OPINION: The preferred skill set of potential leaders is evolving, just as the needs of business itself are evolving – and the challenge to leading business schools is to adapt and develop existing programs while remaining true to our role and purpose in servicing leadership education needs.
It is interesting to observe the changes currently under way within master of business administration programs at many leading international business schools. Notable shifts are occurring on two fronts – the developing needs of business and the community and the level of demand from potential MBA students.
In addition, an increasing number of substitute education alternatives continue to emerge. And of course, there are many different types of MBA programs now available.
As a consequence, the role and purpose of MBA programs are under scrutiny from several perspectives. Many business schools are redesigning their MBA products to service a more segmented market and a more sophisticated consumer. And, for the vast majority of business schools, this is occurring within an economic environment that requires more done with less.
Recent studies by Harvard Business School have identified several unmet needs as identified by business – including development of critical thinking skills, an improved understanding of risk and markets, the development of a global perspective and a heightened awareness of the role and responsibility of business in society. Each of these examples represents a broad area of knowledge that complements an underlying base in core disciplines such as finance, marketing and economics.
In order to address these unmet needs within MBA programs, business schools are faced with two significant challenges: how to include additional learning within an already full curriculum; and how to meet these requirements within existing constraints on financial and human resources.
The use of integrated learning and experiential learning courses (comprising a multidisciplinary approach to problems and projects) can help with the curriculum challenge, but invariably these types of courses are resource intensive and relatively more costly to deliver.
In any event, after allowance for necessary courses that address the core disciplines, it is unlikely that the remaining capacity within the MBA program is sufficient to meet all of the unmet needs.
But addressing the interests of business must also be considered within the context of addressing the interests of potential students. Although these requirements arguably converge, evidenced by likely job prospects being a key factor when incoming students select a preferred business school, there are many alternative paths available for talented executives seeking to enhance their careers.
The traditional MBA is now just one of several MBA alternatives. Shortened versions service a market characterised by time-poor executives seeking to progress their studies while holding full-time jobs.
Shortened versions must, by definition, have a reduced curriculum. To some extent this compromise can be offset by prior education and extensive professional experience. But it is difficult for a short course to adequately address the significant benefits that arise from learning reflection, cohort experience and network engagement – all typically associated with comprehensive MBA programs.
And potential students can also consider a variety of MBA substitutes in the form of specialised postgraduate programs and in-house training programs.
The abovementioned study by Harvard Business School also identified a change in the demand for MBA programs from 2000 to 2011. Enrolment at the leading US business schools remains stable – but at other US business schools there appears to be a shift from full-time to part-time programs and, post-GFC, there are indications that the demand for part-time programs has also weakened.
While it is not possible to present a definitive explanation for these changes, it is reasonable to argue that some factors are transitory (such as employment prospects linked with the economy) and others more lasting (the changing needs of business and the rise of substitute education programs).
But the aggregation of data obscures some outstanding success stories at several business schools that, against the trend, have grown their MBA programs. These schools acted early to innovate with a focus on developing a niche within the broader MBA landscape.
The leadership needs of our local market differ, of course, to those offshore. But there are valuable lessons and precedents available to us from offshore markets.
And, in some aspects (such as global perspective) Australia is ahead of the knowledge curve. We see increased international diversity within our cohorts and many of our graduates secure employment with firms active in global markets.
Meeting the leadership needs of the regional market, within a global context, must be the primary focus.
Just as business responds to changes in markets and products, so too must business schools in servicing the educational development needs of the leaders of the future.
Professor Mark Stewart is the Academic Director of MBA programs at the Australian Graduate School of Management.
This opinion piece first appeared in the Australian Financial Review.