Weak Relationships With Industry Hurts MBAs
The MBA degree needs a makeover. It was created for a world that no longer exists. From the admissions process to the teaching method, developing content, updating the alumni, there are so many possibilities.
The MBA degree was created for a different world. It was the mid-sixties when having an MBA first began to catch the imagination of the middle class aspirants. It was the guarantee of a good life. But that was also when the average tenure of companies on the S&P 500 was 33 years. By 1990, organization’s lifespans had shrunk to 20 years.
By 2026 the lifespan of a company would be down to 14 years.About 50 percent of the S&P 500 will be replaced over the next 10 years. Already yesterday’s aspirational employers like US Steel, Dell, and the New York Times have been replaced by Facebook, Under Armor and Netflix. The employers that the B-School students want to work for has changed.
Disciplines like Human Resources and Marketing have been turned upside down by new legal frameworks, policies, technologies, societal shifts and demographics. The only way to keep the MBA relevant is to bring the outside wall in to the classroom. That is not about inviting a executive to talk to students about how smart hey are or how cool their company is.
Meanwhile in the Business Schools…
The employers have to rely on shortcuts to decide which degree best prepares someone for a career in business. The MBA program was the perfect answer. XLRI – India's oldest business management school was founded in 1949. IIM Calcutta was the first of the IIMs to be set up in 1961. Ahmedabad, Bangalore and Calcutta were the three cities which had IIMs. As industries flourished, so did the B-Schools.The two years of business education shot up the worth of any graduate in the job market. Employers could not hire enough of the MBAs. The B Schools started to “ration” out the MBAs. The students would choose which firms would be given the Day One status to come to offer jobs to the graduating MBAs. Soon a pecking order would emerge in the early nineties. It was the Big 4 consulting companies or the Investment Banks that would get the pick of the lot. Heads of HR would declare achieving Day 1 status on Campus as their biggest achievement. The students got more ambitious. Some campus offered Day Zero a day before Day One for campus placements.There just were not enough B-Schools that stamped the three magical alphabets - MBA on to eager students. There are at least 5,500 B-schools in the country in 2016. The entrance examination became so skewed in favor of analytical thinking that 99% of the MBAs in most B-schools were Engineers (some B-Schools do admit students with a more diverse background). There was only one problem.
The MBA program is still teaching students to draw still life whereas the world outside is moving at 24 frames per second. It is time to transform the MBA offering.
The world is changing – rapidly
The curriculum of the B-Schools has remained painfully slow to adapt. While some professors do have prior work experience, it is hard to stay current without engaging deeply with the industry. The industry-academic link has to be an active one. The professors have to run several consulting projects where they can involve the students.The Assocham report finds only 7% of the MBAs employable.
The B & C category B-schools are doing the industry and the students disservice. Around 220 B-schools have shut down in 2014-15 years in Delhi-NCR (National Capital Region), Mumbai, Kolkata, Bangalore, Ahmedabad, Lucknow, Hyderabad, Dehradun etc. and at least 120 more closed shop in 2016. “Barring a handful of top Business schools like the government run IIMs and other few, most of 5,500 B schools in the country are producing sub-par graduates who are largely un-employable resulting in these pass-outs earning less than Rs 10,000 a month, if at all they find placements.”, says the report.
“The market forces are telling people that the B-Schools are having their Kodak Moment”
5 Changes in B-Schools
Here are some changes I would suggest.
Admission process: In a global world where a lot of work gets done in virtual teams, being able to communicate and influence others is a large part of the job. Screening stringently for language skills is a good start. It is important to screen people who are terrific at writing. There is too much focus on the spoken part of communication and not enough on listening and writing.
Professors: Every professor will not make a great industry consultant. Every practicing manager does not make a great professor. Creating a buddy system between industry practitioners and academics will help in skill transfer. Think of open talent systems. Invite experiences managers to share the challenges and problems they are trying to solve. Let the students and professors jointly interview managers from other industries to describe how they are solving such an issue. That lets people understand problems that are generic to the industry and those that are specific to the organisation’s leadership choices. Then invite those with 2-3 years of post MBA experience to work with students to create content that brings out the teachable moments creatively.
Soft skills: Most of the rule based work will get rapidly automated. The B-Schools have to prepare the students to succeed in a world where the Knowledge Worker has to become a Relationship Worker. Amazon has a job for Alexa (its voice controlled AI based system). It is called Lead Alexa Personality Writer. There must be a disproportionate exposure to students on how to navigate complex choices and decisions with diverse groups - often with strongly held opposing beliefs. To do this, the admission process must increase the students from Humanities, Law, Architecture, design etc. The admission tests today are so quant-heavy that people from Humanities, Literature etc can never clear the examination. That creates a homogeneous classroom where everyone “logicaly” solves every problem. The real world is anything but that.
Interdisciplinary teaching: The professors zealously guard their academic silos. The professor teaching Human Resources cannot teach digital tech or finance or strategy. It would be seen as stepping into someone else’s territory. The world outside is totally interdisciplinary. The finance professional has to understand the implications of the salary hikes on morale and retention. Google has teams of coders and anthropologists and psychologists working together to create products that are adopted better. Time for academics to go boundaryless. Every Professor must work with one faculty member and students to develop the curriculum and teaching material for a different discipline. It will give them a great lens to understand how students learn the subject. An “outsider” can understand problems and solutions the insiders are blind to.
Continuous Learning: The shelf life of a degree used to be five years according to the Deloitte shift index. It is closer to 3 years today. The MBA program should become more like a license that must be renewed after 3 years based on a rigorous examination that must be designed by practitioners across industries. The team that designs the examination must work with the professors to update the curriculum. The alumni network can be leveraged for this. That could mean that the MBA program works more like a vaccination. There is a single shot followed by a booster dose.
When we buy a car, we have no problem in going to the petrol pump when the tank goes dry. We have to have the same mindset when it comes to business education. We have to rethink the MBA offering. It needs to be updated for the current upended world of business. It must stand for what it claims to be – Master of Business Administration and not Mediocre But Arrogant.
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This article appeared in the November 2017 issue of People Matters. It was updated on 15 May 2021.
It was titled The MBA Degree Needs a Makeover