THE MODERN MBA
It is fashionable in business circles to talk about the unprecedented and dramatic pace of change these days. The world is changing, we say, more dramatically and faster than ever before, businesses are more complex and the challenges facing business leaders are greater than ever.
No one can argue that change is all around us, but neither should we assume that this is somehow a new phenomenon. Organisations have always had to respond to change and to deal with complexity in some form.
Challenges have always existed, they simply change over time and, granted, some of today’s challenges are significant. What are these challenges and what do the current trends in business mean for people development and talent management at the senior level in organisations?
There is certainly a sense of insecurity in corporations about the future both in terms of the economy and business development. Large corporations in mature markets are struggling to grow. Fierce price competition from Asia (particularly China) is driving margins down and this is certain to continue.
Innovation and entrepreneurship are required in this new climate – the traditional business models and text book responses are unlikely to have an impact.
Chief Executive positions are not so desirable – it’s a high risk job and there has been a trend in CEO firings in recent years - in fact the average term for a CEO in the US today is said to be less than five years.
Chief Executives, aware of the pressure to deliver results or to face dismissal, are necessarily focused on short term targets just to stay in post. At the same time, talented professionals are being snapped up by competitors offering higher salaries and significant opportunities for development and promotion.
Against this backdrop – insecurity at the top, new competition, globalization and the war for talent, companies are looking for support from business schools to deliver management education that meets their needs and provides them with the people and skills to address the challenges.
What role does the MBA play in helping employers select, develop and retain top talent? It is acknowledged by most successful businesses that training on the job and in-house development programmes are not sufficient to guarantee the complex mix of skills and knowledge required at the top.
Such businesses demand senior level people who possess a high standard of business education, combined with relevant experience and management skills developed in a practical context.
The modern MBA, still recognized as the leading international business qualification, is enjoying something of a renaissance to meet this demand.
The qualification, now over 100 years old, has stood the test of time because of its ability to evolve and adapt, to keep pace with the needs of business and to maintain its relevance and value to individuals and their employers.
The MBA is positioned as a post-experience qualification and this is its key strength when compared to other educational programmes. MBA students are expected and encouraged to bring different work experiences to the course, to share them and apply them to different business contexts.
The course offers a powerful mix of structured learning and the practical application of knowledge and skills. For employers of MBAs, this is the most compelling feature of the qualification.
Higher education provision is expanding rapidly and new high growth markets for the MBA are emerging in China and India where there has been a recent explosion in the growth of business schools. A range of MBA programmes is on offer across the world, catering for a diverse and well-informed student market.
Today’s MBA students are in a position to demand value for money, greater variety, more flexibility, and a quality education which is recognised and valued by employers.
In this highly competitive market, business schools are striving for differentiation, focusing on their strengths and areas of expertise to distinguish their programmes from the standard formats.
At the same time innovation in design, delivery and marketing is an important activity for business schools who are exploiting technology for the purposes of teaching, communication and the provision of additional services to customers.
There is also a move towards international alliances between higher education institutions. These arrangements help to strengthen a business school’s appeal, to share world class faculty, to raise the school’s global profile and to provide a truly global experience for students.
Of course in this climate the pressure on business schools to achieve standards of excellence in programme content and delivery is intense.
There is little doubt that the survival of business schools and their MBA programmes will depend ultimately on the quality of their offerings and their outputs – and this is what accreditation by the Association of MBAs aims to ensure.
Accreditation is the in depth and rigorous validation of MBA programmes by a panel of independent experts. The process involves the external scrutiny of faculty, curriculum, assessment standards and student services.
Those who meet the Association’s standards (and many don’t) are awarded accreditation for a period of up to five years, after which time the process of inspection, review and validation is repeated. Accreditation is not to be confused with rankings.
Rankings and league tables of schools and programmes, published by the media, will give an indication of the relative positioning of certain institutions.
However, rankings do not represent the range of offerings from business schools; they are based on specific business school activities and rely on information submitted by the schools themselves.
Rankings do not compare with the in-depth process of accreditation. It is therefore essential to check that any business school you are considering is accredited by the Association of MBAs.
The MBA has changed and so have MBA students. The stereotypical 28 year old male studying a two year full-time MBA before going into consultancy no longer represents the norm.
In general, MBA students are in their 30s, more experienced and working in a variety of roles across all employment sectors. And the full-time MBA programme, whilst still popular, is no longer regarded as standard.
In fact perhaps the most significant trend in recent years is the introduction of more flexible learning options. Part-time MBA programmes and ‘blended learning’ (involving a mix of face-to-face interaction and online learning) are on the increase.
Many of these programmes are accredited by the Association of MBAs and meet the same high standards as the traditional full-time course.
Coverage of all the core business functions continues to be fundamental to the MBA – a sound knowledge of accounting and finance, marketing, operations, human resources and strategy is crucial. But these subjects are increasingly presented in an integrated way and in a global context.
A series of electives, delivered in addition to the core modules, will allow students to specialise according to their own interests or chosen career path.
Electives will include subjects such as mergers and acquisitions, international finance and e-business. Leadership development (including communication, people skills, entrepreneurship and ethics) is becoming a key part of the programme.
And additional language skills – rather than an optional extra – are likely to become a requirement for more MBAs in the future. So the focus of the modern MBA is on developing leaders in a global business environment – not teaching people to be operational managers.
The challenges for businesses are many and the search is on for people at the top who can provide leadership, direction and innovation in the face of risk and uncertainty. The MBA, delivered by the world’s best business schools, continues to provide the solution.
Jeanette Purcell, Chief Executive, The Association of MBAs