How Creative MBA Programs Are Overcoming Bad Times

(published in Forbes, February 2010)

A few imaginative winners stand out in a tough season for business schools.

2009 will not be remembered as a banner year for M.B.A. programs. Applications from prospective students hit record levels early in the year but then flagged as the months went on. Potential students questioned the likelihood of finding a job after graduation that would pay for the investment, or they struggled to raise the necessary funds as banks stopped lending to all but the most rock-solid prospects.

The key result of all this has been a flight to quality. Students have begun playing it safe by opting for major brand names. In the U.S. that’s been good news for leaders like the Wharton School and Stanford Graduate School of Business, and especially for Harvard Business School and Chicago Booth, both of which recruited their largest classes ever. The same thing has happened internationally. London Business School and INSEAD have both expanded their M.B.A. student bodies, at the latter from 900 to 980. But how are schools outside the global elite coping in the face of this student conservatism?

If there is one thing the less well-known schools where M.B.A. applications are holding up have in common, it is an ability to offer something different. But different can cover a lot of ground. For example at Notre Dame’s Mendoza College of Business, in Indiana, the faculty have created a curriculum that works ethical, social and environmental issues into traditional business courses, and it is proving highly popular with potential students. Of course many schools now play up their ethics-related offerings in hopes of attracting applicants. What sets Mendoza apart, particularly for a school in the U.S., is its unashamed acknowledgment that its approach is based firmly on principles of Catholicism. As one Mendoza professor, Lee Tavis, puts it, “Catholic social thought provides a base of principles to be applied, and the Catholic university environment provides the freedom, for people of any faith, to start shaping a principles-based business career.”

In Europe the Vlerick Leuven Gent Management School has come from seemingly nowhere to leap up in business-school rankings in recent years. Last year it doubled its M.B.A. class size, and applications for the next start date look likely to be up again, according to Peter Rafferty, the school’s international business director. He cites two main reasons for this–loans for students and jobs when they graduate. “As early as 2008 we could see that student funding could become a problem, so we put together a loan scheme that focuses on an individual’s future potential rather than his or her credit history. With so many other sources of finance drying up, it has been a definite draw. Just as important is our record of getting graduates into the workplace. We’ve never been just a conveyor belt into investment banking and consultancy. We’ve always reached out to a much wider constituency of employers across commerce, industry and finance. That has meant that our people have been a lot less affected by the financial crisis, and they’re still finding the jobs they want. And that gives potential students the reassurance they badly need.”

The same two draws–financing and employability–seem to be helping the M.B.A. program grow at another European school, ESMT, in Germany, where the class size increased by 50% this year. That relatively new school was founded in 2002 by 25 of the country’s top companies, including household names such as Deutsche Bank, Lufthansa and Siemens. Those founders, far from being silent partners, have remained highly involved with the school, providing both funding and job opportunities. “These companies act as partners in the M.B.A. program and guarantee high relevance to business practice,” says Zoltán Antal-Mokos, an associate dean. “They actively engage in real-life learning, and they also participate in the recruitment process. About half of our M.B.A. participants choose to join one of ESMT’s founding companies on graduation. Such strong corporate support shows that a business school founded by business is a successful model in management education.”

Melbourne Business School, one of the leading institutions in the Asia-Pacific region, has also seen its latest M.B.A. class grow. Dean Jenny George seems to share Antal-Mokos’ view that the secret may not be location, ranking or history but a unique underlying structural model. “We have the luxury of being what I’d term ‘quasi-independent,’” she says. “We have a strong link to our local university, but at the same time as a corporate body we have free rein to do what we think is best. That means we have the credibility to attract really good faculty but can hire people who don’t always fit the traditional, conventional picture of an academic. And that in turn means we can put together a learning experience that pulls in the very best students.”

Although 2010 is likely to be a better year for business education than its predecessor, it still won’t be easy. The competition among M.B.A. programs for committed, financially independent candidates will intensify, and many more schools will be tempted to look for some elusive way to stand out from the crowd. Jenny George, of Melbourne Business School, warns that that temptation could prove fraught with danger. “You have to be certain that what you have already isn’t doing the job,” she says. “If it is, then don’t innovate just for innovation’s sake. As the old adage goes, if it ain’t broke, don’t fix it.”

Business Schools Beware: Gen Y is at the Door

(article published in BusinessWeek, January 2010)

They say every army trains to fight the last war, not the next one. Could it be that business schools are in danger of falling into the same trap, gearing up to train the current generation of corporate leaders rather than the upcoming one?

The bright young things that schools hope will become their MBA students in three or four years’ time might look a lot like the occupants of today’s classrooms, but they differ in one crucial respect. They don’t just use the new technology that has revolutionized business over the past decade—they eat, sleep and breathe it. That means the lessons they will want to learn and the way they will expect those lessons to be delivered could be radically different.

Practically all major schools are addressing this development in various ways: by increasing the use of technology in the classroom; by including its employment in case studies; and by embracing social media such as Facebook, blogs, and Twitter. But all this is fraught with danger. Unless schools really understand the mind-set of the potential Gen Y MBA, they risk looking at best like enthusiastic amateurs and at worst like the embarrassing “cool dad” attempting to engage with their teenage children about the latest release by Jay-Z or Lady Gaga.

So who, if anyone, in the international business school community has woken up and smelled the forthcoming coffee so far?

