Passion, People and Principles

Improving Mutual Understanding Between Business Schools and Business

post # 195 — September 20, 2006 — a Careers post

On Friday, the 29th of September, (8 or 9 days from now) I will be giving a speech to 150 faculty members from European business schools on the topic given above.

It just occurred to me that if I blogged about it here, some of you may have some ideas and messages you want me to pass along.

Traditionally, there have been four ways business schools (and other professional schools) interact with business:

Conducting research which helps us understand business better (i.e. an academic, intellectual purpose of contributing to knowledge.)
Producing prepared students, ready for productive work lives
Conducting research that is helpful to practicing business people
Conducting executive education programs for mid-career and senior people

Iâ€™m not sure what absolute â€œgradeâ€ I would give to business schools around the world on each of these things, but I donâ€™t think itâ€™s high on any of them.

Iâ€™m least equipped to evaluate the academic scholarly contributions of business school faculty — I was never a good academic even when I was a business school professor. And anyway, that first purpose is not what Iâ€™ve been asked to talk about (even though many professors would consider it their primary purpose and obligation.)

What about producing prepared students ready for business or professional life? As we have discussed here, I donâ€™t think many schools do a wonderful job with helping students develop the social, psychological, interpersonal, political and emotional skills to succeed in life. Business schools donâ€™t; law schools donâ€™t; PR degree-programs donâ€™t; education in general doesnâ€™t.

I did note in the Wall Street Journal special Report today (Wednesday September 20) that some business schools like Michigan and Dartmouth Iin the US) and ESADE (in Europe) are rated very highly in developing (or screening for) students who are willing team players without the pomposity that graduates of some other schools have. Anyone want to comment on what those schools are doing well?

I would not give business school faculty at large a particularly high score on producing useful business research. First, it should be noted that few of the key managerial ideas of past decades (TQM, Six-sigma, business process reengineering, etc) actually originated with faculty research. Get the impression that most â€œBIGâ€ ideas and big thinking come from consultants and business itself. Or am I being unfair?

I have written before that I am nervous about businesses using business schools for executive education. I think business schools can do a wonderful job at teaching analytics and things of the mind, but are less well equipped to teach managing (ie dealing with real live human beings.)

So what would I do to improve all this, even a little?

Here are a few initial opinions:

Build on strengths not weaknesses — most graduates of business schools (at least in the US and UK) go into consulting, investment banking and other advisory businesses (PR, accounting, etc.) Very few graduates really go to work for ‘regular’ companies. Maybe business schools should admit to themselves that they are training consultants, not managers.
Business schools like everyone else should spend more time listening to their custromers — if they can ever figure out who the faculty really want to serve. Other academics? Recruiters? Students Its very unclear.
Invite business people in to give lectures and seminars not to the students but to the faculty
Require that all faculty do a consulting job for a local business (NOT executive education) and have the client come back and report to all the students and the rest of the faculty how helpful the professor was
Make all business school academics run their own business, and report annually to the rest of the faculty how well it is going
Find ways to screen students (and faculty?) for character, not intelligence
Focus more on designing educational experiences (not content) that help students develop skills through guided practice (how to function in teams, etc.)
Stop trying to do a little bit of everything: require that each business school have a strategy, a target niche and a differentiation. Working to build this in competition with other schools will help faculty understand organizations much better.
Set publicly announced targets for the school’s startegyand appoint an external monitoring board (with high visibility and embarrassment.) Introduce accountability into faculty memebers’ lives.

So, those are some of the ideas I plan to throw out.

What would be some of your ideas of things business schools could do to improve their mutual understanding with business?

12 Comments

Warren Miller said:

You have a tall order, David, at least in my less-than-humble opinion. There is a significant disconnect between business academics and “practitioners” (a term I deplore). I have already sent you the piece that Ben Oviatt and I wrote for the Academy of Management Executive (1989) entitled “Irrelevance, Intransigence, and Business Professors.” That article leads with a quote from an unidentified business professor (who today is prominent at Stanford and his own blog!), and that quote tells the story, I think: “I’ve been in the real world. It stinks.”

