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What Business Needs from Business Schools

Cookie-cutter programs are producing look-alike MBAs. Contemporary companies want creative, collaborative thinkers and leaders.

Photograph by Matthew Septimus
When John Reed, 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?”

As executives struggle with decisions that depend as much on their leadership abilities as on their skills as strategic thinkers; as they guide teams comprising people from diverse backgrounds and work with for-profit, nonprofit, and government institutions; as they face crises stemming from communications conflicts among different cultures, they find themselves asking the same question Mr. Reed did. His answer, in 1999, was: “On average, clearly the answer is yes.” In his view, business schools were doing a reasonable job preparing their students for fulfilling careers.

But in 2003 our answer is: “On average” is not good enough anymore.

Whether your company is a bank, a consultancy, a manufacturer, or any other sort of business enterprise, the current MBA education offered at most U.S. graduate business schools does not, in our view, adequately prepare people — even those attending the top schools — for the tougher-than-average challenges they will face when they start careers at leading corporations. Companies today demand good collaborative thinkers who cooperate to solve problems. Too often, schools deliver good analysts who compete to apply business-school formulas. Furthermore, companies demand specialized knowledge useful to particular professions. Schools, however, are more likely to deliver generalists who have trouble digging into special fields that can distinguish them and their employers. Companies demand leaders who can powerfully articulate ideas, orally and in writing, to motivate and guide their people. But schools tend to train people to simply assert their ideas; they don’t sensitize them to the critical value of being an excellent communicator.

As consultants who, along with our peers in other professional-services businesses, attract and hire students from the world’s most prestigious business schools — 38 percent of the students in Harvard Business School’s class of 2002 went into consulting — we would like to make a case for curriculum reform.

We are not advocating a radical overhaul: There is a middle road, in which business schools preserve the strengths they have today, especially in teaching quantitative and strategic skills, but reconsider curricula and teaching methods. Equally important, schools and companies should compare notes more often; ultimately, the gap between employers’ expectations and the skills of the typical MBA is one that business-school deans and business executives can close together.

The Big Gap
By how much does today’s MBA education fall short? A 1999 study of MBA graduates conducted by Mark Kretovics, then assistant dean at Colorado State University’s College of Business and currently assistant professor of higher education administration and student personnel in Kent State University’s Department of Teaching Leadership and Curriculum Studies, 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. But the MBAs did not outpace the nonbusiness group in five other equally critical areas: helping others, initiative, leadership, relationship, and sense making.

Evidence suggests these competency deficiencies are widespread among MBAs. In a 2002 poll by Canada’s Financial Post, 141 CEOs and senior executives rated non-business-school graduates as better — sometimes much better — than MBAs in commitment to hard work, oral communication, written communication, understanding the details of an industry, interpersonal skills, and even skills in marketing and sales.

 
 
 
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Resources

  1. Paul O. Gaddis, “Business Schools: Fighting the Enemy Within,” s+b, Fourth Quarter 2000; Click here.
  2. Mark A. Kretovics, “Assessing the MBA: What Do Our Students Learn?” The Journal of Management Development,Volume 18, Issue 2, 1999
  3. Jeffrey Pfeffer and Christina T. Fong, “The End of Business Schools? Less Success Than Meets the Eye,” Academy of Management Learning and Education, Volume 1, Issue 1, 2002
  4. Stephani Richards-Wilson, “Changing the Way MBA Programs Do Business – Lead or Languish,” Journal of Education for Business, May/June 2002
  5. Anne Sigismund Huff (ed.), “Citigroup’s John Reed and Stanford’s James March on Management Research and Practice,” Academy of Management Executive, Volume 14, Issue 1, 2000
  6. Stuart Crainer and Des Dearlove, Gravy Training: Inside the Business of Business Schools (Jossey-Bass, 1999)
  7. Association to Advance Collegiate Schools of Business, Management Education at Risk: A Report from the Management Education Task Force, April 2002; Click here.
  8. COMPAS and the Financial Post, “MBAs and General Master’s Tied for Performance: General Master’s Outperform MBAs in Hard Work, Sectoral Knowledge, and Communications Ability,” September 23, 2002; Click here.