VIRTUAL CLASSROOMS AND IPODS

Warwick Business School (Warwick Full-Time MBA Profile) in England is one of the schools that seems to have grasped the fact that Gen Y really doesn’t understand why its elders insist on working or learning on a face-to-face basis. As a result, it has constructed one of the most effective of the new breed of virtual classrooms. Going under the name of wbsLive, the system allows students to interact not only with their lecturer but also with fellow classmates, trading information and opinions and working together in project teams as if they were sitting side by side rather than on different continents. It’s now being rolled out across the school’s alumni community to encourage closer links between graduates and to bring a more personal element to the international mentoring scheme.

Also in Europe, HEC Paris (HEC Paris Full-Time MBA Profile) has shown much more than a flirtation with technology by working with Apple (AAPL), allowing the school to equip every MBA student with an iPod touch that will be used as a platform for learning materials, FAQs, filmed lectures, and connecting with classmates and academics. The initiative is part of an increasing involvement by schools including Yale (Yale Full-Time MBA Profile), Cambridge (Cambridge Full-Time MBA Profile), and Duke’s Fuqua School of Business (Fuqua Full-Time MBA Profile) in iTunes U, the online learning content available from Apple’ iTunes store. Other schools have joined similar projects such as YouTubeEDU, which hosts content from the University California at Berkeley’s Haas School of Business (Haas Full-Time MBA Profile) , and Academic Earth, where business content is generated by Stanford (Stanford Full-Time MBA Profile).

Outside the business school community proper, other educational providers have begun to work with Gen Y through the media that fill not just people’s working lives but also their leisure time. The leadership institute Mannaz has recently launched a mini-program with the provocative title “Are you an Orc?” The course examines the leadership tools and techniques used in the world’s most successful online game, World of Warcraft, which currently has more than 11 million players, and applies them to the real-world workplace.

COLLABORATION AND CONSENSUS

The presumption is that managing and directing international teams means the traditional “face-to-face” model of leadership is no longer possible and, for younger employees in particular, not even relevant. In this context, leaders need to be collaborative, consensual, and inclusive. Ironically, that’s exactly what a role-playing game like World of Warcraft teaches. It also seems to teach interesting ways of disposing of competitors using an eclectic mix of medieval weaponry, but nothing is ever perfect.

Perhaps the most forward-thinking ideas in this area have come out of the Pittsburgh Science of Learning Center, a sister institute of Carnegie Mellon’s Tepper School of Business (Tepper Full-Time MBA Profile). The Center’s director, Ken Koedinger, argues that to truly engage and excite the next generation of MBAs, technology should not just amend the current business school model, it should shake it up. He points out that we are only a step away from throwing out the idea of a business school as a set of buildings providing formal education and bringing in the concept of school as a knowledge “hub,” perhaps a largely or even entirely virtual one. Traditional history-based case studies, the bedrock of so many MBA programs, would disappear, replaced by real-time, real-life case studies in which organizations work with students and academics to solve problems and meet challenges on a day-to-day basis.

It’s an exciting prospect and, theoretically, one that could eradicate much of the herd mentality and stifled thinking that have led us into so many economic crises, from the South Sea Bubble to subprime mortgages. The question is: Who is going to have the vision and the courage to implement it?

Trying To Create A Well-Rounded M.B.A.

(article published in Forbes, December 2009)

In our increasingly complex world, becoming an effective business leader gets ever more difficult. Of course, it has never been simple, and commerce has always been affected by politics and diplomacy, the natural sciences, demographics and other fields that require specialized expertise. But change used to happen more slowly, giving corporate leaders more time to learn and evaluate and react to circumstances. Now, in our 24/7 world of instant global communication and interconnection, take your eye off the big picture for a moment and the results can quickly be disastrous.

Because of this, the people who run business schools have come to realize that training students in traditional subjects such finance, strategy, operations and the like is no longer enough. They believe that future generations of managers will need much broader educations to be able to master the contexts their companies operate in. After years of increasing specialism, the old idea of a broad education and of the renaissance man (or, of course, woman) has become fashionable once more.

In the U.S. this has led to a rash of double-qualification programs at major schools across the country. Wharton, for example, offers a combined master of business administration and master of arts in environmental studies, as well as an MBA and law doctorate in conjunction with the University of Pennsylvania Law School. In New York, Columbia Business School gives a dizzying array of dual degrees in conjunction with 10 other schools at its parent university in subjects as diverse as architecture and dentistry, social work and engineering and journalism and medicine.

Such set-ups may well turn out graduates with more varied skills than some classic MBA programs, but they also may simply end up producing doctors, lawyers and architects who better understand the importance of cash flow and good marketing. If you want to find more imaginative approaches to breaking down academic barriers to produce a renaissance MBA, you’ll do best to look at work going on at schools outside the U.S.

Alfons Sauquet, the dean of Spain’s ESADE school, in Barcelona, has been putting into practice his belief that a business school should be not a stand-alone institution but a hub that connects business, science and the arts in, if not a virtuous circle, then perhaps a virtuous triangle. This has led to programs where corporate managers and representatives of political parties and unions and others study together, resulting in, among other things, a putative partnership with one of the world’s most high-profile chefs and a philosophy-oriented MBA class focused on the study of Spain’s most famous literary figure, Don Quixote. Perhaps the best example of the school’s work to break down academic walls is its partnership with the Arts Center, in Pasadena, Calif., a top design school. That has produced a “Beyond Pretty” program that uses a mix of psychology, anthropology and sociology to try to tackle business problems, and that takes its participants out to “living laboratories”–otherwise known as bars and cafes–to see its theories in action.