It’s very tough, I think, to build a bridge between two groups that hold one another in something bordering on contempt. We sometime hear clients snicker, “Well, that’s the theeee-ree, but out here in the real world, etc.” They say that as if theory and reality are not related. In fact, what they’re really saying, of course, is that they can’t tell the difference between good theory and a half-baked idea.

On the other side, most business academics I’ve met don’t like business executives. My own view is that part of that is rooted in significant political differences—many business owners in the “middle market” lean to the right, while most academics, even those in b-schools, lean to the left. I am not sure that many b-profs even believe in the notion of profit. We all know that old adage, “Those who can, do; those who can’t, teach.” And I say that as a recovering academic and sometime adjunct myself.

Let me offer some comments for each of your specific points, and I’ll close with several recommendations.

Build on strengths not weaknesses — I have never understood why consulting firms hire people who’ve never been anywhere or done anything. If any 28-year-old came into my office and started telling me what I need to do to improve my business, my first question would be, “How many businesses have YOU run?” Beyond that, I think it’s fair to say that most MBAs go into consulting and investment banking because that’s where the money is. Industry pays less, unfortunately. Then the schools from which these kids graduate trumpet the “average starting salary” of their grads, and the cycle perpetuates itself. Until or unless industry steps up to the plate, I doubt this will change. However, I do think that every acceptance into an MBA program should contain the caveat: Please be advised that we cannot teach you how to do anything or make anything of value. Our graduates are prized by consulting firms and investment banks. We have no idea why. You’re on notice.
Business schools like everyone else should spend more time listening to their customers — The big problem, as you intimated, is defining who the customer is. If the customer is the party that buys “the product” that B-schools produce, then employers are the customer. Given the results of the most recent WSJ survey, it appears that some schools (Michigan, Dartmouth) are indeed listening to their customers. Both are fine institutions, but neither is what anyone would call “hotsy-totsy,” at least not in the sense, say, of Harvard or Columbia. Those schools tend not to produce team players, I think, because many faculty members at both places tend to be arrogant and condescending. Not surprisingly, that rubs off on their young charges.
Invite business people in to give lectures and seminars not to the students but to the faculty – great idea, David, but there’s an opportunity cost here that few smaller businesses can afford.
Require that all faculty do a consulting job for a local business (NOT executive education) and have the client come back and report to all the students and the rest of the faculty how helpful the professor was – I think you’re on the right track here, but I’d carry it further: a chunk of the professor’s salary would depend on client feedback. Until/unless the profs have some skin in the game, not much will change. They’ll still be “playing the game of business.”
Make all business school academics run their own business, and report annually to the rest of the faculty how well it is going – I’m not sure about the word “Make,” but it’s an interesting idea.
Find ways to screen students (and faculty?) for character, not intelligence – there are easy ways to screen for character. As I recall, you wrote about this recently, didn’t you?
Focus more on designing educational experiences (not content) that help students develop skills through guided practice (how to function in teams, etc.) – well, OK, . . .but only if you don’t want to encourage entrepreneurship. Then again, B-schools produce few entrepreneurs. Engineering schools do a far better job of that. B-schools tend to produce bureaucratic non-boat rockers. Most entrepreneurs are resolute non-team players. They see the world differently, and that scares the bejeezus out of the “corpocracy.” In my view, we need far more entrepreneurs in this country, and far fewer members of the corpocracy. As Schumpeter, Nelson & Winter, Penrose, and others have taught us, most economic growth comes from entrepreneurship and innovation. B-schools are lousy at both.
Stop trying to do a little bit of everything: require that each business school have a strategy, a target niche and a differentiation. Working to build this in competition with other schools will help faculty understand organizations much better – “A little bit of everything” seems to me to be a whole lot like “one size fits all.” It doesn’t work any better in B-schools than it does in haberdashery. Industry-type specialization would probably also go a long ways towards making published research more relevant to non-academic audiences. I think that some B-schools have moved towards specialization by virtue of the source of their major endowments (I think of the Waltons @ the U. of Arkansas in Fayetteville). A problem with specialization, though, is that many incoming students wouldn’t want to be tied down like that. Besides money, variety is another reason that consulting attracts so many grads.
Set publicly announced targets for the school’s startegy (at least you didn’t say “strategery”!) and appoint an external monitoring board (with high visibility and embarrassment.) Introduce accountability into faculty members’ lives – You’re talking about performance metrics, I think. Most schools, esp. the higher-end ones, would argue that they already have that: # of publications in top-tier journals. I do like the idea of an external monitoring board reporting back, though. The place to make the report is. . .at the graduation ceremony. That way, everyone who needs to hear will hear!

