Are MBAs becoming irrelevant?

by Idris Mootee

Are business schools preparing students for a flat world where organizations and national boundaries are becoming blurred?

Looking at this year MBA rankings by Financial Times, there aren't many changes in the Top 10 list. The surprise is that #10 is a Hong Kong Business School and #12 is an Indian Business School. Other top schools (some are more local) in the rankings: IMD (Swiss) ranks 15, HEC (French) ranks 18, CEIBS (Chinese) ranks 22, Haas (American) ranks 28, Cornell (American) ranks 38, Ivey (Canadian) ranks 49. Here's the latest FT Global Top 10 MBA Rankings for 2010:

1. London Business School
   
2. University of Pennsylvania: Wharton
   
3. Harvard Business School
   
4. Stanford University GSB
   
5. Insead
   
6. Columbia Business School
   
7. IE Business School
   
8. MIT: Sloan School of Management
   
9. University of Chicago: Booth
   
10. Hong Kong UST Business School

There are a lot of criticisms around MBA programs on different fronts. I was advising some folks that this is still the best all round business education. The last three months, I have written 4 recommendations for some folks. One was accepted by London Business School, one by Stanford Business School, one by Chicago Graduate School of Business and one by MIT Sloan. I am happy for all of them. I still think it is one of best paths to change the world.

There are arguments around whether it needs to be two years and almost all European MBAs are one year with only exception of LBS. The traditional two-year MBA curriculum, grounded in the core functional disciplines — strategy, marketing, organizational behavior, accounting, finance etc. — has been in existence since it was first pioneered in the US in the late 50s. MBAs were very much an American thing. US companies placed more value in an MBA than European companies. In the UK, a general management program combined with solid work experience is generally accepted to be sufficient.

The world of business is on the verge of transformation, a transformation, and so should business education. Where technological advance, geo-political forces, rapid globalization are all putting pressure on the business education system. I attended an event a while back at the Yale School of Management; there were 20 education institutions from around the world all struggling with the relevance of the MBA to 21st century organizations. Everyone sees the need for transformation but not many knows what and how to transform. Asking any B-school's Dean the question how their business schools must change to better prepare our students for the challenges that they will face in a hyper competitive and uncertain world is a good start.

Yes the world is flat. Organizations are becoming increasingly flat, and social technologies are blurring the boundaries of a corporation. Leaders of modern enterprises competing in the global economy need to look for truly global managers who are capable of leading and managing across the boundaries of function, geography, and organizations and industries. Are business schools ready for this? Or should we change the old paradigm that an MBA is an elitist qualification which can enable the holder of the degree to fast-track his/her career to power and fortune? An MBA should mean less as a qualification. It is a sense of empowerment and commitment for an individual to take on big challenges, transform oneself and create win/win strategy for shareholder, employees and societies.

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Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Creative Capitalism + Social Innovation

New Social Enterprises That Make Money and Change the World

by Idris Mootee

We need more (and more innovative) social enterprises and I really want to see a top tier MBA programs with specialization in Social Enterprises. Call it B-school needs S-school. There are so many problems out there and sometimes we feel we are almost giving up. Our capitalist system is not adjusting well to these shocks. It is almost pointless for these endless debates on how things got to this point and who is to blame. The point remains: We've got to change it - and change it fast - and change it for the better.

The last thing we want to replace these problems with a set of newer problems, I've seen in many case when smart people think they have a solution, but they are simply migrating the problems. There is hope. The good surprise is that business - the same institutions that bear a fair amount of the responsibility for the current situation - is also the most potent force for bringing change. No government alone can make that happen. Businesses are powerful, if we can align the forces. There are hundreds of social enterprises are doing exactly that.

Who invented the social enterprise? Or the better idea is how do we reinvent social enterprises so they can be good business and good citizens. Not good business and bad citizens or bad business good citizens. Peter Drucker argued that in this post-capitalist society (not sure I agree with that tern), managers must learn to negotiate a new environment with a different set of work rules and career expectations. Businesses exist to serve social purposes, they have to function in ways that make sense to the society in which they are situated - and in the case of multinational corporations, they often have to function in ways that make sense across more than one society, at a deep level.

Social enterprises can change the world for the much, much better. If social entrepreneurs can navigate around the challenges and become some of the most popular brands of the world. For now, they need to improve the odds and make sure that they can proof that it works. I am very convinced that the concept works, it is just exceptional challenges that needed to be overcome. Some realities. I don't know the success rate of social enterprises. I don't think it is higher or lower than the average business. Like any business, social enterprises fail - because businesses fail. But how come social enterprise didn't scale - like many other businesses with successful business models?

The way I see it, it is not uncommon that traditional social enterprises did not attract the best and the brightest entrepreneurs, many are into the mission and not interested in the business. The other reason is there is a lack of appetite or aspiration for them to take it global or to a larger scale. And then there is the question of capital availability and time frame to achieve scale. Too many are forced to think survival, rather than innovation and growth. There needs to be series ambitions to make sure the social enterprises is leverage its mission and commitment to changing the world and transform our future. That's a big mission. And it is not mutually exclusive to pursue the mission and not ignoring the competitive dynamics of the industry that you operate in. What's the best example? Here is one.

Rubicon Programs is a $16mm social enterprise in SF focusing on helping with employment. It started initially as a drop-in center in Richmond, California, for very low-income people with severe disabilities. Their first social enterprises were very small programs that were seen more providing with some training than anything else. Today Rubicon has evolved into an organization that today serves low-income, homeless and mentally disabled people in the businesses, housing and services it provides. About one-third of the people currently served have a mental health disability, so its original focus is still a part, but not the largest part, of what Rubicon does. It is a one-stop shop for those trying to escape poverty. It not only helps clients find homes and jobs but also offers career, mental heath, and family counseling, as well as technological training and money-management programs.