In Britain, Warwick Business School now sends all its full-time MBA candidates to the CAPITAL Centre, a joint venture between Warwick University’s English department and the Royal Shakespeare Company. CAPITAL stands for Creativity and Performance in Teaching and Learning, and the center uses theater workshop techniques to help students understand and better employ verbal and nonverbal communication techniques. The idea is to teach not acting but all the soft skills that are important in business, such as teamwork, sociability, self-esteem and self-management. Nicholas Monk, a research fellow at the center, admits that some students find it a challenge to be asked to act out a leadership role in front of a group of peers. “Because this is so different to what they are used to, we always have some participants who think we’re just messing around,” Monk says. “But then we also have others like the student who said this sort of thing was precisely why he came to business school in the first place, to look at things in a different way. About 10% will hate it, and another 10% will feel ambivalent, but the rest really benefit from the experience.”

At the Desautels Faculty of Management, at McGill University, in Canada, dean Peter Todd believes many business schools have been guilty of graduating MBAs with too little contextual experience. He has consequently taken the idea of putting students in touch with ideas from other disciplines to a logical, if perhaps unexpected, conclusion–putting them in touch with themselves. The idea, which stems from the teaching philosophy of one of the school’s most renowned scholars, Henry Mintzberg, involves allowing each student quiet time, or “white space,” twice a week to reflect on his or her experiences. The premise seems to be that managers often have the answers to the challenges that confront them but don’t take the time to discover them, because of the demands of the day-to-day. As Todd puts it, “Management is about asking questions, not just providing answers. It’s as much about listening as talking. Reflection aids in developing mature managerial judgment.”

The true renaissance MBA, as familiar with art and design and the hard sciences as with a balance sheet and an organizational model, may still be some way off. But a definite change in thinking is underway at some of the more enlightened schools around the world. There’s a growing acceptance of the idea that the most effective business leaders of tomorrow will be people with a holistic approach to their jobs, not the narrow focus of the past.

Different strokes for similar folks

(article published in The Economist, November 2009)

Picture a typical MBA lecture theatre twenty years ago. In it the majority of students scribbling away furiously will have conformed to the standard template of the time: male, middle class and Western. Walk into a class today, however, and you’ll get a completely different impression. For a start you will now see plenty more women—the University of Pennsylvania’s Wharton School, for example, boasts that 40% of its new intake is female. You will also see a wide range of ethnic groups and nationals of practically every country.

It might be tempting, therefore, to think that the old barriers have been broken down and equal opportunity achieved. But, increasingly, this apparent diversity is becoming a mask for an insidious new type of conformity. Behind the differences in sex and sexuality, the varying skin tones and mother tongues, there are common attitudes, expectations and ambitions which risk creating a set of clones among the business leaders of the future. A future in which the methods and motivations of hotshots in Bangalore, Beijing and Boston are impossible to tell apart.

MBA students: spot the difference

Many of the corporations which led us into the current economic mess were also the most enthusiastic hirers of MBAs. Diversity, it seems, has not helped to address fundamental weaknesses in business leadership. So what can be done to create more effective stewards of the commercial world? According to Valerie Gauthier, associate dean at HEC Paris, the key lies in the process by which MBA programmes recruit their students. At the moment candidates are selected on a fairly narrow set of criteria such as prior academic and career performance, analytical and problem solving abilities and numeracy. This is then coupled to a school’s picture of what a diverse class should look like, with the result that passport, ethnic origin and sex can all become influencing factors. But schools rarely dig down to find out what really makes an applicant tick, to create a class which also contains diversity of attitude and approach—arguably the only diversity that, in a business context, really matters.

Professor Gauthier believes schools should not just be selecting ‘usual suspect’ candidates from traditional sectors such as banking, consultancy and industry. They should also be seeking individuals who have backgrounds in areas such as political science, the creative arts, history or philosophy, which will allow them to put business decisions into a wider context. Unless at least some students on a programme have this sort of grounding—and the open mind that hopefully goes with it—then the increasingly fashionable focus on ethics and social responsibility is unlikely to have a significant effect in the long term.

Indeed, there does seem to be a demand for the more rounded leaders such diversity might create. A study by Mannaz, a leadership development company, suggests that, while the bully-boy chief executive of old may not have been eradicated completely, there is a definite shift in emphasis towards less strident styles of management—at least in America and Europe. Perhaps most telling, according to Mannaz, is the increasing interest large companies have in more collaborative management models, such as those prevalent in Scandinavia, which seek to integrate the hard and soft aspects of leadership and encourage devolved responsibility and accountability.

Test of will

The impetus appears to exist, therefore, for business schools to create management teams that are diverse in more than just colour, sex and nationality. But if they are to achieve this, it may mean significant changes to the way they recruit prospective MBAs. Professor Gauthier acknowledges that the GMAT, the near-ubiquitous entry test for international programmes, can offer valuable insight into an applicant’s verbal and quantitative skills. But she also maintains that it reveals little about their interpersonal skills, leadership ability, integrity or adaptability.

