Top business school alumni were in charge at some of the most calamity-stricken organisations as the recession took hold. So are we due for a big rethink on what business courses actually teach? Ian Wylie reports.
Finding scapegoats for the recession has been easy - like shooting fish in a barrel. With discredited CEOs such as Dick Fuld of Lehman Brothers, Andy Hornby of HBOS and Rick Wagoner of General Motors all sporting MBAs from top business schools on their CV, critics have plenty of ammunition to condemn MBA programmes as partly to blame for the financial crisis.
In truth, we are probably too quick to give MBAs praise and credit in the good times and too eager to slam them for the hangover once the party has ended. But with the lustre of their most prestigious business degree tarnishing, business schools need to take action.
Some contributing factors schools may be powerless to change. Why is it, for example, that ambitious managers choose to enrol on an MBA programmme in the first place? Yes, they may be seeking to broaden and deepen their business knowledge. But no candidate is blind to the fact - often cited by business schools - that after just one or two years of sweat, study and group-work, gaining an MBA offers an attractive payback on their five-figure investment. Some go for the cheaper, lower-risk option of studying part-time, perhaps with the support of their employer. But others quit their job altogether in favour of the more expensive, but potentially higher-return, full-time MBA at a top-ranked school.
So don't be surprised when we watch those same MBAs seek to satisfy an inherent appetite for risk and reward on the higher rungs of the corporate ladder. And it would be naive to believe that investment banks and hedge funds have hired MBAs just for the knowledge they gleaned at business school. Many employers want MBAs on their top team for the drive, focus and willingness to make big sacrifices in pursuit of success that they demonstrated by gaining the qualification.
There may not be much that business schools can do to alter this, though they might stop trumpeting the salary-boost aspect. But they should bear the self-selection bias in mind when deciding what to teach these students, particularly on the matter of good leadership.
'In too many cases, business schools simply turn out better-educated bad leaders,' laments Chris Roebuck, former global head of talent at Swiss bank UBS and now a visiting professor of leadership at Cass Business School, London. 'There has been an attempt to boost the leadership skills of those doing MBAs, but it hasn't reached a level that makes a significant difference. The time constraints are so great on MBA courses that it's hard to make it happen.'
According to Roebuck and others, the traditional business school curriculum equips MBA students with many technical skills, but does little or nothing to instruct them in the 'softer' leadership skills that would send them back into the business world with a greater sense of responsibility and accountability. After all, in the run-up to the financial crisis, wasn't it logical, analytical thinking that pursued opportunity and expansion at all cost, when intuition and instinct were urging caution?
'People want leaders who can do the job and who care about them,' says Roebuck. 'The armed forces have known this for years, hence their focus on creating a system that is not only effective in delivery but also creates a culture where leaders inspire, motivate and build trust. I am amazed by the number of senior leaders who, when asked about the best boss they have ever had, are able to quickly come up with behaviours that focus on the personal aspects of leadership, not the process. For a nation that turned out Nelson and Churchill, we really should know better.'
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