The number of business school students today is, oddly, difficult to quantify. A Google search for the phrase “number of business school students worldwide” turns up no hits. Three years ago, the Wall Street Journal suggested that, as is the case with lawyers, the field of MBAs may be overcrowded. Like law students before them, business school students may see their degrees commoditized.
If you’re in business school now (or entering one this month), you may have read analyses showing that the return on a US$125,000, two-year investment in an MBA degree is not certain; or that career opportunities and management skills are as good without one; or that many MBA programs do not help students develop the skills needed to make ethical decisions or manage people well. (Three of the many books on this subject stand out: Henry Mintzberg’s masterful polemic Managers Not MBAs (pdf); Rakesh Khurana’s comprehensive and doleful history From Higher Aims to Hired Hands; and Mariana Zanetti’s screed The MBA Bubble.) But you also have an advantage over lawyers, engineers, humanities Ph.D.s, and any other highly educated people facing a shrinking job market. You have been (or are about to be) immersed in the study of differentiation.
In business, differentiation is the path to success: standing out from the competition, through your position or capabilities or sheer force of will, enough to carve a future for yourself. You will be called upon, throughout your career, to establish a distinct identity for your company. The more capable your future employer (whether a business or a not-for-profit) is at doing things other companies can’t copy — for example, creating powerful products, meeting customer expectations, or cornering the market in a particular sector — the more likely you will find success. You will also, if you are sharp enough, be able to use similar techniques to establish a distinct identity for yourself.
Personal differentiation isn’t just about building a personal brand, although it is valuable to establish a reputation, early on, for insights or expertise that few others can equal. It starts with recognizing a sobering reality about management. Management is an eclectic field, borrowing extensively from economics, statistics, psychology, engineering, history, sociology, accounting, and computer science. In each of these topics, people — including the members of your faculty, no matter how eminent — borrow imperfectly, often unwittingly duplicating others’ discoveries or seeing only part of the problems they are solving. The field is so broad, and so fragmented, that no one knows everything in it. Indeed, it’s often startling how little grasp even the most renowned experts have on the range of management knowledge available to them.
It’s often startling how little grasp even the most renowned experts have on the range of management knowledge available to them.
(I say this with some authority. I have been the editor-in-chief of this magazine for 11 years; an author or coauthor of several management and strategy books, including The Age of Heretics, a history of innovative and countercultural management ideas; a ghostwriter on several other books; and a teacher in a master’s program for new media entrepreneurs. But I am constantly humbled to learn about major fields of research or practice that I didn’t know existed.)
Why does this matter? Because as John Maynard Keynes famously pointed out, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” In other words, any decision made in business is a bet about the way the world works. And until you understand the theory you’re betting on, you can’t really test the decision or improve it.
So, what theories should you understand? As you go through school, spend as much time as you can learning about real enterprises: volunteering or doing internships, working during breaks, perhaps even founding your own. Look for the gaps in knowledge that managers have. For example, you may find yourself at a medium-sized company — a supplier of parts, or a relatively small technology firm with just a few patents. Many of these businesses have self-imposed limits; they do not look outside their technical specialties, and may not see opportunities available to them. They may not understand the logic of extending innovation into new domains. They may be like Polaroid, the pioneer innovator of instant photography. The company began to develop electronic shutters and imaging in the 1960s, but never broke away from producing paper-based printing, and thus couldn’t compete when digital photography emerged.
You may learn something about continuous improvement — the chain of ideas going back to statistical analysis to Western Electric, to W. Edwards Deming, to Taichi Ohno in Japan, to Lean Production, to Six Sigma, and much more. These ideas, grounded in diagnostic exercises as rigorous as any forensic investigation, are often relegated to the shop floor. But they also have immense strategic value, if you know how to make the most of them.
Pay close attention to the practices of managing people. The theories are so redundant and contradictory that they will feel like they are bending around themselves like origami. You may indeed have gone into business in the first place because the subject of finance is relatively clean and clear; it doesn’t have the messy ambiguities of, say, psychology or literature. Such preferences don’t matter. You will end up distinguishing yourself (or not) on your ability not just to work with others, but to inspire them, draw insight from them, observe them accurately, and contribute to their growth and development. The more people you oversee, the deeper the challenges will be, and the more you will be called upon to transcend your own human limits. There are many theories about how to do this, often under the rubric of leadership. Most of them are much too situation-specific to be of value — except when you need them.
Those who work with you, no matter your background, will recognize the depth of the challenge — and whether you rise to it. “I was formerly a carpenter at a construction company,” a personal trainer told me recently, “and every year we’d get another new boss fresh out of business school. They knew nothing about the business, but they thought they knew everything.” That’s the stereotype you will face. That’s what many people will expect from you. Your opportunity to distinguish yourself starts with being more willing than other MBA students to learn as you go, and with being more attuned to the high stakes of every decision you make.
Everyone else will be unconsciously following the dictates of some dead economist. In the country of the MBAs, you’ll have to strive to cultivate your judgment and figure out which ideas are worth heeding.