In a bid to widen the MBA applicant pool, schools such as Stanford and MIT’s Sloan school are among a growing number to have adopted the GRE test (which is administered by Pearson, part owner of The Economist) as an alternative to the GMAT. The GRE includes an optional evaluation system that allows recommenders to rate an applicant on qualities such as creativity, teamwork, ethics and resilience. Though not measuring diversity in hard numbers, schools hope the test may encourage more non-traditional candidates from humanities and science backgrounds to consider the MBA among other graduate programme options.

However, gathering the information that institutions need to recruit a genuinely diverse class will require a much wider range of assessments, more in-depth interviewing, perhaps even for a new approach to the way the MBA is marketed. And, in these straitened economic times, it remains to be seen how many schools will be willing, or able, to follow Professor Gauthier’s call.

Business Schools denken um

(article published in Handelsblatt, Oct 2009)

Die üblichen Verdächtigen haben am Rednerpult erst mal ausgedient. Statt Vorstandschefs halten jetzt Gutmenschen oder Geläuterte die Eröffnungsreden in MBA-Programmen, hat Matt Symonds beobachtet.

Es ist gute Tradition an jeder Business School, die Neuankömmlinge eines MBA-Studiengangs mit einer inspirierenden Rede zu begrüßen. In den vergangenen Jahren gaben sich führende Vertreter aus Großkonzernen und Banken ein Stelldichein am Rednerpult und erklärten den Studenten, was diese tun müssten, um in ihre Fußstapfen zu treten.

Ausgelöst durch die Wirtschaftskrise und die Rolle, die einige führende Business Schools und ihre Absolventen nach Ansicht vieler Kommentatoren dabei spielen, haben die “üblichen Verdächtigen” als Identifikationsfiguren erst mal ausgedient. An ihre Stelle treten seit diesem Jahr Redner, die glaubwürdig weichere, grüne Themen vortragen können und an die soziale Verantwortung der angehenden Führungskräfte appellieren.

Ein Redner zur Abschreckung

An der Tuck School of Business in New Hampshire lauschten die Studienanfänger dieses Jahres den Ausführungen von David Stone. Stone, selbst Tuck-Absolvent, hat gerade Mikro-Unternehmen in Afghanistan aufgebaut. Zur Abschreckung hatte die Schule dazu noch einen ehemaligen Topmanager eines großen amerikanischen Unternehmens eingeladen, der wegen Betrugs im Gefängnis gesessen hatte.



An der Melbourne Business School in Australien veranlasste der Philosoph John Armstrong die MBA-Aspiranten zum Studienbeginn, ihre persönlichen Ambitionen zu hinterfragen. Sie sollten das Geschäftliche gedanklich enger mit Familie und Umwelt verknüpfen, empfahl Armstrong. Eine der führenden Schulen in Europa, die HEC Paris, verpflichtete den Umweltaktivisten Yann Arthur Bertrand, dessen Botschaft lautete: Nur ein verantwortungsbewusster Führungsstil könne den Planeten retten.

Die Frage ist, ob die Business Schools damit nur dem aktuellen Trend folgen? Werden nicht wieder die alten Industriekapitäne auftauchen und ihre “Gier ist gut”-Mentalität herausposaunen, sobald die globale Wirtschaft wieder auf die Füße kommt? Dagegen spricht, dass inzwischen auch die Unternehmen die Bedeutung von Themen wie Corporate Social Responsibility und Nachhaltigkeit erkannt haben. Härtere Gesetze, die Krise, Skandale, wie der um den Milliardenbetrüger Bernie Madoff, aber auch der Einfluss der Online-Kommunikation und die öffentliche Meinung haben diese Aspekte ins Zentrum der Aufmerksamkeit gerückt. In einer Ära schwindender Ressourcen erkennen viele Führungskräfte – und damit auch die Schulen, die sie ausbilden -, dass soziales und verantwortliches Verhalten tatsächlich wirtschaftlich sinnvoll ist.

Insofern ist nicht die Vielzahl der Vortragenden bemerkenswert, die für die Antrittsreden 2009 weichere, grüner angehauchte Themen gewählt haben, sondern die Tatsache, dass sie erst jetzt eingeladen worden sind. Schließlich haben sich viele Business Schools schon für soziale Verantwortung und Nachhaltigkeit eingesetzt, als die Kreditkrise noch in weiter Ferne lag. Angel Cabrera, der Präsident der Thunderbird School of Global Management, hatte schon vor fast zehn Jahren die Idee, dass MBA-Absolventen ähnlich wie Mediziner einen “hippokratischen Eid” leisten sollen. Die Lorbeeren für die Umsetzung dieser Idee hat Harvard-Student Maxwell Anderson jetzt eingeheimst.

Die Wirkung der Lehre ist die Tat des Absolventen

Und die HEC Paris predigt schon so lange verantwortungsbewussten Führungsstil, dass der französische Energieminister Jean-Louis Borloo jüngst beim 40-jährigen Jubiläum der Schule darauf verwies, die Idee, sich mit der Umwelt auseinander zu setzen, verdanke er seinem MBA-Aufenthalt an der Schule 1976. Natürlich war und ist es leicht für die Schulen, den Wert sozialer Verantwortung zu betonen. Der einzige Nachweis für die Wirkung dieser Lehren wird an den Taten ihrer Absolventen gemessen. In Anbetracht der Prominenz, die MBA-Absolventen wie die ehemaligen Vorstandschefs Richard Fuld von Lehman Brothers, Andrew Hornby von HBOS und Rick Wagoner von General Motors während der Krise erlangt haben, fragen Zyniker zu Recht, ob die Betonung der sozialen Verantwortung nicht bloße Lippenbekenntnisse waren.



