Now there’s a sense that the worst is past. After a bout of internal reform that saw, for example, the Yale School of Management unveil an entirely new curriculum last year, the numbers are back up. In the United States, B-school applications and enrollments are rising again, according to an industry survey released this month. Worldwide, corporate demand for new M.B.A.s has risen healthily this year (by 24 percent) for the first time since 2002. So have the salaries paid to newly hired M.B.A.s, which have increased by an average 7.5 percent, according to a survey by TopMBA.com of 445 companies, also released this month. “It’s been a very strong recovery, with particularly high demand in consulting and financial services,” says Nunzio Quacquarelli, editor of TopMBA.com.
In general, the reform movement has been about bringing the B-school course of study out of the academic weeds and back into the real world. The standard M.B.A. curriculum emerged in the wake of the Ford Foundation’s 1959 report “Higher Education for Business,” which laid the outlines for a research-based business education. Since most managers spent their careers in one field, whether finance or marketing, teaching focused on specific skills. Business professors, wanting their discipline to be taken as serious “science” by academic peers, focused on narrow, quantitative courses. The result was ever-more specialized M.B.A.s entering a market that increasingly asked them for flexibility, innovation and an ability to work across cultures and disciplines. “There was a major disconnect between what they were taught and trained for, and what they were asked to do by recruiters,” says Podolny.
As B-schools were all competing to be more rigorously quantitative, they were also increasingly alike. None had a truly unique brand, even if they all taught the importance of branding. The result was what Frank Brown, incoming dean at INSEAD, the top business school in Europe, calls “the commoditization of the M.B.A.” Not only was there little differentiation among the top 12 schools, but they generally did a poor job “delivering value.” And that complaint still resonates: “I’ve spoken to Wall Street CEOs who ask, ‘Why should we worry about hiring M.B.A.s–what exactly is it getting us?’” says Brown. “The M.B.A. used to be a credential, a requirement for being a senior manager or a CFO. Now it’s nice to have, but people are beginning to ask what it really does for them.” Brown aims to make INSEAD a training ground for “leaders,” not specialists, and many of his peers make similar noises. Yale’s new curriculum breaks down traditional boundaries between disciplines–for example, by focusing marketing courses not on the nuts and bolts of how to calculate a new product’s “value proposition,” but on how to understand consumers using economics, psychology and sociology.
Business schools have had to change with painful speed. “We’ve really had to hustle,” admits Janet Shaner, director of M.B.A. marketing at IMD in Lausanne, Switzerland, which has retooled to focus on leadership qualities and international experience. The school has arranged “discovery trips”–last year to Bosnia, this year to Argentina–exposing students to leadership challenges in new environment. IMD also offers a personal-development elective, where a psychologist helps students understand how to lead from their strengths.
One can see where this may be headed: too much generalization, followed by criticism of B-schools as too soft, followed by a return to harder business “science.” The trick for B-schools will be to get the balance just right.