Take Rubicom Bakery as an example, they produce a range of delicious cakes and tarts. The high-quality and handcrafted products are baked from "scratch" recipes and use only the best of ingredients including fresh-grated carrots, Maine blueberries, real butter and Dutch chocolate. We use absolutely no preservatives and our products include no transfats. The bakery also serves as a unique training center, preparing people for employment with Rubicon or other employers. Job training, counseling, and peer support provided in a dedicated baking workshop, classroom with audio-visual capacities, and a job search center with computer terminals help participants develop their work and life skills. Everything integrated, almost like the Cornell School of Hotel Management. There is even an online store too.

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Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

When it comes to innovation, trust your intuition

by Paul Sloane

MBA students are taught to treat business in a rational, scientific way. They analyze situations, develop financial models, critically examine management decisions and logically examine different scenarios. When they emerge from the hallowed halls of academia, they are often surprised to find that businesses run much less on logic and much more on emotion. It is not cold, intelligent analysis that drives most organizations forward. Emotional energy is often the real engine behind successful people and organisations.

Sure it helps to be analytical, intelligent and rational - but what makes people like Richard Branson, Bill Gates or Steve Jobs great business leaders is not their undoubted intelligence but their passion and commitment to their cause.

One of the richest men in Britain is Felix Dennis, who made his fortune in publishing. In 1971 he was jailed for publishing an obscene political cartoon but he was acquitted on appeal. His success started with Kung-Fu Monthly in 1974. In the 1980s he published a string of successful computer magazines. His publishing empire now spans IT, motoring, gambling and men's magazines. A recent innovation was The Week - a brief summary of all the best articles from the press each week. In his book, "How to Get Rich", he describes how he ignores conventional wisdom and sound advice from his directors, lawyers and accountants. He goes with his gut instincts instead. Time and again he trusted his intuition in making tough business decisions about innovative ventures.

Luc Mayrand, Concept Designer at Disney says, "If you find your logic is talking you out of a good idea, question the logic first, then question the idea. This is entertainment; logic is less important than the impact of the story and design."

There are many famous examples where eminent people used logic and analysis to trash an innovative idea which subsequently succeeded. Western Union turned down the telephone because they saw no need for people to chat to one another. IBM turned down Xerography when it was offered to them by its inventor Chester Carlson. Decca Records turned down the Beatles and so on.

Logic and analysis can always find fault with innovative ideas. Use these tools but use them warily. If your intuition tells you that you have a great idea then pursue it a little while longer.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Innovation Internships

Business schools and companies need to create more internships dedicated to innovation. Most MBA internships continue to focus on traditional core functions like marketing, finance, and strategy. A few schools have innovation internships, but they focus on the technical and design points-of-view. The mainstream, non-technical B-School programs are missing an opportunity.

Innovation internships are a great way to infuse an organization with innovation process and techniques. The best internships allow the intern to learn from the company and the company to learn from the intern. The key success factors are: Selection, Sponsorship, and Structure.

• Selection means picking the right student for the internship as well as picking the right company. Not all students or companies are suitable for this type of program. The intern needs to have advanced innovation training. This should include both innovation method training as well as organizational aspects of innovation. The sponsoring company needs to have a commitment to innovation and see it as a competency worth developing.


• Sponsorship of the intern is essential. Without resources, focus, networking, and guidance from an engaged sponsor, the intern will flounder. Sponsors need to work closely with business school faculty to make sure the program is set up correctly, and that the intern is brought on board smoothly and effectively. Good sponsors keep projects on track.


• Structuring the internship around the needs of the business as well as the needs of the intern is the final piece of the puzzle. Interns need to tackle relevant and difficult innovation problems within the business if they are to learn from the experience and create value for the company.

Here is an outstanding example of how to structure an innovation internship and select candidates for the position, from Sears:

POSITION SUMMARY

• Our vision is to attract highly talented people to Sears Holdings and develop them into our future leaders


• Candidates will report directly to a Senior Executive


• Position will provide unique career development opportunities and exposure to the day-to-day issues and decision-making processes of senior management


• Successful candidates will be presented with the rare ability to shape the future of a Fortune 50 company and will be empowered to create value across Sears Holdings

QUALIFICATIONS

• Cross Functional Team Building Skills: Ability to build and align cross functional teams to meet common goals and achieve success


• Champion of Change: Has a solutions oriented mind-set and works to initiate and drive needed change


• Entrepreneurial: energetic and innovative; can lead new initiatives from idea generation to execution, develop business models, drive action plans to completion, and report results and learnings


• Analytical: must enjoy gathering and digging deeply into data to identify issues and solve problems


• Strong work ethic: self-starter able to demonstrate strong proactive approach and self-initiative; tenacious


• Positive attitude: commitment to self-improvement and excellence
  Strong business acumen: strong financial, strategic, operational and leadership skills; ability to understand business models and key drivers quickly


• Communication and interpersonal skills: confidence to interact with senior management and maturity to succeed through teamwork; willingness to learn from and coach others; ability to build strong relationships both internally and externally


• Organizational skills: ability to manage projects and work effectively under tight deadlines


• Focused on results: willingness to do what it takes to get the job done right

RESPONSIBILITIES

• Develop close partnership with senior executives to help them fulfill their existing responsibilities as well as develop and define their future priorities


• Champion innovation projects and lead new ideas from inception to execution


• Serve as organizational change agents

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Drew Boyd is Director of Marketing Mastery for Johnson & Johnson (Ethicon Endo-Surgery division). He is also Visiting Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-Marketing program. Follow him at www.innovationinpractice.com and at http://twitter.com/drewboyd