Dabei wird aber häufig vergessen, dass jedes Beispiel für Gier und Anmaßung von denjenigen MBA-Studenten wieder wettgemacht wird, die nützliche und nachhaltige Arbeiten verrichten. Jason Chuei, ein Tiermediziner, der derzeit an der Melbourne Business School seinen MBA erwirbt, hat sich von der Vorstellung verabschiedet, ein hoch bezahlter Banker oder Berater zu werden. Nachdem er erlebt hatte, wie schlecht es in vielen Entwicklungsländern um den Tierschutz bestellt ist, baut er eine globale Wohltätigkeitsorganisation für Veterinärmedizin auf. Den MBA sieht Chuei als Chance, Führungsqualitäten zu entwickeln und ein internationales Netzwerk aufzubauen, um die Pläne umzusetzen.

Der Warwick-Business-School-Student Stephen Thornhill hat sich mit einer Nichtregierungsorganisation in Malawi zusammengeschlossen, um ein Programm zu entwerfen, das die Übertragung von HIV von Müttern auf ihre Kinder verhindern soll. Er sammelte 250000 Dollar Spenden, um das Projekt in Gang zu halten. An der Esade in Spanien haben MBA-Studenten eine ganze Reihe an Sozialvorhaben in Entwicklungsländern auf den Weg gebracht, die Bereiche wie die Abfallverwertung, die Wiedereingliederung Behinderter in die Gesellschaft, die Dekontaminierung von Wasser und die Nutzung von Solarenergie abdecken. Diese Beispiele zeigen, dass bereits heute viele MBA-Absolventen ihren Beitrag zum Gemeinwohl leisten – auch ohne inspirierende Antrittsreden.

Executive Education Fights Back

(article published in Forbes, October 2009)

Business schools weather the economic crisis by offering targeted, relevant leadership training.

Travel, top-class restaurants, even taxicabs. Discretionary expenses have been hammered in the last 18 months as companies look to cut costs and claw their way back to profitability. The chastened boards of AIG and others are forgoing their luxury retreats and private jets, and analysts estimate that such spending has been trimmed by as much as 30% in some sectors, and even higher in the financial services industry.

But what about training? Traditionally, executive education has been seen by many as a perk, a reward for past efforts and a bargaining chip for future loyalty. No longer. Both open-enrollment courses and customized training solutions are now an integral part of corporate strategy, as business schools and other corporate providers develop courses that are mission critical.

“Executive education is now an essential tool for implementing strategy”, explains David Newkirk, CEO of Executive Education at the Darden School of Business. “Take the example of a company like Westinghouse (now Toshiba) Nuclear.  Their business is maintaining nuclear plants, an important, but limited market. They need to innovate in order to expand their services, and prepare for a future that may include new nuclear plants. Growth requires leadership from the middle, the teams of managers and engineers who are technically expert and operationally focused, and importantly are the ones in touch with the customer.

This is where executive training can make all the difference, developing in them innovation capability that includes customer understanding, business judgment, and a mindset of controlled experimentation. A new strategy requires new knowledge and behavior from employees. Changing knowledge and behavior is what we call education,” says Newkirk.

Despite an overall downturn in the industry (the Center for Creative Leadership was forced to cut 25% of their workforce earlier this year, and Columbia and London Business School have seen business falter), Darden has seen business slow by only 6%. The school has strong ties in the aerospace and defense industries and hasn’t been hit as hard by cutbacks in the finance and automotive industries. “I’m relatively optimistic for the return to growth,” says Newkirk. “Our faculty ensures that what we teach is absolutely relevant and applies to today’s problems.”

The economic downturn is providing as many new opportunities for business educators as headaches. Mannaz, one of Europe’s leading training firms, provides executive development for global clients, and has seen increased demand for training that addresses the current crisis. “It is essential that an institution’s development is directly linked to the agenda of how to survive,” says Executive Vice President Jørgen Thorsell. “The greater the challenge and change you face, the more call for leadership throughout the organization.”

It’s a formula that seems to work. Mannaz’s international revenues are up 10% year over year, and the firm has been commended by the European Foundation for Management Development for its leadership development programs at companies including IT firm Fujitsu. According to Thorsell, the success of these programs, even in an economic downturn, is based on keeping the learning absolutely relevant to day-to-day circumstances. “The key to the approach is to tackle employees’ real-life challenges in real-time, so that they can apply lessons learned to the workplace not just at the end of the program, but right the way through it.”

Darden’s Newkirk says there is also a growing opportunity for business schools to compete cost effectively with strategic consultancy firms. “We are able to teach strategy that applies to today’s problems, and the line between business schools and consultancies is blurring,” he says. “Just think how much would you pay a consultancy firm to develop and implement a brand new business plan.”

