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?

Why do institutions of higher education have complicated and confusing organizational structures?

Last week I visited a business school in the UK. Out of courtsey, one of the senior faculty at the school showed me around - and we started discussing the way the school was organized. The faculty proudly informed me that the school was part of a bigger university and was responsbile for teaching management & law. The head of the school reported to someone at the university. The management part of the school was lead by a dean and it further split into four 'departments' - each one responsible for conducting resaerch into its own area and thus, buidling horizontal centres of excellence. Once such department was 'Strategy'.

The various programs run by the school of management are treated as a vertical stream, cutting through all the four horizontal 'centres of excellence'. Each program is owned by one of the four departments - the MBA program was owned by the department of strategy. The academic program director , responsible for development & delivery of MBA curriculum, was a faculty researcher within the department of strategy and reported to the HoD (head of department). One of his key areas of responsibility was to pull in lectures and researchers from the other three 'centres of excellence' within the school of management to deliver MBA curriculum. Any subject which was not researched within one of these four departments had to be resourced from the other part of the school (ie the school of law) or indeed from other schools in the university (eg psychology).

By this time, I was reasonably dizzy trying to visualize the predicament of poor MBA students who were ambitious enough to be wanting to study MBA electives for which the faculty needed to be resourced from different parts of the organization. I was further informed that the budget for academic programs needed to be apportioned to these various 'contributors' from various parts of the organizations - each one with their own priorities. Thus, some researchers, who did not form a direct part of the 'department of strategy' within the 'management part' of the 'school of management & law' were more interested in researching and /or teaching masters students, rather than teaching MBAs. However, the MBA program could not afford a dedicated tutor in this area as the class size of students is small (about 50) compared to the overall school size (close to 1000).

I had assumed that since the primary job of an academic institution is to teach its students, the MBA program would not have problems sourcing faculty from different parts of the organizations. Obviously, despite having spent some considerable time in the field of post graduate management education, I was naive enough to harbour such assumptions. Something else suddenly struck me - if this is the confusion around core curriculum, how about other activities that are so important to an MBA ie career services and alumni services. Here again, I was educated on the fact that since MBAs form only a miniscule part of the 'school of management & law' (and indeed for the whole university), no one within the school of management was sure about whose areas of responsbilities were these - a central office served to fulfil the needs of everyone in the school of management & law and the MBAs would be served through that office.

This raises the following questions in my mind:

a) Why are the educational institutions structured in such complexity?
b) What happens to 'customer centricity' in such complex organizations - while many institutions may debate on whether students should be considered & treated as 'customers', most would agree that they are certainly one of the most important stakeholders. If that is the case, why is the structure not defined keeping in mind the student needs?
c) Who takes the decision in such complexity - in my experience, no one does! And this is one of the reasons why the decision making process at B schools takes forever.

Job search for MBA students - impact of economic crisis

During my visits to various business schools in the UK/Western Europe and talks with/to MBA students, I am constantly amazed by the naivity they display towards securing a job after completion of their MBA program. While the MBA is supposed to make these students a manager/leader of business, they do not seem to take the same rigorous approach in managing their job search and careers. This seems to be especially true of international students viz students who enrol on an MBA program in the UK/Europe, but who have no past experience (work or otherwise) in these countries.

While these students will engage in applying rigorous tools and methodologies in solving a complex business problem, they adopt a very simplistic approach when looking for a job. This simplistic approach can be summed up as 'I have paid huge money to get into this MBA program and the school will automatically find me a job that I want'.

Even during the best of boom years, the above approach worked only for the very top elite schools who had established corporate contacts that would conduct campus placements. Over the past few years, even these elite schools encourage their students to do their own job search as campus visits by recruiters have started declining for a variety of reasons. For the rest of the B schools, campus placement was not a serious option even during the best of times. These schools have small MBA class size and large non-MBA programs, thereby, making the investments in MBA careers services an impossible option. In the current scenario, campus placement for such B schools is unthinkable, especially if the school has no careers services department for MBAs. Despite these home truths, the MBA students at these schools act as if a job offer is to be expected in the same post as the MBA program admissions offer.

