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.
Tuesday, 16 June 2009
Wednesday, 17 December 2008
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.
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.
Tuesday, 9 December 2008
Do MBAs add value to oraganization?
I believe that it is only a matter of time before organizations conclude that the traditional MBAs of today, who are very well suited to managing at the middle level, singularly fail to perform at the highest level in a competitive world.
I believe that while MBAs have thrived over the last century, it was mostly because management was coming of age. Organizations were still siloed in functional departments. Even today, the middle management in organizations is fairly siloed, though the technological advances of last couple of decades, combined with the changing demographics of the work force, have blurred such distinction. At senior level, the organizations never were, and are unlikely to be siloed. It is the compartmentalization of the organization which enabled the MBAs to function properly, through applications of management frameworks and models taught in the classroom.
It has been my experience, being an MBA myself, and having hired MBAs over the last few years, that MBAs live by frameworks and models that allow them to parameterize any given situation to arrive at possible conclusions. Siloed organizations and middle management responsibilities are perfectly well suited to apply any number of frameworks and models learnt at business schools. However, as the silos dissolve, or as MBAs are forced to think & act as CEO of large organization, the frameworks which were so effective till yesterday, suddenly lose their potence.
Consider the following.
As senior management of any organization (large or small, private or public), one needs to be effective in the following five areas. I believe the framework and methodology mind set of MBAs fail them spectacularly when they apply the business school principles to most (if not all) of the following:
a) Understanding of human behaviour and conflict resolution: Perhaps the most spectacular failure of MBA teaching is in this area, be it in dealing with internal employees, external stakeholders or social awareness groups such as environmentalists.
b) Decision making process involving scenario setting, risk assessment and stakeholder management – The framework methodology lends itself well to solving problems on this dimension, but without adequate understanding of human behaviour, the stakeholder management falls flat, resulting in any number of boardroom coups that we hear about.
c) Innovation and strategy: Consultants have made fortune consulting with clients in this area. Since the consultants are mostly MBAs, we are forced to conclude that MBAs are good on this dimension as they rise to senior management positions in organizations.
d) Maturity: In my opinion, this is another area where traditional, ‘framework’ based MBA teaching fails to develop responsible CEOs. To me, maturity is being aware of fine balance between authority, and the responsibility which comes with such authority. Over the last ten years, the corporate world has been awash with misuse of authority at senior levels, many of whom were MBAs from Ivy league schools.
e) Execution ability – In the corporate world, the word ‘execution’ tends to get misquoted as often as the word ‘Strategy’. My definition of execution involves strong project management abilities, most important of which is an eye for critical detail – the operative word here is ‘critical’. The ability to separate critical from non-critical, and having hands on management of critical activities is again something which is missed in the frameworks driven, advisor world of MBAs.
I believe that we need to generate a discussion about these things to get them right. I hope that through my blogs, I can keep the discussion going on this subject, and learn from such discussions.
I believe that while MBAs have thrived over the last century, it was mostly because management was coming of age. Organizations were still siloed in functional departments. Even today, the middle management in organizations is fairly siloed, though the technological advances of last couple of decades, combined with the changing demographics of the work force, have blurred such distinction. At senior level, the organizations never were, and are unlikely to be siloed. It is the compartmentalization of the organization which enabled the MBAs to function properly, through applications of management frameworks and models taught in the classroom.
It has been my experience, being an MBA myself, and having hired MBAs over the last few years, that MBAs live by frameworks and models that allow them to parameterize any given situation to arrive at possible conclusions. Siloed organizations and middle management responsibilities are perfectly well suited to apply any number of frameworks and models learnt at business schools. However, as the silos dissolve, or as MBAs are forced to think & act as CEO of large organization, the frameworks which were so effective till yesterday, suddenly lose their potence.
Consider the following.
As senior management of any organization (large or small, private or public), one needs to be effective in the following five areas. I believe the framework and methodology mind set of MBAs fail them spectacularly when they apply the business school principles to most (if not all) of the following:
a) Understanding of human behaviour and conflict resolution: Perhaps the most spectacular failure of MBA teaching is in this area, be it in dealing with internal employees, external stakeholders or social awareness groups such as environmentalists.
b) Decision making process involving scenario setting, risk assessment and stakeholder management – The framework methodology lends itself well to solving problems on this dimension, but without adequate understanding of human behaviour, the stakeholder management falls flat, resulting in any number of boardroom coups that we hear about.
c) Innovation and strategy: Consultants have made fortune consulting with clients in this area. Since the consultants are mostly MBAs, we are forced to conclude that MBAs are good on this dimension as they rise to senior management positions in organizations.
d) Maturity: In my opinion, this is another area where traditional, ‘framework’ based MBA teaching fails to develop responsible CEOs. To me, maturity is being aware of fine balance between authority, and the responsibility which comes with such authority. Over the last ten years, the corporate world has been awash with misuse of authority at senior levels, many of whom were MBAs from Ivy league schools.
e) Execution ability – In the corporate world, the word ‘execution’ tends to get misquoted as often as the word ‘Strategy’. My definition of execution involves strong project management abilities, most important of which is an eye for critical detail – the operative word here is ‘critical’. The ability to separate critical from non-critical, and having hands on management of critical activities is again something which is missed in the frameworks driven, advisor world of MBAs.
I believe that we need to generate a discussion about these things to get them right. I hope that through my blogs, I can keep the discussion going on this subject, and learn from such discussions.
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