Many open-enrollment courses are now designed specifically to respond to current economic circumstances and evolving business models. Harvard Business School has developed a course called “Building Business in Turbulent Times.” HEC Paris and Oxford’s Saïd Business School now offer a course called “Reinventing Management,” which challenges existing organizational and social models, based on the premise that we have reached a watershed moment in business history.

And as the financial system begins to pick up the pieces, NYU Stern just completed a timely three-day course called “Integrated Risk Management,” taught by risk expert Ingo Walter, author of Restoring Financial Stability: How to Repair a Failed System. The course offered a general focus on risk management, and includes substantive content on the financial crisis. This sort of innovation appears to be working: NYU Stern reports a 60% increase in attendance from last year.

Interestingly, almost three-fifths of the attendees for the Stern course came from outside the U.S., indicating that businesses are ready to open the travel purse strings when a course offers the right content. But educators are also using technology to shape their training solutions for tighter budgets. Mannaz uses virtual coaching and e-learning modules as a component of their courses, minimizing the need for travel. And at Darden technology is being used to prepare students to get the most out of a classroom learning experience. “We’ll be working with a student for at least two or three weeks before a course begins to analyze their issues,” explains David Newkirk. “It means that on the first day of class we hit the ground running. In times like these we just can’t lose Monday morning.”

And that may be the most valuable lesson of all.

Do entrepreneurs really need a business-school education?

(article published in The Economist, October 2009)

Nature versus nurure

Among the thousands of business schools now operating around the world you would be hard-pressed to find one that doesn’t believe it can teach the skills of entrepreneurship. However, of the people who immediately spring to mind when one thinks of entrepreneurs – Bill Gates, Richard Branson or Oprah Winfrey, for example – few have done more than deliver a speech at a business school. Indeed, a recent study by King’s College in London has suggested what many intuitively suspect: that entrepreneurship may actually be in the blood – more to do with genes than classroom experience. All of which invites the question – does an entrepreneur really need a business-school education?

Not surprisingly some of the best-known schools in the field have a ready answer to this: they don’t actually profess to create entrepreneurs, rather they nurture innate ability. Or as Timothy Faley of the entrepreneurial institute at Michigan’s Ross School of Business puts it: “A good idea is not enough. You need to know how to transform a good idea into a good business.”

Schools do this in a number of ways. One is to ensure that faculty are a mix of classic academics and businesspeople with experience of setting up their own successful firms. They can also create “incubators” where students nurture ideas and rub shoulders on a day-to-day basis with the external business world, receiving both advice and hard cash in the form of investment.

Arguably such help is now more important than ever. The modern entrepreneur is faced with a more complex world than when Richard Branson began by selling records out of a phone box. According to Patrice Houdayer, head of one of Europe’s best-known entrepreneurship schools, EMLYON in France, new businesses used to move through a distinct series of growth steps—what he terms garage, local, national and international. Now however, thanks to the communications revolution, they can leapfrog these stages and go global more or less straightaway—encountering a whole new set of problems and challenges. In this context Professor Houdayer maintains that the increasingly diverse nature of MBA classes can help the nascent entrepreneur in three ways: by plugging them into an international network of contacts and advisors, by preparing them for the pitfalls and opportunities associated with dealing across different cultures and by exposing them to the different ways that business is conducted around the globe.

Better in than out?

Of course entrepreneurship, at least according to the business schools, has moved on in more than just its international aspect. The thinking now is that entrepreneurship is no longer just the province of the small, growing company, but should be applied and practised in organisations of every size. And, because every concept must have a name, this idea of the big company entrepreneur now has its own designation – intrapreneurship.

At first sight intrapreneurship looks like an excellent idea. Too many large organisations ossify once they reach a certain size and the creative spark that made them successful in the first place can all too easily be stifled by bureaucracy, conformity and an unwillingness to take risks. What better way to tackle this than to throw a few mavericks with fire and ambition into the corporate mix? Except, some decry, haven’t we just seen the results of letting mavericks have their own way at the levers of power? Creating such radically bright ideas as the sub-prime mortgage, for example, and playing fast and loose with the basic rules of risk management, and consequently plunging us into the worst economic crisis since the 1930s.

An interesting point say the schools, but for Veronique Bouchard, who teaches on the Global Entrepreneurship Programme at EMLYON, there’s a big difference between an entrepreneur and a “mad trader”. She argues that what is being advocated is not giving free rein to any reckless notion, but harnessing the innovative resources that will be present in every thriving business. That means creating an environment which encourages new ideas and approaches, but which also builds in checks and balances. By doing this an organisation will avoid the sort of anarchy that resulted in the last stages of the banking boom years. And it will also eliminate the “spend because it’s there” attitude that develops when individuals are afraid of abandoning redundant projects because they fear they will not be able to access funding again. The corollary of all this is that to be truly effective, schools should not just be educating intrapreneurs themselves. Perhaps even more importantly they also need to be educating the businesses which host them.

Turn on your iPod and learn

(article published in The Independent, October 2009)

If you ask a college student about the current favourites on their iPod, you might expect to hear of artists such as Lady Gaga, British Sea Power, or maybe even Michael Jackson for the newly nostalgic. Ask the same question on the campus of the Warwick Business School and you might be surprised when students remove their earphones to tell you that they are catching up on macroeconomics and analysis of the credit crisis, or that they are reviewing the latest thinking on creative management.