My message to such students is simple but blunt - no B school has ever guaranteed a job to its students. Own job search by students (where students look for jobs on their own with some advice/support from school career services and alumni) has always been a primary way of finding jobs after MBA and if anything, this will only increase in the future. The students, especially from smaller B schools, therefore, need to develop separate skills, and more importantly, positive attitude, for managing own job searches while still studying on the program. My work with B schools in the UK focusses on training current students (and especially international students) in this area but the students will only be doing themselves a favour by acknowledging this bitter truth. A change in attitude is urgently required if the proportion of MBA students landing a job within 3 months of completion of the program is to go up.

Responsible management by MBAs

Over the last few months, I have been horrified by the amount of adverse publicity MBAs have received for supposedly playing a major role in bringing the world to its current state of economic downturn. Apparently the MBA education is primary reason why the world has come to standstill - the MBA curriculum focusses excessively on analytical skills at the cost of value based management, it encourages greed and finally, it does not train MBAs in critical thinking/risk analysis. There has been enough debate - in favour of as well as against MBA education.

In my view, however, far less debate has taken place on the concept of responsible management within corporations - I am not talking about reponsible management at the board level, or even responsible management by the organization as an 'entity' - CSR initiatives have seen to it that organizations as an entity and the board act in responsbile fashion - atleast in public. I am talking about responsible management at micro-level ie the level of a middle manager in a large organization, who may or may not hold an MBA degree and who form the backbone of any large industrial or services entity.

If business schools are taking flak for not teaching 'responsible management', should the corporations not take the same amount of flak for not promoting 'responsible management'? This would mean the human resources, training & development and indeed the entire performance management at middle level should take responsibility for churning out CEOs and board members that we see today - after all, if the argument is what is taught in the MBA class room has significant impact on how an individual behaves 10-20 years later as CEO, then surely what the individual learns as a middle manager in an organization should have far greater impact on how he behaves as a CEO.

To me, responsible management encompasses just three parameters - responsibility towards environment, responsibility towards the local society that the individual operates in and finally, shunning a behaviour of excessive personal greed. I also differentiate between the behaviour of a corporation and the behaviour of individuals within that organization. Till we generate a healthy debate on how we measure the performance of an organization in encouraging & promoting responsible management at an individual level, we will continue to have individuals who will abuse their position. While this does not relieve business schools of their own responsibility, the act of measuring responsibility does not just stop with the business schools.

Perhaps a starting point could be a 'Responsible management' accreditation that the organizations have to submit to - just the way most of the leading business schools in the world submit to. Over time, this accreditation could distinguish responsible corporations from the others - by defining & identifying how their micro-units (ie individuals) behave, and hopefully will allow such corporations to be more competitive in attracting and retaining talent, while meeting the needs of their shareholders.

Is Global education market ripe for IT consolidation

Having spent number of years in global IT outsourcing industry and having helped clients consolidate their IT operations, I had always wondered why the Education sector - which commands one of the largest percentage of global GDP spend - accounts for such little share of customers for IT vendors. Now that I have been spending time with the decision makers in the sector for the last year or so, I have an inkling of why.

Unlike private sector, the education sector has no incentive to streamline IT operations - the sector is mostly run by academics who do not see IT as core part of 'running a business' - in fact, many academics do not even consider their operations a 'business'. On top of it, since most of the establihments are either owned by the government or chartibale trusts, there is no shareholder pressure (unlike in private sector) to bring in efficiencies and economies of scale.

The result? An unwieldy set of operations where each establishment repeats exactly the same set of processes - across customer segments and countries, with no focus, incentive or 'management' inclination to make things better and efficient, despite the tax holders indierctly paying for such inefficiencies all over the world. Thus, the concepts of outsourcing, shared services and common business processes are unheard of.

Will things change - probably, though I supect they may change more as establishments get privatized or as they compete more with private sector education provider. However, in the short term, I do not see governments or academicians doing much to drive efficiencies in the sector.