MBA Programs Are Going Back to School
As he prepares to take over this summer as dean of Duke University's Fuqua School of Business, Douglas T. Breeden has taken to reflecting on his own B-school days. By the time he graduated from Stanford University's Graduate School of Business with a PhD and launched Smith Breeden Associates Inc., a money management company, he was armed with the basics, from a business plan to a laundry list of contacts. But as his business grew, running it got harder. He wasn't sure how to structure the company as he added people, or how to inspire staff. Breeden found himself wishing he had gotten more out of those organizational behavior classes. "At the time I took them, they didn't make sense to me, they didn't apply," he recalls. "But 10 years later, I needed them."
That insight led to an idea Breeden will push at Fuqua: lifelong learning. Since MBAs can't possibly absorb everything in a two-year program, they need an institution that will keep teaching them well into their careers. Though Fuqua already has seminars for alums, Breeden wants to make such programs a staple there. "Things are changing at such a rapid pace that if you don't continue to study, you'll fall behind," he says.
As part of a new crop of deans taking the helm at top B-schools across the country, Breeden and his colleagues are beginning to experiment with the venerated MBA program. Some are tapping into their executive programs for ways to keep alums coming back for more. Others are ratcheting up the use of online material to make more time for apprenticeship-type work and issues like ethics and public policy. Some are expanding more overseas, while alliances like the one under discussion by Harvard Business School and Stanford Graduate School of Business, which may merge their executive education programs (BW--Apr. 30), are catching on. The efforts all come as the deans face a growing chorus of criticism that has them questioning whether management education is keeping up in a rapid-fire business environment.
FEELING THE HEAT. They're under increasing pressure to find the answers. Companies have begun complaining that MBAs, while well-informed, often lack the experience and judgment needed in an unpredictable environment. Meanwhile, university officials are keeping B-schools tethered to traditional notions of scholarship. Add to that growing competition from e-learning outfits and some new programs abroad, particularly in Canada, where B-schools are shaking off tradition, and America's B-schools find themselves at a crossroads. "The model has to change," says Donald P. Jacobs, who will soon retire after 25 years as dean at Northwestern's Kellogg Graduate School of Business.
Feeling the heat, a handful of schools like Kellogg and Fuqua are figuring out that lifelong learning for MBA grads not only fills a need but also fosters alumni loyalty--not to mention revenues. "The concept that in your two years here we cram everything you need to know into your head is crazy," says Patrick T. Harker, dean of the University of Pennsylvania's Wharton School since 1999. Wharton and several other B-schools want to retool their fancy finishing-school models and try bringing alums back to campus regularly for mini-courses. They would be similar to those already offered to execs but designed just for their alums.
HERE TO STAY. That doesn't mean the two-year MBA is going away. Rather, the concept is to give students the basics, such as finance and marketing, plus a healthier dose of nonbusiness subjects during their time on campus. Classroom time would be split between the need-to-knows and squishier things, such as leadership and global awareness. Apprenticeships or consulting work would add to real-world knowhow. Then grads would be brought back later for what they need along the way, such as organizational management and senior-level decision making--a kind of "midair refueling," says B. Joseph White, outgoing dean of the University of Michigan Business School.
To do that, schools will likely turn to their executive education departments, which have a long history of teaching midcareer execs and managers but haven't usually served their own MBA alums. With many schools boasting an alumni base of tens of thousands, partnerships like the one between Harvard and Stanford will be key.
If learning continues over the course of an entire career, then the MBA program itself could put more emphasis on a broader approach to business. "None of us is very good at teaching the context of business," admits outgoing Fuqua Dean Rex D. Adams. Adams' attempt to provide context has been to champion global topics, creating an MBA earned with class time on several continents. That was a hit with multinationals, which generally haven't been happy with U.S.-centric MBA grads. "People are coming out of good business schools who don't understand the international issues they're going to deal with from day one," says Rhonda Germany, a vice-president in Booz, Allen & Hamilton Inc.'s Chicago office. So B-schools are beginning to send faculty to study business abroad. University of Virginia's Darden Graduate School of Business wants students, too, to work and not just study overseas.
Seeing the value of real-life experience, B-schools are also starting to push their students out of the ivory tower nearer to campus, too. "Students can make the right analysis, but how to implement that analysis takes much more worldly experience," says Jim Beirne, director of MBA recruiting at General Mills Inc. (GIS ) Arizona State University's College of Business, for instance, sends teams of students to consult with local businesses under the watchful eye of a faculty member. One recent project: helping a large utility figure out its capital costs and strategy under deregulation. At Wharton, students learn about leadership by attending a Marine Corps boot camp led by military instructors. For a taste of problems outside the suit-and-tie set, Wharton students spend a weekend fixing houses in poor neighborhoods.
Another missing ingredient: subjects such as ethics, the environment, and public policy. B-schools mostly have relegated those topics to unpopular electives or a few words in a case-study discussion, something corporate recruiters have begun to grumble about. "A lot of students still perceive ethics as an altruistic, moralistic approach instead of as a tool," says David Gebler, president and founder of Working Values Group Ltd., a Boston-based consulting firm that specializes in business ethics. But nowadays, a number of schools are trying to incorporate these things into nearly every course.
Putting more mundane coursework online is one way B-schools are making time for innovations. For example, placing those last two problem sets from a finance course online could mean 20 extra minutes for meatier issues. Some schools are also requiring that students do online coursework the summer before they start their MBA program.
None of these changes has yet taken hold industrywide; academic institutions are slow to evolve. Consider that the last big B-school trend--teamwork instead of the old sharp-elbows approach--came 20-odd years ago. But B-schools face a continuing erosion unless they adapt. That means they'll have to act more like the successful businesses they teach about--or end up like the ones they criticize as missing the boat.
By Jennifer Merritt in New York