Warwick is among a number of pioneering institutions that are transferring their teaching from the lecture hall to the media player in your pocket. The courses and research material of the business school’s professors have found a new home in the iTunes University, a free education area within the Apple iTunes online music and video store. Warwick, Stanford, MIT, Oxford and University College London are signing up to provide mobile learning in the form of educational audio and video files, or podcasts, that will play on a computer, music player and now your phone. So students can study at their own pace, wherever and whenever they want.

Not only does this sit well with a millennial generation who have grown up with digital libraries and Wi-Fi hotspots, new research suggests that university students who learn by downloading a podcast lecture achieve significantly higher exam results than those who attend the lecture in person. Dr Dani McKinney, a psychologist at the State University of New York, led a study of two groups of students who were asked to listen to an introductory psychology lecture. One group attended the live class, the other listened via podcast. When given a test on the subject a week later, the podcast group scored 71 per cent while the in-class group scored 62 per cent. Within the podcast group, those who took notes and listened to the lecture more than once came away with an average test score of 77 per cent.

McKinney now intends to evaluate students over an entire term of lectures. In her research paper, on whether podcasts can replace professors, she sees a supporting role for such technology. “The results of this study are in no way an indication that audio copies of lectures could or should replace actual professors,” she says. However, the idea of following courses on your phone appeals to students. “The current generation of college student has never known a time before cell phones and personal computers. They are eager to use technology to enhance their learning.”

At France’s leading business school, HEC Paris, students are taking the idea of iPods in the classroom a step further, with what associate dean Valerie Gauthier describes as “technology in the pipeline that will set the standard for the use of quality education tools”. As part of an exclusive partnership with Apple, the school issues students with the latest iPod Touch loaded with dedicated browsing software and podcasts. They can then preview courses from a browser menu, and put together a personalised programme to review at their leisure. “Millennials are accustomed to receiving the exact information they want, when and where they want it,” says Gauthier. “The podcast of tutorials gives them all the information for review whenever they want.”

The technology also helps to minimise time-wasting questions. HEC professors have identified and pre-recorded responses to questions that are frequently raised in the classroom. “Making these answers available in podcast format outside the lecture or workshop is an enormously productive enhancement that focuses classroom discussion on case material. Technology makes the exchange between faculty and students even more productive and effective.”

So whether it’s marketing design or garden design, the blending of traditional and technology-driven learning tools can be applied from Paris to Penzance, or at least as far as the Cornish coast. University College Falmouth offers a growing portfolio of art, media and performance courses using online teaching materials. Their latest blended learning course is a Masters in garden design. In addition to residential study blocks in Cornwall and overseas, students will become part of a design community that is continually supported through a virtual studio, where they will be able to share in lively debate, test emerging designs with other students, tutors and practitioners through video links and web-based learning opportunities.

The school already offers a professional writing distance-learning course, and recognises that online education involves more than just putting lecture notes online. According to Falmouth’s director of the School of Media, Paul Inman: “Successful courses incorporate multiple teaching and technology tools, such as online workshops via a wiki, cyber discussion boards, web-enabled chat sessions, blogs or whiteboards. Use of well-planned interactive multimedia, audio and video also helps create greater student engagement.”

It’s up to you, then, to decide whether your next business presentation is going to be written in the local café or in the garden shed. Of course, no amount of technology will replace the fundamental need for great teachers, whose content and delivery can bring a subject alive. But the relationship between teacher and students is changing. As Valerie Gauthier says: “The dynamic classroom is leading to a dramatic shift in the dynamics of the teacher-student relationship. Collaborative, multidirectional learning is replacing top-down pedagogy.” But do you still need to bring an apple to class?

How Can Anyone Afford B-School Now?P

(article published in Forbes, September 2009)

In recent years a master of business administration degree has become a powerful accessory, if not an absolute essential, for anyone aiming to reach the top in the corporate world. It has also proven its worth in helping to break the monopoly of traditional establishment types in board rooms around the globe, as ambitious managers and professionals from developing nations have used the b-school experience to break through the traditional glass ceiling. But future international business leaders who want to go to business school today are typically not earning enough to be able to afford it, and borrowing the money for tuition has become paralyzingly difficult. Is the credit crunch threatening to stop up the talent pipeline?

Until major banks went from lending to practically anyone to lending to almost no one, prospective M.B.A.s had little difficulty financing their studies. As recently as last year, foreign students heading for a top business school in the U.S. could rely on the CitiAssist program for a loan of up to $150,000, without a U.S. co-signatory. Now, with Citigroup  shored up by government money, that program, along with the great majority of its counterparts, has gone the way of the dinosaur, and candidates from outside the U.S. are having a harder and harder time finding funding. (Homegrown students, though generally pinched, have far more loan options than foreigners.)

Several of the leading American schools have reacted quickly to try to address the fix international applicants are in. Harvard Business School and the University of Michigan, have created finance packages by partnering with credit unions; New York University and Chicago have turned to banks like JP Morgan Chase that were less badly hurt by the credit crisis than their competitors. Duke-Fuqua has gone a step beyond by putting its money where its mouth is. In an impressive display of faith in the long-term value of its M.B.A. program, Duke-Fuqua has agreed to underwrite overseas student loans itself and pay off any defaults that may arise.

