impossible to
imagineSilicon Valley and the technology-led boom of the 1990s without
the role of Stanford
Business
School in transposing the
language of technology into the language of business.
B-Schools in the last three decades have also become one of
the great innovations in modern education. Great B-Schools have
become a cornerstone of economic growth activities in the
entrepreneurial economy, helping to commercialize the intellectual
property of engineering schools and create a "new" economy in the
process.
They professionalize business learning and
crystallize understanding of "best practices" in a range of
activities from organizational psychology to strategic investment in
emerging capital markets.
B-Schools have created the idea-rich networks within
which global innovation can take place, given a common lanaguage to
strategic consulting firms, venture capital firms and
entrepreneurial new technology companies. The best B-Schools continue
to provide an
environment in which new
business models can be tested. They continue to innovate in
the organizational design of companies. They are a zone where people
can discover (and invent) the next wave of investment
opportunities,
compare the demonstrated best practices in all the areas of
economic performance (from human resource management to venture
capital portfolio performance). Perhaps even more
importantly, the best B-Schools have become places where people can
build the networks and teams that can create value and improve the
efficient allocation of capital within the global economy. They distill the
learned experience of practical decision-makers, reflect on these
decisions and add value from a variety of different
perspectives.
So why have
there been so many recent articles and commentaries about the
"decline" of B-Schools?
B-Schools in context - from the
1980s to the present day
The political importance of the global B-School network
is in significant part that it has provided an intellectual
framework within which globalization can take place, global
leadership teams can be built and the best practices of economic
growth strategies can be adapted from one context to another. At their best, they have
provided a framework in which practical problem-solving can be
applied to a range of significant issues. At minimum, they also
have developed the organizational capacity to create new integrated
disciplines appropriate to examining, analysis and addressing many
issues which go far beyond the commonly understood definition of
"business".
They have created
value systems predicated on the search for the efficient
allocation of resources
and a conceptual approach to underlying issues of
wealth-creation that have given relevance to "economics" and
"economic research".
In the sociology of education, there is no other
organization
mandated or positioned to do this.
In
Canada,
some of us have advocated at least the rhetorical target of aimin to
have five of the top twenty-five business schools in the global
rankings be Canadian. Like all dramatic mission-statements, this is
meant to serve as an exercise in focusing. All educational
strategies need to be renewed to take advantage of the
opportunities presented by the world of internet economy and the
competitive advantage which comes from the efficient
commercialization of knowledge. Canadians
increasingly understand that our current prosperity is linked to
rising oil and mineral prices. The rise of oil and
mineral prices provides Canadian decision-makers with a window in
which to develop an economy that is also based on innovation and
commercialization. This
cannot happen without the unique organizational role of
B-Schools. So why
is there so much concern about the state of B-Schools and their
current role?
Concerns about the continuing
relevance of B-Schools
In part,
B-Schools have become victims of their success. MBAs were correctly
seen in the 1990s to be at the forefront of the development of new
business models.
Some of these models worked dramatically, and contributed to
the creation of companies like Yahoo and EBay. MBAs were also at the
epicenter of a disciplined market-based approach to economic
development (in Latin
America and the
EBRD-zone). Where these
"models" were fused with political skills, they created enormous
value and produced some of the most successful strategies for
economic growth in the late 20th Century. But that was in the last
century.
There is no doubt that the promotion of a business culture of
ethics, value-creation and community-building, while well-known to
devotees of Warren Buffett,
was out of favor in the climate of hyperactivity which was in
vogue by the late 1990s. The simple
business propositions that were known to a great number of people
without MBAs were not being sufficiently emphasized in B-School
classes. That should be
and is being corrected, but B-Schools lost their momentum
and are now struggling to develop the product for the next
phase.
B-Schools became stereotyped as a place where quantitative
theories replaced sound business judgment and, in fairness, many
left themselves vulnerable to this stereotyping. In this manner, they
became associated with the excesses of the
1990s. Sumantra Ghoshal wrote a widely-read and cited
piece in the Financial Times in 2003 entitled "Business Schools
Share the Blame for Enron" http://search.ft.com/search/article.html?id=030717006274 . B-Schools also
were seen as the arena in which arguments for globalization were
honed. This had negative connotations as
market-driven globalization failed to address the political
questions of how the conditions for sustainable prosperity were to
be met in emerging economies.
There are several valid concerns about the rise of
B-Schools. Some of them
are justified and suggest the need for some mid-course correction in the
strategic planning of business education. Because B-Schools are
involved in market-driven activities, they can do this. .
Concern #1:
B-Schools have been rendered obsolete by the web which can
deliver blue chip learning in a customized manner while B-Schools
rely on "courses" and other outmoded organizational
techniques:
The rise of B-Schools was a phenomenon of the early internet
age, when there was a need to provide students with both generic and
customized skills ranging from computer science,
understanding information systems and practical
understanding of management to corporate finance and international
marketing. The nature of open-source
software, the rise of wiki models, social networking and idea
exchanges has transformed the concept of "education". In this "concern",
B-Schools are either past their prime or have outlived their
usefulness.
