Management Education | - "Business School Segmentation"

Kai Peters, Chief Executive, Ashridge Business School

I've been reading through the comments that have been made in all kinds of directions, and some of the mail that has been sent to me about research and relevance in particular. I apologize up front for how long this is, but I think some clarity on the multiplicity of goals that can be ascribed to business schools are at the root of many of these debates. By clarifying a little, I hope to generate some reflection.

Managerial needs change over time. These changing needs have profound consequences for providers and consumers of business education, yet they are not sufficiently considered by the schools themselves in their provision of programmes nor in their selection of faculty. This lack of alignment is one of the causes of the soul searching which has been affecting business schools in the past few years, and which is exemplified through articles ranging from Mintzberg’s comments concerning the lack of a practice orientation, Pfeffer and Wong’s articles concerning misdirected and irrelevant research, Ghoshal’s criticism of the teaching of misguided free-market dogmatism, and Bennis and O’Toole’s critique of insufficient impact.

It is my belief that one can identify four basic ingredients within business education and that these components are required at different levels and with different intensities for managers depending on the career stages at which they find themselves. Schools which take these differing needs seriously can position themselves along a continuum of provision. There is a caveat, however. I do not believe that schools can easily serve all of the needs of participants across the whole range of career stages. To do so, schools must be large, and they will have profound challenges in faculty selection and faculty allocation. Few succeed.

Success in management comes from balancing these four ingredients. At a basic level, managers must be functionally competent. They must understand the fields of finance and accounting, marketing and strategy, IT and economics, operations and human resource management.

Schools are actually quite good at fulfilling these needs. Both at undergraduate and graduate levels, content transmission is done well by institutions. The functional course streams match the departmental organisation levels in academia, and subsequently mirror the organisational structure of journals and other publications. Graduates of programmes are satisfied with their knowledge acquisition, and value their increased skills once in the workplace as many studies (GMAC, AMBA, Simpson, Simpson et al,) acknowledge.

Challenges arise in tackling issues of context and strategy. In management, there is a need to understand the inter-relatedness of organisational processes and critically, to understand the context in which these organisational processes occur. Managers must be competent sense-makers of societal changes, political drivers, social values, global interaction, and technological change.

These needs present a dilemma for schools. On the one hand, there is little cross-functional research at many institutions. This arises partially because there are few outlets for interdisciplinary research and because it is very difficult to be well versed in a broad range of subjects. More critically, an understanding of the multidisciplinary nature of the world, and of the practicalities of management in context, is not something one can acquire as a faculty member without practical experience in managerial environments whether they be in the private, public or non-governmental sectors.

The third level of managerial competence is related to this. Success is dependent on understanding functions and the inter-related nature of management. But an understanding is not enough. As a manager, one seeks to influence the organisation of which one is a member, or a leader. To be successful at this, one needs to understand human drivers, and needs to understand how collective views are developed and influenced. This understanding of organisational dynamics is effectively an understanding of the sociology of organisations and of societies more broadly viewed. It is one thing to formulate a strategy, and it is quite another challenge to implement that strategy successfully. Managers need to be able to communicate, to influence, and to challenge.

Again, this presents a significant difficulty for schools. There are simply not many faculty members who have the psychological understanding of human drivers and who have the experience of practically influencing social constructs: organisations.

The last level of managerial needs concerns the manager as an individual. Two drivers influence this level. Firstly, as one’s organisational seniority increases, one realises that one has to reflect on one’s own wants, needs, and capabilities in order to be able to prioritise limited time, and thus to focus on the important. Relatedly, as one’s seniority increases, there is a concomitant increase in age, and many senior managers understand that they not only have to prioritise their organisational efforts, but that they are, as humans, mortal, and must also prioritise what they seek to accomplish with the remaining time they have while they are alive.

These challenges are difficult for schools to fulfil. In many ways, the best service providers for these questions are likely to be psychologists and coaches rather than traditional business school academics. It certainly won’t be the resident professor of accounting!

Four lessons can be distilled from these four levels of managerial needs. Firstly, there is the factor of age. With younger participants, the primary need is for functional expertise. There are also some needs for an understanding of context, of organisational dynamics and of individual effectiveness. Practically speaking, however, the latter three needs will be more significant in the future, and much more meaningful then. There is almost an element of education on demand here which is often not understood. I personally think that it is not very meaningful to talk to 18 year olds about what organisational dynamics are about, and how personal mortality will generate a want and a need for reflection. I’ve certainly seen course fail miserably because students are being taught things at a stage in their lives where it simply has no meaning for them.