However, while no one can accuse U.S. schools of failing to respond to the student credit crisis, their European counterparts have come up with the most innovative ways of funding tomorrow’s business leaders. Those innovative approaches are certainly needed: Research shows that 60% of potential applicants to schools on the continent are now experiencing financing problems. Keen to tackle that challenge, Insead, in France, and Vlerick Leuven Gent Management School, in Belgium, have adopted a radical new M.B.A. loan scheme devised by a British company, Prodigy Finance.

One of Prodigy’s founders, Cameron Stevens, had to struggle to finance his own M.B.A. He had worked extensively in the Far East, so he had no credit record with banks in his native South Africa, yet because he wasn’t a citizen of Malaysia, where his office was based, he couldn’t get a loan from local banks. Out of this double-bind grew the idea of turning the standard M.B.A. funding model on its head and allowing international candidates to obtain loans regardless of their background or nationality, based on their future earning potential rather than their financial history. Prodigy doesn’t rely on blind faith in the future earning power of business school graduates; rather it attempts to quantify it more scientifically with the use of a proprietary scorecard. The scorecard combines earnings statistics from past graduates with numbers for current and predicted economic circumstances such as geographical differences in pay and the need for particular skill sets, to gauge whether loans are safe. Over 35 nationalities were included in a pilot at Insead, and the scheme has so far generated more than $5 million in loans, with a 100% repayment rate.

For its next trick, Prodigy has come up with another new financing vehicle, a $70 million “community education bond” for Insead. The five-year bond is being sold to the school’s alumni and corporations it has relationships with, allowing them to help fund the next generation of students while earning a decent return. Insead will also be investing its own endowment in the issue, the first of the top schools to enter into such an arrangement. This call to alumni and partners to invest in their own community seems to be working. Prodigy’s challenge now is to expand it to other major institutions. Executives of the company say they are already in advanced talks with other top schools and their alumni groups.

Necessity is once again the mother of invention. These new ways to plug the M.B.A. funding gap left by the banking community may change the way students finance their business education for good. It’s possible that when the banks finally do decide they want to move back into business school student loans, they won’t find nearly as eager or appreciative an audience as they had before.

At Business School, Sustainability Takes Center Stage

(article published in BusinessWeek, September 2009)

Many MBA programs open with an inspirational speech from a well-heeled alum. These days green business evangelists are the hot ticket.

It’s that time again. Summer vacation is over, the sunscreen and swimsuits have been stashed, and a new school year at business school is underway. But what sort of welcome can the eager new entrants to top MBA programs expect in such ‘interesting’ economic times?

Throughout the boom years, when a stint at a major business school was more or less a guarantee of a high paying job in banking or consultancy, most new students kicked off the year with an inaugural address from one of the great and good of the business world. These addresses, which tended to focus on ‘how I did it and how much I made in the process’, were usually delivered by an alum of the school and served both as an inspiration and a confirmation that the tuition fees they had just paid were well worth the money.

This year, however, an altogether different type of individual has started to replace the senior bankers and corporate CEOs of the past. Now we’re seeing individuals take the stand who are there to deliver a much softer, more socially friendly message to the potential business leaders of the future. New students at Georgetown, for example, have heard from Michael Dupee of the fair-trade pioneers, Green Mountain Coffee, whilst their counterparts at Boston University got the head of marketing from Stonyfield Farms, a company which gives as much as 10% of its profits to environmental projects. At one of Europe’s leading schools, HEC Paris, the MBA program went even further by commissioning the environmental campaigner, Yann Arthus Bertrand, to deliver an address which had less to say about business per se and more about how responsible leadership could allow the class to play their part in saving the planet.

However, whilst all of this is undoubtedly laudable, a cynic might ask how deeply schools (and their students) really believe in the value of social responsibility and ask whether better economic times might see the return of the ‘usual suspects’ and a focus on making large amounts of cash by any legal means.

So let me declare where I stand on this. Having worked in, and commentated on, the business education sector for nearly two decades I’ve seen more than a few fads come and go (anyone remember the much touted, then fast disappearing, e-commerce courses of dotcoms days?). But I don’t believe that this trend towards social responsibility is one of them. Why? First because corporate social responsibility isn’t just a ‘nice to have’ or good PR these days, it actually makes good business sense. Organizations can’t get away with polluting on a grand scale, abusing workers in developing countries or flout the basis rules of risk management. Of course a few recalcitrants may still try, but legislation, the revolution in communications, and public opinion are increasingly combining to put a stop to such practices. And many successful companies have also found that building sustainable business models isn’t just about winning awards and looking like one of the good guys, it can also save resources and consequently money in the long run.

Second, and equally important to the argument, is the fact that many of the top business schools haven’t just jumped on the social responsibility bandwagon since the collapse of Lehman Brothers, they’ve actually been vocal supporters of it for quite some time. Take for example the student ethics oath at Harvard that has been attracting so much attention of late. Yes, that particular initiative may have stemmed directly from the credit crunch (and the embarrassingly large number of HBS alumni involved in it), but a similar ‘hippocratic oath’ was proposed several years ago by the current president of the Thunderbird school, Angel Cabrera.

And back at HEC Paris, France’s energy and environment minister, Jean-Louis Borloo  recently indicated that what had inspired him were the ideas he picked up in the school’s MBA class as long ago as 1976. If HEC and its peers really were getting the message as far back as the seventies that’s not so much jumping on a bandwagon as building it from the wheels up.