Response:
B-Schools have to understand that they are now one of many
organizations whose strategic purpose is to organize knowledge. If
B-Schools can be value-adding knowledge navigators and
discriminating and objective reviewers of information, their unique
role and indisputable relevance will continue. The open-source world
is in constant need of ways to brand blue chip thinking.
Concern #2:
The excitement is elsewhere; the sector labeled business
education has been redefined: Like all rapid growth
markets, business education has seen an explosion of new
entrants. B-Schools
have themselves been vulnerable to disruptive technologies. Private
corporate executive education provides some of the ingredients
necessary for blue-chip learning. Blair Sheppard of Duke's customized corporate
education www.dukece.com
estimates in the
May 16th, 2005 Financial Times that we have tapped only a billion
out of a $34 billion global industry in customized executive
education.
The overall market for business education may significantly
larger than that, as Sheppard's remarks refer only to the corporate
executive education market. But as the place where
consumption of education products changes from "courses" in
"classrooms" to web-enabled digital communities, the nature of the
competitive market in
knowledge and information changes. Financial media and
strategic consulting companies are moving into the space of
B-Schools, using simulations and scenario planning exercises to
train executives. This leaves B-Schools to do the more commoditized
learning process.
Bloomberg becomes as much an educational product as the
Pearson Education www.pearonsoned.com .
Response:
Blue-chip corporate education functions will carve out a
significant portion of the top-end of the market in strategic
management. No
web-site can compete with the Wall Street Journal or Financial Times
in organizing networks of discerning analysts to focus on a topic of
immediate importance, e.g. the impact of the Iranian elections and
oil-prices.
But that is quite separate from the task of organizing
knowledge for the purposes of transmitting it efficiently to the
next generation of decision-makers. The
knowledge-production sector is being redefined and the relationship
between wikis, Dow-Jones and a B-Schools curriculum has to be
calibrated accordingly, but that means that B-Schools adjust their
product and manage the expectations of their clients.
Concern #3:
The political environment in which business is situated
has changed and business in general isn't the "thought leader" it
was in the pre-Enron 1990s: Much of the current attitude is
reflection of mood in the larger political
environment. The
media has swung from focusing on the latest billion-company started
in Silicon Valley to the few Fortune 500 companies which have proven
to be seriously ethically-challenged. Enron's business model
wasn't the problem; the problem was an organizational culture of
undiluted greed and arrogance.
Unfortunately, it is often hard to convince a casual observer
of the difference between these two issues and sometimes almost as
hard to convince a professional financial journalist.
Arrogance is always the most visible form of
incompetence. It
should
therefore be the form of managerial incompetence that is the
most easy to detect.
Financial markets should have punished this arrogance, but
were caught up in a collective fear of being left behind.
Somehow the public image of MBAs became associated with the
exorbitant profits and compensation packages of the 1990s rather
than the models of professionalization of management that were the
hallmark of so many blue chip operations. This "concern" suggests that
the market has moved on in search of different "thought
leaders".
Response:
Political trends do fluctuate. The wealth-creating
role of celebrity CEOs was exaggerated in the 1990s and the number
of ethically-challenged firms that have done damage to business
confidence has been exaggerated in the 2000s. The role of
B-Schools is to expose arrogance and greed as the kind of managerial
incompetence that it is.
Quality B-Schools will focus on developing the kind of
practical strategic management that leads to longterm growth and
rewards sound decisions over a longer period of time.
Concern #4:
Business education has become a saturated market and
B-Schools have not done enough strategic thinking
about product differentiation: This is one way
of saying that there are too many B-Schools and the sector needs a
correction as in any product-area where there is suddenly
over-supply.
Response:
Obviously, the curriculum of a community college in a small
town in northern
Canada
should be different
from that taught at Rotman or INSEAD. That doesn't mean that
business education is spread too thinly if it tries to reach more
people as part of a programme of skills development, promoting
economic literacy and facilitating career flexibility in a modern
economy subject to rapid and frequent disruptions. It does
mean that we need to think strategically about product
differentiation. It
also means that B-Schools should be careful not to reinvent the
wheel, but to concentrate on areas where they have specific
expertise. This
will be greatly helped if the pressure to produce "more" research
and cases is replaced by a pressure to produce better research and
more relevant case studies.
