A new model of delivering high quality management education in the developing world

Ok - so we have the top tier global business schools and the top tier regional business schools almost every where in the world. However, consider two specific markets where the need for management education has never been higher than before - and the supply of cost effective and research led management education is almost negligible. The two markets are India and almost every country in Africa (South Africa being an exception).

If one looks at these two markets carefully, one would notice absence of high class MBA schools - though India certainly has reputed pre-experience management programs (such as IIMs & XLRI) and also few top class MBA programs (eg ISB / MDI / SP Jain etc). However, considering the market size/ growth / potential etc, it is amazing that the global MBA industry has not tapped into the market yet to provide management education in these markets that can compete with the best in the world. By contrast, mainland China has close to 200 MBA schools - with at least 10 of them being world-class for local requirements. Thus, the demand for high quality management education far outstrips the supply in these regions.

My theory is there are two inter-related reasons for this gap: a) Top class schools require very good faculty which does not currently exist locally in these markets and b) Importing the faculty drives up the cost that translates itself into higher program fees, making the programs unaffordable.

We can learn from the two developing markets in the respective regions to find a solution - China has focussed primarily on part time management education and government subsidies. While government subsidies may not be the answer in India / Africa, high quality part time management education could be. Additionally, business schools in China as well as South Africa have built very close relationships with the industry that directly & indirectly subsidizes the education.

My future model of providing high quality and low cost management education in India / Africa is as follows:

a) Focus on executive MBA program delivery with program duration of 2-3 years (ie the program is delivered in modules - during the modules, the students attend the program on full time basis)

b) Aggregation of faculty time across various top schools world wide to teach on part time basis - Imagine a marketing professor from Harvard being able to teach on an Indian program for 2 hours per month, and charging only for his time (including preparation time) accordingly.

c) Reduce the travel requirement of the professor through use of technology (eg web conference to deliver the session / use of open source technologies to manage assignments etc) while getting the students together in a clas room for the session. It is a well documented fact that the value of an MBA is as much because of the peer group interaction and thus, this ensures that the students get face time with each other (only the professor delivers the sesion remotely).

d) Use local professors - again on part time basis - to provide region specific inputs into the class room learning.

e) Work with local corporates to provide technology infrastructure & facilities (eg conference rooms to be used as class rooms in the evenings/ week-ends when the delivery happens). This also allows the corporates to feed inputs into the program. Moreover, since the program delivery is part time, this ensures that the demands on corporate infrastructure are not unmanageable.

f) Ensure global standards of admission into the programs to ensure program quality. Most of the top programs - while having great program experience & faculty - also have great students to begin with.

g) Solid program management - an independent third party will almost run the whole program over its duration of 2-3 years to cover faculty & student recruitment, management of logistics like accomodation / technology/ class rooms etc during the actual delivery, management of student interactions with the faculty / corporates etc.

I am influenced by the recent thinking at MNCs and busines schools who advocate that 'Quality' is defined regionally and dictated by local requirements. Thus, if the above model can provide 50% of the quality of real global programs like Harvard - at 10% of the cost - to emerging regions that require them, then as far as I am concerned, the industry and the academic institutions have taken a great leap forward to improve access to those who need it most.

Does a great MBA teacher have to be a great researcher?

Following on from my earlier blog on why MBA programs are so expensive, some of my colleagues from B schools in Europe informed me that a significant portion of the cost is the cost of faculty & research. In short, great MBA programs require great researchers, who can translate the research into great class room teachings. This costs money and therefore, makes the program expensive. Therefore, good programs (that have great researchers as teachers) are expensive (and presumably not so good programs are not so expensive!!)

However, if I look around the world - and in particular towards Asia & Africa where the cost of an MBA degree is still relatively low compared to the US / Europe, I notice two things:

a) Not all good / great MBA programs have great researchers teaching on them - of course, it is difficult to define what a 'good/ great' program is and therefore, I will take the populist view of rankings to define 'good/great' MBA program. These programs have average to good researchers - but not great by global standards. What they are great at is in translating existing research from around the world into learning modules that make practical sense to the MBA participants. In addition, a second component that these programs have is a rigorous selection process for candidates which ensures that only those who are academically the brightest and display top level of professional 'potential' are admitted. In fact, many of these good/great programs face the accusation that they simply polish the gold to make it brighter (and do not really convert copper to gold).

b) The researchers on the programs focus on the practice of management. In other words, their research is focussed on solving real world problems using existing body of knowledge created by someone else - rarely do these researchers focus on creating a completely new body of knowledge.

Considering that very few MBAs eventually become researchers / academics - most tend to become managers / practitioners, the obvious question in my mind is - do these programs really need top researchers? Can we not reduce the cost of the programs by engaging average to good researchers - and training them to be great teachers of management practice - while leaving the job of creating knowledge to specialist researchers? Such a split may also have an unintended benefit in the long term viz. the program delivery could leverage new trends in technology & outsourcing to reduce costs further without impacing the quality.

Why are MBA programs so expensive?

During my recent presentations to MBA hopefuls looking to apply to the UK B schools, one applicant asked me why the MBA programs were so expensive and whether there was a 'cost plus' reason for it. I was stumped - I had always assumed that the MBA programs were expensive because the applicants were willing to pay higher fees for this elite course. The question got me thinking - I went back to find out if business schools published their annual financial performance for public consumption and whether the financials provided any indication of why MBA programs charged such high course fees. Imagine my suprise when I could not find any financial data for any business school to assess if the higher fees for the programs are dictated by higher costs. I can only assume that MBA programs are expensive because they employ high caliber faculty (leading to higher costs), are required to provide significant non academic support to the students / alumni (careers / life long learning etc) resulting in higher program costs and not simply because the market is willing to pay a premium.

Think about this from a recruiter perspective - my dispstick research with some of the UK employers indicate that they are not happy with the quality of 'future leaders' these programs are producing - enough outside research is available to show that the recruiters feel MBAs lack the soft skills required to succeed in the business (team empathy / conflict resolution / ability to work under ambiguity etc).

Perhaps the answer is a standardized predictive test for MBA students that predicts on the job success of freshly minted MBAs for a period of 5 years after acquiring the degree. Recruiters could then ask the students to take these standardized tests to assess their future performance on the job. Schools could ask the students to take these tests before & after the program to judge the amount of 'value add' provided by the MBA -the quantum of 'value add' could be a good barometer to decide the amount of fee premium a school could charge for its program.

Any takers?