On the eve of putting BUSINESS WEEK's recent biennial business-school rankings to bed, we invited deans from five of the nation's top B-schools to New York to discuss the biggest challenges facing MBA programs today. In a roundtable discussion that appeared on BUSINESS WEEK Online, Senior Writer John A. Byrne spoke with Meyer Feldberg from Columbia Business School; Robert J. Swieringa of Cornell's Johnson Graduate School of Management; Edward A. Snyder from University of Virginia's Darden Graduate School of Business Administration; B. Joseph White from the University of Michigan Business School; and Donald P. Jacobs from Northwestern University's Kellogg Graduate School of Management. Here is an edited transcript of the highlights:
Many schools have had slight declines in applications lately. Some people have attributed this to the fact that people are postponing their plans for graduate education, opting out to join startups or to start their own companies. How is this affecting what you folks do, both in terms of recruiting students as well as your own curriculums?
Still, isn't the entrepreneurial activity that's siphoning off applications affecting the curriculum? Many of your schools have added e-commerce courses, and there's even a partnership among Darden, Haas [U.C. Berkeley], and Michigan. Tell me how you're changing your curriculums to address these demands.WHITE: The biggest change over the last 20 years lies in the professional interests of our students. If the median dream of a Michigan MBA student 20 or 25 years ago was to be CEO of Ford Motor Co., today the dream is to start a business, have an ownership stake, or create economic value for themselves and others. In school, they want to understand how to write business plans, how to get financing, and how to manage a growing enterprise. They don't just want to hear about it from the faculty, they want hands-on experience.
Have your schools been adapting quickly enough to the changing demands of your students and their future employers?SNYDER: We have an older profile for MBA students than we did when I started, back in 1982. So the [salaries] these students, or would-be students, are giving up are a lot higher now. Our average is 4.6 years of work experience. That means we got people six, eight, ten years into their careers. Are we really positioning this right?
WHITE: We know there are some people out there in society for whom a top business education would be an enormous help, and we're not serving them well enough. Women is one group. On average--there are a few exceptions--at top business schools, 25%-30% of the class is made up of women. Meanwhile, women are streaming into law school, streaming into medical school, and streaming into entrepreneurship.
Why is that?WHITE: Business schools haven't reached out and made themselves very attractive to women as a career path, compared with other professions, such as law and medicine. I don't think we're getting the word out to women that business is a path to economic independence. We've done a poor job in marketing to them.
There are a couple other groups: Hispanics and African Americans. I think we've made tremendous strides in the U.S. in civil rights, which is basically a legal issue. What's the next challenge? It's an economic empowerment issue. Top MBA programs are a gateway to economic opportunity and to privilege and responsibility. I am sure that none of us is satisfied with the representation of African American students or Hispanic students or Native American students in our program.
We are underserving important parts of our society, people who would really benefit from a top MBA education. And looking over the next few years, we ought to work individually and together to bring this opportunity to more people who would benefit from it.
JACOBS: The truth is, there are things we can do that we haven't done. As we increase the work experience required to get in, the fact of the matter is we are hitting, if you will, a time when women are likely to be starting families. If we wanted to really get women in larger numbers, we would reduce the work-experience requirement.
As corporations express greater need, won't the schools respond in time?JACOBS: The corporate sector has been at us for a long time, we don't have a shortage of funds. The issue is, we always end up saying we want to do better.
A lot of those funds are used for scholarships. Do you see a dramatic difference between those who have them and those who don't?JACOBS: A lot of our students will take a job in consulting and work their butts off for two to three years just to pay off their debts. So we're biasing their career choices.
SWIERINGA: We have an experiment at the Johnson School because we have these Park Leadership Fellows, which is a full fellowship plus a stipend from the Park Foundation. The students do look at a broader set of choices, because they are not saddled with that debt. And the same thing happens in the entrepreneurial areas, where we have some forgiveness types of arrangements when they go into a startup. In those cases, we see them changing their behavior at the margins. I see it in terms of what choices they're making, because they are not saddled with that level of debt.
Declines in applications. More people doing their own companies. What do you say to the traditional recruiters of MBAs, who are your most important supporters out there, when the available pool of talent is shrinking and top company recruiters come and get turned down?WHITE: Can I tell you what we say? "Make your company a more attractive place to work for." Bottom line is, if your company is not an exciting place to work--where students can achieve their dreams--they're not going to work for you.
What are your biggest worries about the future right now?FELDBERG: I worry about half a generation of people who have not been through a recession or even a plateau. I'm not quite sure that there is enough resilience out there to deal with a significant downturn.
JACOBS: I was talking with a donor who was telling me that what he was really concerned about--not only Kellogg students, but all MBAs--was that they're excessively optimistic.
WHITE: Well, I have another worry: ensuring the development of an excellent faculty. A great faculty attracts a great student body. It's an unbelievable challenge to be an excellent, high-performing faculty member at a top business school. You have to be a very strong scholar. You have to understand the world of practice. You have to be able to speak to multiple audiences, and you have to have mastery in the classroom. The issue, therefore, is attracting outstanding people into business-school doctoral programs.
SNYDER: I'm worried about the Internet. This is a case where you have to catch the wave. You have to be part of a learning system. This isn't just faculty going out and developing new models and then teaching students.
That's an interesting issue. How will the Internet change what you do?FELDBERG: The Internet will probably be the single most democratizing force in education. You really will be able to take the intellectual property that scholars have created and built up over decades and centuries. You will be able to transform that intellectual property and digitize it and take it through the Internet, to not thousands or hundreds of thousands or millions, but tens of millions, or hundreds of millions of people. And it doesn't eliminate, it simply complements and supplements, the conventional classroom method and model.
SWIERINGA: Today, we can teach [data] modeling courses live over the Net. We pull the data in and build [model] portfolios through a point-and-click technology. You do all of this right in Sage Hall in Ithaca, N.Y. You don't have to be in New York City to do some of these things. But what's happening is, there's a coming together of the research and the teaching in a very dynamic way.
How has your relationship changed with the companies that look to you to produce top-notch managers?SWIERINGA: There are many instances--we're involved in one right now--where corporations want to build a partnership. But not the partnerships that we talked about in the past. They want us to become a driver of what they do inside the company.
SNYDER: It's a capital partnership. It's a roll-up-the-sleeves-and-get-results type of partnership. That's where [nondegree] executive education is going to be more and more important to MBA programs. To stay current, I think executive education is really going to be important in business schools.
WHITE: It's hard for younger people to understand that this thing we're talking about, management education, is just 100 years old. Now, we are in the early stages of what is really going to be a golden century for management education in which customers are huge beneficiaries of what's going to happen. We'll see new offerings, new aggregation [of programs]. We assemble talent, we educate, we do professional development, we do career counseling. The demand for what we do is going to be huge in this century. And I think because of new competition, which is healthy, and because of technology, and because of global reach, people around the world are going to get what they need, which is the knowledge and the professional skills to really make these market economies work.
For the full video version of the Deans' discussion, go to www.businessweek.com/bschools/