Concern #5:
B-School fads lead to bad decision-making. They are excessively
oriented to themes which can be studies quantitatively: Ghoshal's
argument in the Financial Times piece cited above warned that by
erroneously trying to turn finance into a "science", the
door was being opened to an organizational culture disconnected from
the real world and values of business decision-making. Warren Bennis and James
O'Toole write in the April 2004 Harvard Business Review that
B-Schools have "lost their way" by becoming too theoretical and
removed from the practical world of business decision making. Jeffrey Garten, in a
valedictory interview to the New York Times on his retirement as
Dean of the Yale School of Management, points out the difficulties
of applying the university tenure system derived from other
disciplines to the need to develop top quality B-School
academics.
Response:
The core of Ghoshal's argument, compatible with
Bennis/O'Toole and Garten is correct and illuminates the
dangers of "fads" from any source. To the extent
that B-School
"research" is preoccupied with fads like trying to create a science
instead of teaching about the
practical judgments of human decision-makers, then it is not
surprising that this would lead to a form of economic
decision-making prone to errors. There is no
guarantee that bad fads or wild goose chases will not come into
business (or medical) research ever again. But the treatment requires that
B-Schools be held
accountable to standards that are relentlessly practical. All the
stakeholders in the world of business education need to resist
strenuously anyone who thinks business or finance is a
"science".
This is analogous to the "fad" that swept the teaching of
political studies in the 1960s and 1970s, teaching with disastrous
results the notion that complex political events could be understood
"scientifically".
http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=R0505F for
Bennis/O'Toole. Garten is in the New York Times, www.nytimes.com June
19, 2005.
Concern #6:
B-Schools are trying to teach things which cannot be
effectively taught in a classroom. This
is the most common "street-smart" critique of B-Schools. The argument is a
variant of "that's-not-the-way-it's-really-done". Business is basically
about hard work, a winning attitude, persistent
stick-to-it-iveness . The learned on the streets view
thinks B-Schools distract MBAs from the core
ingredients of practical business success.
Response: There is
no doubt that all endeavors in life can be self-taught. For every Bill Gates,
there are people who drop out of sight having failed to learn
adequately the skills necessary to innovate from outside the
conventional process. Most of us confess that our
favorite character on Law and Order was Lennie Briscoe, created by
Jerry Orbach as a great street-smart detective. Howver,
for every Jimmy Connors who innovated a
two-handed backhand by being a rebel or every Raoul Nadal with
a different strategic use of the lob, there are hundred of tennis
players who have tried to play unconventionally and have
failed. Most
sports coaches know that a winning attitude cannot be
taught. It can,
however, be improved by training and discipline. In that sense, business is no
different. Case method
teaching remains one of the great innovations of B-Schools. To the argument that
entrepreneurship or other "school of hard knocks" business qualities
cannot be taught, the reply is that that is true, but entrepreneurial
instincts can be cultivated and entrepreneurs can be made more
effective as a result of studying and analyzing other people. In many other areas of
business, a talented
person can learn efficiently from analyzing forty cases about
company creation, about managing cross-cultural organizations, about working with unions to
improve productivity.
In each of these areas, a student can learn from the mistakes others made, and
can be inspired by seeing how others solved complicated problems
before.
Concern #7:
B-Schools don't teach people to be good managers. This is a
variant of the same argument as the "school-of-hard-knocks" argument
in Concern #5.
Response: When
one sees the environment of top-quality MBA programmes, this becomes analogous to
saying Philip Glass is a very good composer, but he doesn't have
much to say about a cure for cancer. One response is
to say that this isn't
what top-quality MBA programmes have been doing for the last three
decades. Most of
the talent choosing to pursue MBAs has not planned on being a
"manager" for quite a while.
B-School education prepares young talent with the skills
required to play many roles in the modern business ecosystem, from
financial analyst to management consultant to venture
capitalist.
However, the idea that B-Schools don't teach "good managers"
is also debatable in itself .
There are a large number of hires made each day in start-up
firms alone where the knowledge base of a 30-year old well-educated
MBA adds enormous value to the collective skills of a start-up
management team. The
entrepreneurial revolution from which we have all benefited as
citizens and investors would have been impossible without this use
of the talent pool. A
talented engineer or scientist with a rigorous MBA, who has looked
at fifty business models of start-up companies in case-taught
classes, who has worked on an organizational design for a work-term
new venture and who has researched on-line the portfolio strategies
of a dozen venture capital firms can instantly add a great deal of
value to a management team struggling with the growing pains of a
new company. There is
no better way to teach managers and prepare all the other players in
this modern ecosystem of business on a large scale than by exposing
them to analysis of the best practices of management in cases,
formal and anecdotal.
Then, the learning environment has to create a mood that
helps them to develop the motivational and leadership skills
required to operate effectively in a business
environment.
Of course, there are better ways to learn management than an
MBA programme. They
just aren't scaleable. The best way to
learn to play the cello is still a "master lesson". A decade as an
apprentice to John Chambers ,
Meg Whitman or Jorma Ollila would be a good start, but not highly practical for
thousands of people.
