The MBA: Relevance Lost

Hult International Business School in Boston recently released the results of a survey asking business leaders about the current state of MBA education. Read the summary report here and the full report here.

I am skeptical of what business leaders say they want from graduates for reasons cited in previous blog posts. Remarkably, as self-proclaimed practical business people they present a theoretical, ideal state that is far removed from a practical future state. And they expect others (business school professors) to close the large gap that they create, which is unlikely to happen.

Business leaders said these are the critical skills that are most valuable (in order of most frequently mentioned):

  1. Self-Awareness
  2. Integrity
  3. Cross-Cultural Competency
  4. Team Skills
  5. Critical Thinking
  6. Communication
  7. Comfort with Ambiguity and Uncertainty
  8. Creativity
  9. Execution
  10. Sales

That sounds to me like business leaders are telling themselves (and the good folks at Hult) what they want to hear. Naturally, business leaders also want business schools to measure students’ abilities on these 10 criteria, apparently still believing that what gets measured gets managed, as well as give constant and consistent feedback – which most employers do very poorly.

In practice, the growth imperative (“grow or die”) that top executives fully conform to drives aggressive EPS (earnings per share) targets, double-digit CAGRs (compound annual growth rates) for sales, and improvements in free cash flow that harm suppliers (extending payment terms) and employees (deferral of 401(k) contributions), etc. This suggests that the order of the list should actually be:

  1. Sales
  2. Execution
  3. Creativity
  4. Communication
  5. Cross-Cultural Competency
  6. Team Skills
  7. Comfort with Ambiguity and Uncertainty
  8. Integrity
  9. Critical Thinking
  10. Self-awareness

The quotes from business leaders that stood out most to me are:

  • “They need to be able to cram 20 minutes of info into five minutes, and focus the room’s attention on the core information.”

Eliminating details from the conversations undercuts Critical Thinking. Wide swaths of relevant information must be ignored when interacting with business leaders, which undercuts Communication and Integrity.

  • “I need people who can change and improve things, not people who can sit around and apply models all day long.”

The skill set of graduates reflects the skill set of faculty. To change that, business schools need to hire faculty that have real-world experience in process improvement as well as appropriate academic credentials. This will help MBA education achieve a better balance between theory and practice. This would support Creativity, Communication, Execution, and Comfort with Ambiguity and Uncertainty.

  • “Business students need to understand what it means to be a 21st century leader. They need social awareness and the ability to build relationships.”

When has the need social awareness and the ability to build relationships not been the case? This seems to be a clear admission by the business leader that he has no idea what it means to be a 21st century leader. This reflects poor Communication and Critical Thinking.

  • “[Graduates] can do slides and business planning and analysis, but they don’t engage enough in the real world with real issues and real opportunities.”

Whose fault is that?

Finally, the proposed changes to Hult’s MBA curriculum, based on this feedback, are less than impressive.

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