Change must permeate every element of a Business School, from overall focus to teaching methods and content, writes Ivo Matser
The MBA is an interesting phenomenon. On the one hand, the ‘MBA’ title is a brand, and one that is sometimes stronger than the institution or Business School delivering it. The word has an identity, even without the brand of the School. This identity has the flavour of success, high income, profitability and business careers. On the other hand, there are issues with MBAs. There is criticism regarding the learning provided and target audience, and MBAs can be perceived as not being sustainable or too short-term focused.
I don’t think that the MBA is suffering from an identity crisis, but the brand has less cachet than it did in the past. The influence of accreditations and rankings in the development of MBAs is substantial. Some say that these measures force MBA programmes into the ‘middle’ and make it difficult for individual programmes to be distinctive. I am not sure this is true and it seems too easy to make this claim.
There have been positive developments in the MBA market, despite the critics. For example, they have become more interdisciplinary and greater attention is given to leadership development.
This means that programmes are moving from business education to management education, and that decision-making processes are becoming more important. In addition, Business Schools have developed more subjects related to sustainability, stakeholder management and ethics.
The main accreditation bodies, such as AMBA, EQUIS and AACSB, have also developed sustainability criteria. And, recently, there were discussions about rankings and how to integrate sustainability into the assessment of MBA programmes. The Financial Times ranking, for instance, has announced changes to its criteria and a desire to move away from a strong focus on alumni salaries and salary increases.
Due to internal and external pressures, I think that MBA programmes and the systems around them are moving in the right direction. This will help to create a more positive attitude towards the MBA degree once more.
The need for change
Management education and the world of management is in flux. Technological developments will create new industries, new business models and totally different logics and cross-industry value chains. Technological innovations are the key to sustainable development and a ‘better’ world.
There are also trends that take the human factor more into consideration. For example, inclusive capitalism is an important movement for engaging leaders across business, civil sectors and governments, and encouraging investment in ways which see more people benefit from the economic system.
A third dimension is that MBA students are expecting an experience that goes beyond their career development. Added to this is the importance attached to international mobility, having a variety of experiences, and greater responsibility and transparency in business.
Looking at the MBA industry itself, there is evidence of a slightly growing market, but this is not a stable situation; competition is intensifying, the world’s top Business Schools are recognising decreases in their market shares and there are new international entrants from countries such as China.
There is a need for substantial innovation in both business and society, and it is urgent – not only from the perspective of climate change, but also due to the growing dissatisfaction of a large number of people, which can lead to radical political ideas that are mainly anti-establishment.
Are we ready to educate current and future leaders to face these problems and manage these complex factors? I fear not. Although we see a number of positive developments, those are changes within the system. To face today’s problems and manage organisations into a future of prosperity and to create a better world, we need systemic change. Instead of thinking about changes within the system, we have to think about addressing the system itself, and effecting a much more fundamental change.
Innovation, change, diversity and inclusion
Innovation is a key driver because it is the only way to find better solutions. This is the case for technical, social and system innovations. Innovation means change, which implies that managing change should be a core competence for managers.
There is too much resistance to change and attitudes need to shift. Change has to be seen as ‘business as usual’ and managing change as a context of stability. Stability and feeling secure should be related to change and development. Instability and feeling unsafe should be related to a standstill. This is the opposite of what we experience now. To make innovation successful, we need to adopt this new attitude towards change.
Diversity is another key driver and is required for innovation. To create critical thinking in programmes, and to support and make use of creativity, we need diversity: diversity of people, situations and contexts. We cannot solve problems for the future with solutions from the past. We have to mobilise and appreciate our differences.
The last key driver is inclusion. For real impact to come from innovation, inclusion is needed. It is impossible to make big steps in the ecosystem and the economic system in a fragmented world and to separate different worlds of decision makers.
What to change
MBA programmes need to factor in these changes and requirements. If Business Schools adopt their responsibilities and exploit the opportunity to differentiate their offer, they can have a positive impact.
The bravest and most entrepreneurial Schools will move from the ‘red ocean’ to the new ‘blue ocean’ (from traditional competition-based strategies to those that shift the focus to value innovation as a means of unlocking new demand and growth opportunities). But, what changes are needed in the context of the MBA, its stakeholders and peer groups, leadership development, and around the concept of didactic learning?