Business skills, like many life skills, are not "teachable", but talent can be
developed.
It is an easy criticism of B-Schools to say that "the school
of experience" is the best way to learn. That again
misses the point of what great B-Schools do to prepare people for
the innovative front-lines of the modern economy.
Concern #8:
B-Schools are becoming too theoretical, too captured by
research projects that are remote from real business
issues. There
are some tendencies of
succumbing to inward-looking academic research and, in doing
so, B-Schools risk losing the competitive advantage which gave them
such an important and unique position in the new economy of the
1990s.
Response:
One hopes this problem is solved by the quality of the
warnings. It is
encouragine that the Harvard Business Review devoted so many
pages to the Bennis/O'Toole piece. The Garten interview shows
that this concern is being flagged in the financial
media. Once warned, B-Schools
can guard themselves against the virus of being overly theoretical.
Financial resources should go to those B-Schools and
B-School projects which add value to the economy, demonstrate how
innovation can be accelerated and produce a network of professional
B-School graduates aggressively practicing top-level ethical
management. The concern
that B-Schools could become distant from their community,
disengaged from the challenging practical issues of management,
investment and global business activities is a real one. A B-School
should not be place for
people who lack a passionate commitment to understanding and
improving the way business operates or think that an academic theory
knows more than John Inmelt at GE or Jim Balsillie at RIM.
At their best in the 1990s, B-Schools focus on innovative
approaches to problem-solving.
At a minimum, they provide an environment where networks
could pool and analyze information about investment trends and best
practices in management. They
have to be on guard against declining standards of
relevance.
Things for the MBA Class of 2007 to Reflect
On
The best B-Schools of the 21st Century will build on the
traditional functions of quality education:
(a) The importance of
networks for making things happen. It is important that
Shanghai bankers
understand the dilemmas of African capital management, otherwise
China
will not be able to assume a proactive and positive role in global
capital market restructuring as it starts to participate in G8+
activities. It is
important that African MBAs learn about the characteristics of the
Chinese economy and the impact that this is having on global
business and investment decisions. In creating these
knowledge-networks, B-Schools are laying the foundation for a 21st
Century prosperity.
(b)
Thinking ahead of the curve is a luxury of academic
institutions that don't have to meet deadlines for investment
reports.
This can lead to the brainstorming of new business models
that meet the challenges, needs and opportunities of our times. e.g. How do we
capitalize environmental agriculture, nature-based
therapeutics? How can
we develop a competitive market in industrial ecology? How do we create incentive
systems for different patterns of
transportation?
Once the
parameters of the debate are established and once the success
criteria for business education are clearly established, it becomes
apparent B-Schools are, in fact, more relevant than
ever. They are a
cornerstone of 21st Century education and a global link
which potentially can provide a language for the management of
globalization.
As we reinvent B-Schools so that they better deal with the next generation of issues,
let's pose a number of questions asking not what the right answers
is, but how would we want the next generation of business and social
leaders to be educated as to how best to make these decisions during
their career. An MBA who has addressed these questions
with his or her colleagues has a head start on acquiring the skills
necessary for global leadership:
(i) How does
Medicines sans Frontieres most effectively manage the treatment and
management of its operations in
Angola
dealing with the Marburg
virus? How does
it balance between epidemiological issues and immediate
treatment? How does it
organize research so that scientists and physicians can both receive
the attention to their needs required to be effective? How does it operate with the
Angolan government and international security forces in a manner
which assures that it can continue to function
effectively?
(ii) How does
Goldman Sachs or Morgan Stanley analyze the investment opportunities
generated by the patterns of Asian investment following an energy
security strategy, the decisions regarding Korean investment in
Uzbekistan,
Japanese investment in
Iran,
Chinese investment in Gulf
of Guinea area
states? How is
the impact of these trends on other investment opportunities and
acquisitions strategies of other clients assessed and how do
non-Asian institutional investors play these trends to maximum
advantage?
(iii) As a marketing issue, how
does a firm with a new media product enter the Chinese market? Are
there lessons to be learned from the successes of Korean film
exports into
China
,
or the popularity of Taiwanese musical performers or is the Chinese
market a constantly evolving pattern of global
tastes?
(iv) How
does the finance minister of
Eritrea
create a framework for the development of entrepreneurially led
companies in
Asmara? What is the existing
framework for best practices promotion of entrepreneurship?
(v) How do
companies like Blockbuster with loyal customers and revenues prepare
for the new competitive environment presented by digital
entertainment and broadband on demand? How is the
strategic management issues of multiple source of competition
communicated to investors?
The
bottom line is that there is no single conceptual framework which
can provide everyone with the skills needed to answer these
questions.
At the end of the day though, the argument can be made that
people participating in rigorous discussions of questions like the
five posed above have a higher chance of becoming practical,
successful, ethical and innovative managers in the global
society than
people who haven't.
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