A few weeks back I was conducting a routine admissions interview for a prospective applicant to my alma-mater business school. All seemed on track until near the end, when the candidate lobbed an interesting question back at me. "What do you think is the future of the MBA in the next 5-10 years and how do you think an applicant like me should prepare to manage the change that might come?"
I must confess I was a little thrown off. It was a question that I had not seen coming and it was certainly not one that got discussed in detail during my time at business school. It took me a few seconds to come up with an intelligent response and the interview wrapped up soon after, but the thought stayed with me for longer.
[T]he degree itself has proved to be resilient over the last century or so as formal business education evolved.
So, where is the MBA really headed? My instinctive response to the question was, "I hope it doesn't go away anywhere soon! I just graduated last year and need to pay back a lot in student loans!" Facetiousness aside, the degree itself has proved to be resilient over the last century or so as formal business education evolved.
The three waves of MBA programs
During my time at Kellogg, I had put together a session on the history of the school. The research for that session revealed a fascinating trend of how MBA programs had evolved since the early 1900s. Started primarily to school an early set of business managers in skills of accountancy, the programs kept pace with the evolution in the markets outside. Finance and economics courses were gradually added. Followed the big post-war changes in the 1960s, and as the global economy expanded, the program evolved further. The professional class of managers was now learning soft skills around leading teams, broadening its expertise through subjects such as marketing and operations while also deepening knowledge of how businesses make money and how financial markets operate.
Not only are the classrooms (and the study content) more global but they are also beginning to be reflective of social composition at large.
The third wave, starting in the new millennium, is where the MBA has truly gone global. International student intake in a school like Harvard was at 20% at the turn of the century. Now, that number is nearly double for almost all top 10 US programs. Not only are the classrooms (and the study content) more global but they are also beginning to be reflective of social composition at large. The share of women in the classroom reached the highest mark for some schools this year.
Despite global economic headwinds, the MBA enthusiasm seems strong. The Graduate Management Admissions Council (GMAC) which tracks admissions data for over 100 MBA programs globally, in its most recent study cites more than 50% of schools reporting an increase in admission applications. The race to get into the leading US MBA schools stays competitive with an acceptance rate of 16% on a base of over 50,000 applications.
The real reasons why MBA programs are so valuable
The story though lies beyond the numbers. Despite scepticism from some corners that an MBA may be over-rated, my experience, both pre and post business school, often revealed why the market craves branded managers. It isn't as much as the stamp of the degree on your CV or the doors that it opens but what incremental value time at the school adds for its graduates. I see two clear trends that will keep the degree going for the near future.
[T]he opportunity of working with team-mates from different continents, grappling with problems with a different cultural frame and still being able to make mistakes... is only provided in a truly global MBA.
Firstly, businesses are more complex, global and closely enmeshed with local cultures than ever before. We are way beyond the 'global is local' jargon of a decade ago. We live in a time where one small cultural folly can set off a social media storm that can singe prospects in a region. Not only are ideas being transferred across borders but so are personnel and their skills. The average corporate worker today spends more time working in multi-cultural and geographically spread teams than ever before. By the time this generation makes its way into the periphery of the C-suite, it will no longer be leading homogenized teams and most likely will be called upon to work for a significant period of time in geographies different from their place of origin. The only incubatory environment that can prepare you to adapt to such situations is a business school with its composite classroom and multiple activities which demand students to cross barriers and engage with those form a diverse background. Yes, a student may choose consciously to avoid immersion but the opportunity of travelling to different parts of the world, working with team-mates from different continents, grappling with problems with a different cultural frame and still being able to make mistakes and learn from them is only provided in a truly global MBA. My sense is that businesses do not articulate this openly as of now but are beginning to realize the value than an empathetic and culturally aware manager brings to their operations.
What does not get outdated is the ability to break down problems, to isolate choices and communicate them in a structured and simplified manner.
The second aspect is about speaking to power with authority. In my opinion, there is a glaring inability in most business organizations to take complex facts and ideas and distil them into a simple structured problem with trade-offs that can enable a high-level executive to take decisions. It is a skill that I have often found as a distinguishing facet in those who have been successful in the firms I have worked with and the clients I have served. Hard skills often have an expiry date to them and new skills can pass a generation by--just ask the Class of 2006 how much they studied about Big Data and analytics. What does not get outdated is the ability to break down problems, to isolate choices and communicate them in a structured and simplified manner. I do not argue that every MBA graduate gets blessed with this gift but I also do not find any other mechanism where this skill can be consciously honed across a range of subjects in a short period of time.
Like any other variable, business schools will also be subject to cyclical variations in the economy but it is the finishing touch that they offer for aspiring global professionals that will keep them relevant, keep the recruiters coming and grow the application pool. Too often I find prospective applicants solely career focused when they talk about going to business school. Yes, there is a career to be had but there are many other facets of the personality that can be stress-tested and improved during an MBA. It is the students discovering those who will keep the MBA going strong in the future.
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