At the senior management end of the spectrum, there is effectively no need for a focus on functional skills. These have been acquired at earlier career stages, and had at one point been a “price of admission” for further career development. Senior managers focus much more on questions of strategy, of organisational dynamics and on their own individual drivers.

The second lesson from these changing needs for development concerns faculty composition. There is a need for traditional subject based expertise for younger managers, integrators and practitioners at mid career and a need for wisdom, reflection and insight at more senior levels. This maps onto a need for business school academics firstly, practitioners and consultants, “professors of practice” at a mid-level stage, and coaches, often very experienced ex-leaders and psychologists for the most senior managers.

The third lesson from these stages concerns the methodology of delivery. When transmitting content and functional skills, larger group sizes are not an insurmountable constraint. It is quite possible to lecture about economics to a group of 100, or to use internet-enabled learning to transmit to almost limitless numbers. One must be cognisant, however, that one is transmitting.

As managers gain practical experience, however, a transmission model becomes less suitable. Issues concerning interdisciplinary and cross functional trade-offs involve decisions, practical experience generates a requirement for practical solutions to real business problems, and theory must be balanced with practice. These challenges are therefore are best tackled through discussion and group insights and group sizes must be smaller.

At more senior managerial levels, the group size is even further reduced. Issues of personal priorities and board-room dynamics are not suitable to broad venues. Firstly, the subject matter is not necessarily suitable for a broad based discussion. It is often too personal. Secondly, even when issues are more suitable, the practical challenges of getting very senior managers together in a room at a common time can be insurmountable. People are simply too busy.

The fourth lesson concerns geography. At younger career stages, undergraduates seek a location for their school which is not too far from home, and which provides an affordable, fun study environment. Younger, full-time MBA programme participants who are looking for career acceleration are drawn to large urban centres where potential employers are located. Executives, on the other hand, often seek reflective environments outside of the normal bustle of busy careers.

These four lessons which arise from the different career needs of managers thus have all kinds of significance for the type of faculty that a school requires, through to consequences for the types of programmes provided (BA, MBA, open courses, tailored courses, coaching and consulting interventions etc) through to the physical location where activities take place (fixed seating for large groups, loose seating for workshops and comfortable chairs and quiet environments for coaching).

Not being clear on these challenges, and not segmenting properly leads to all kinds of problems. Introverted, functional driven faculty members can be disastrous for groups needing integrative thought and practical insight. Positioning open courses for very senior management often ends in empty class-rooms. The MBA, as much of the recent literature acknowledges, sits somewhere in-between a functional orientation, and an integrative, organisational dynamic need. Some studies (Simpson, GMAC) actually indicate that the breaking point between the two needs is at the age of 28. Those younger need a stronger functional weighting, and those older need a more integrated experience. Mixing the two age groups can be suboptimal.

Sometimes challenges of alignment and segmentation, even of co-locating different activities, can have hilarious outcomes. Watching undergraduates or younger MBAs devouring coffee and cake laid out outside of classrooms for executive education audiences is like watching locusts descend. Having coaches and reflective psychologists teaching fact-driven, functionally oriented engineers in MBA programmes has caused class boycotts.

Alignment and segmentation is critical for business schools. The broad range of needs across the career range of managers brings forth so many challenges for faculty, for didactic models, for group sizes and for physical locations. Schools that reflect on which segments they can actually be successful in, and who concentrate on these segments will surely be more successful than schools who want to do everything.

Comments

[Vincent Domine]

No doubts that Business Schools have to adapt their offering to the career stages of their "clients". The framework you presented is therefore very useful.
However, I also believe that one cannot start early enough with emphasizing the individual awareness and development of future leaders. Indeed, the impact of coaching on behavioral change diminishes drastically with the maturing of the personality. Whereas outplacement firms have made it their business to work with people after a career crisis has occurred, "management" schools have the opportunity and in my view the responsibility to work preemptively.
In their recently published guide Mastering Executive Education - How to combine Content with Context and Emotion" IMD provides a very thorough comparison of the engineering and clinical approaches to developing leaders.
Vincent H. Dominé, Clinical Organizational Psychologist INSEAD