I infer that your comments are directed at graduate schools of business because of your reference to consulting and investment banking. Most B-schools these days require several years of real-world work experience before they’ll accept a candidate into an MBA program. I think they’re on the right track there, but I would take it a step further. I would make the minimum at least six (6) years of experience (the schools I know about say 2 or 3) AND I would stipulate that the individual could NOT come out of a firm that provided advisory services OR a government agency.

My second recommendation is to abolish all undergraduate schools of business. Period. I say that, but I should also disclose that I “are” a product of one of those programs. I believe that the vast majority of them are trade schools – they teach young people how to do something (accounting, for instance), but they don’t teach them how to think. Learning how think comes in engineering and liberal arts, not in undergraduate business programs. I always thought it was the height of tomfoolery when I taught strategic management to graduating seniors; after all, what on earth could they possibly contribute to a case discussion?

My third recommendation is to require all MBA students to have worked on and been a part of a research paper published in a double-blind refereed journal. That will give them an appreciation for just how tough good research is.

My last recommendation is to give a comprehensive exam before allowing anyone to get an MBA. The exam should be in essay format (to hell with the lawyers!) and failing MUST be an option. The test questions would require students to apply theoretical constructs to real-world case situations. They would be graded on their grasp of the theory, their ability to write, and the suitability of their application to the organizations described in each case.

In closing, let me say that most top-tier strategy professors do have more-or-less active consulting practices, in addition to active publishing efforts. In fact, the best-grounded (and most well-rounded) academics I know are those who produce knowledge (research) AND test what they do by getting out in the marketplace. The most useful research I read comes out of referreed journals with a significant non-academic audience (e.g., Strategic Management Journal and Journal of Applied Corporate Finance).

Some even leave academe completely (I think of Steve Kerr, Trish Clifford, and Hugh Courtney, for instance, though Hugh has returned of late), and those are the ones for whom I have the greatest respect. They have forsaken tenure for the chance at a much higher rate of return.

As I said at the outset, I think you have a tall order. If you challenge the status quo, as I hope you will, I am confident that you’ll develop a keen empathy for General Custer. But you’ll also be doing serious work and work which most of us who read this blog would heartily endorse.

Hope this helps, David.

posted on September 21, 2006

David (Maister) said:

Help? Ever heard of “cat” and “pigeons” in the same sentence? I will direct every single one of the audience in Europe to your remarks, Warren.

What do othe rpeople think?

posted on September 21, 2006

Steve Shu said:

David,

Although b-schools can clearly make improvements, I’ll comment only on #2, that you b-schools low marks (in general) on the following … “Producing prepared students, ready for productive work lives”. You comment that “I donâ€™t think many schools do a wonderful job with helping students develop the social, psychological, interpersonal, political and emotional skills to succeed in life.”

I have found that a number of schools do an excellent job in teaching students technical facility. The effectiveness is tied to caliber of professor, prior work experience of student, and b-school culture.

There are also professors that do a good job in motivating students to find new passions (where they develop committment and resolve) in their professional lives.

While b-schools may fall short on the dimensions you mentioned (and to digress, should they be responsible for that? to do so effectively might require ongoing monitoring into the alum years in a parent-child or mentor-mentee relationship), certainly some credit must be given to the b-schools for some of the things I mention above.

posted on September 21, 2006

David (Maister) said:

Yes, l should aacknowledge what (good) business schools DO do. But what does everyone else think of Steve’s question? SHOULD b-schools (and other schools) be responsible for helping students improve the skills I mentioned? CAN they? How important to students (or employers) is it to address tehse topics?