The MBA and the context: Much MBA content remains linked to traditional technocratic management styles, and takes an almost mechanical approach to fixing and controlling things. Control may be possible in a world without significant change but this is no longer the case, and business forecasting is becoming increasingly challenging.
Nevertheless, this mentality still influences many subjects in MBA programmes. It means change, unpredictability, complexity and uncertainty are treated as undesirable and assumptions are made to try to exclude these issues. The opposite approach is needed.
We need to embrace uncertainty and change, because this is the only way to enable real and relevant innovation. Innovations will never arise from spreadsheets, SWOT analyses, control systems or hierarchy. There is a myriad of modules about change management and innovation, but these are not enough; uncertainty and change should be tackled within all subjects, because it is a part of all business functions.
The MBA and society: Businesses operate within society and the innovations they need will therefore impact on society. Again, from the technological, social and system perspectives, this means that corporations should not innovate from an isolated position. The same should be the case in MBA programmes.
For example, technology, history and culture should be included, and I cannot imagine educating managers without factoring in the context of digitisation, smart cities, the circular economy, AI and inclusive capitalism. If these major issues are included in management education, it means that we include society in MBA programmes, and standalone sessions on sustainability will become unnecessary. Perhaps that is the key question: how can we design management education to make ethics and sustainability unnecessary?
The MBA and leadership: MBA programmes place an increasing focus on leadership development, with skills in communication, negotiation and how to motivate people acquired through training. For me, it makes little sense to teach leadership; it is behaviour supported by insights about leadership.
More innovative Schools also use neuroscience when it comes to leadership development, and this is a trend to support. Rational dilemmas from ‘business modules’ should also be included around the behavioural part of leadership development.
Ethical issues, or long- and short-term decision making, should be included in the behavioural side of leadership development. The idea that the path to a sustainable future is made up of ethically correct decisions and a focus only on long-term decisions is purely theory. The road towards a sustainable future will involve many ethical decisions relating to both the long and short term. It will be a road of personal growth as a reflective practitioner. This is another reason to include more ethics and sustainability in the capillaries of programmes. This requires a major redesign.
MBA diversity and inclusion: As well as covering societal and technological considerations and technology within MBA curricula, people must also be included. Diversity in student groups or peer groups will accelerate the process of bringing society into the classroom, or virtual classroom. This diversity will also aid leadership development and help students to address management dilemmas. Appreciating and embracing difference is also a case of ‘practising what you preach’.
The MBA and learning: most Schools will have their own views on leadership and how to ‘teach’ it. Globally, there is a move away from ‘ego leadership’ to more supportive and coaching styles. This is also consistent with the need for sustainable development and a human approach to business and society.
Didactic methods of imparting knowledge have the same dimensions. When we go from exploitation (control and certainty) to exploration (entrepreneurship and uncertainty) we have to go from teaching to learning. There is a need to shift the focus onto how people learn and away from ‘how to teach’, and this means the role of lecturers will gradually change.
Lecturers will become professional experts acting as mentors. They will mentor students and integrate business practice and science. Lecturers will no longer have to teach the commodities, and the digitisation of Business Schools and the MBA will be helpful here.
We will also have to be prudent with case studies; usually these bring in the past and, while this can be useful, students contributing their own challenges may add more value to the learning process.
The path of change in the business of MBAs will encounter resistance. Many people might think that this evolution is impossible, for a variety of reasons. Some of these may be true, but most will be based on yesterday’s logic.
Digitisation will be important and the business education sector has to move forward on this. There are many positives: digitisation will bring greater flexibility for students, increase efficiency and make commodities less costly. It will also have a positive influence on quality; there will be more tailored programmes, more space for lecturers’ expertise, and more room for them to act as professional mentors. Administration will also be more efficient. MBAs will be delivered in blended formats. Even residence-based MBAs will be about 50% online. This gives MBA programmes the opportunity to be better and more affordable, and to encourage more people to access this learning resource.
Changes to the MBA are needed and should be fundamental; that is the good news. We are moving into an era in which we will see new ways for Business Schools to differentiate themselves and offer attractive learning programmes. I do not think there is much to decide: the choice is to either move towards smart cities, the circular economy and inclusive capitalism, or simply disappear.
Ivo Matser is President at GISMA Business School. He is an economist, leadership specialist and certified Expert Marketing Professional.