Enquiring minds want to know!

posted on September 21, 2006

RJON said:

Although I attended law school and not business school, it still seems to me that before one adult should presume to teach another adult about anything, the would-be-professor should ask the would-be-student what he or she would find the most valuable to learn about. . . and teach to that.

I have a hypothesis, based on conversations with many of my friends, colleagues & Rainmaking clients, that one of the primary motivations for going to business school for many students (as opposed to law school which is a required prerequisite for obtaining a license) is simply to have the credential.

If my hypothesis is correct (and it would be pretty easy to test), then enrollment should not decline by taking this approach. But rather, percieved value and hence enrollment would increase. . . all without having to make a big financial investment. Isn’t that just good business?

Somewhat sarcastically,

RJON ROBINS

posted on September 21, 2006

Duncan Bucknell said:

I am very biased because of my background, but my suggestion is to include ‘clinical training’ as part of the business school program. The faculty must participate in this part of the training program which should be run in conjunction with outside businesses.

Each of the professions in which I am registered – veterinarian, lawyer and patent attorney (the last two are separate professions in Australia) require lengthy practical (‘on the job’) training in order to qualify – and it works. If you tie this to oral examinations (co-examined by a faculty member and an external business person), then you find interesting cross-fertilisation of ideas and understanding – and more importantly, a more thorough learning experience.

I am an adjunct (in my specialty) at Melbourne Business School and I think such a program would work well.

posted on September 21, 2006

Nigel Burke said:

There does appear to be some dichotomy between academic excellence and real life application. This idea is explored by Warren Bennis his article â€œHow Business Schools Lost Their Wayâ€ (Harvard Business Review May 2005 – http://snipurl.com/wwid ). Bennis observes that the primarily evaluation method used in business school rankings and individual academicsâ€™ development is the level of publications in high impact factor peer review journals and not quality of teaching or commercial relevance.

In addition these journals tend to favour a scientific, quantitative approach. As what professors study and how they study it, directly affects what gets taught it is maybe unsurprising that business school graduates arenâ€™t equipped with the social, psychological, interpersonal and emotional skills to succeed in life.

The other criteria used to rank business schools is average starting salary or salary 3 years post graduating. Given the amount of time and money required for an MBA it is perhaps understandable that graduates are keen to see a return on this investment as soon as possible and starting salary seems a reasonable metric to ensure this happens. These graduates are attracted to consulting and investment banking which tend to offer higher starting salaries, it has been argued however that an MBA is merely an expensive filtering system for these high paying employers.

My particular interest is in the provision of business education to those people who do not wish to become consultants or bankers. It is perhaps useful to look at this in terms of the two groups outlined in your posting earlier this week onn strategy. On one hand there are the top officers in the top firms, these are the people chasing a place at a leading business school and subsequent career in investment banking. On the other hand are those people outside the traditional power structure, people who perhaps enjoyed Freakonomics or the Aprentice and wish to broaden their know without committing to a full MBA. A really good overview of this concept is available in the ariticle “Disruption in education” by Aaron et al (Educause review Jan 2003 – http://snipurl.com/wufq) which I strongly recommend.

I hope this provides food for thought. I’d be very interested in other peoples views and any feedback you have from your session next week.

Nigel

posted on September 23, 2006

David (Maister) said:

Thanks for the references, Nigel. Terrific comment. Rest assured I’ll let you know what happens!

posted on September 23, 2006

Hejustlaughs said:

Your post is mentioned in the carnival of business #23 over at HJL Money Blog located at http://pf.endlessgibberish.com

posted on September 25, 2006

david foster said:

Check out “Managers Not MBAs” by Henry Mintzberg of McGill University. I explore some of his thoughts in my post Management Education and the Role of Technique.

posted on September 25, 2006

Shaula Evans said:

David, FYI – I just read (via Rjon Robins) that Yale is experimenting with a new MBA curriculum.

posted on October 3, 2006

Shaula Evans said:

And one more related article: The Business Innovation Insider writes in Majoring in IBM, with a minor in Credit Suisse on finding “the idea of FORTUNE 500 companies invading the hallowed halls of our nation’s best universities is a bit alarming….”

posted on October 3, 2006