Navigating the Changing B-School Landscape
To be successful in today’s world, we need more education, not less. And while the demand for business education is strong, expectations of business schools are changing.
Betsy Ziegler recently presented during Plenary I, A Matter of Degrees: Innovation to Meet the Shifting Demands of Students and Employers, at AACSB International's Annual Accreditation Conference in Chicago, Illinois.
Our world is more complex than ever before. When you turn the clock back 16 years, the biggest business problem we worried about was Y2K. The euro hadn’t been put into circulation, Facebook had not started, there was no LinkedIn, there weren’t even iPhones. The world was a much simpler place.
Today, there is an endless flow of data and information. If you wish to take an idea to market, you’ll experience far fewer barriers to entry. Brands are less sticky—buyers can scan customer reviews on Amazon to help them make their purchasing decisions rather than relying on the brand’s name.
To be successful in today’s world, we need more education, not less. And while the demand for business education is strong—there’s been a 50 percent increase in those earning MBAs over the last decade—expectations of business schools are changing.
Over the last five years, tuition has grown 4.5 percent per year on average; overall debt burden has grown 3.3 percent and average post-MBA salaries have only grown 1.6 percent. If you add in a tough job market since the financial crisis, the return on investment is rightly being called into question.
In addition, the growth in credentials is challenging long-held notions about the value of a traditional degree. Employers, job seekers, and students are increasingly recognizing the value of micro-credentials, such as nano-degrees from Udacity, specializations from Coursera, or e-portfolios on LinkedIn.
To survive and thrive in this changing landscape, schools will need to think hard about their purpose: to educate and equip the next generation of leaders. Business schools teach two things better than anyone else in the world: (1) how to build strong organizations, and (2) how to leverage the power of markets.
Markets are the dominant social institution of our age, creating more jobs, more wealth, and moving more assets around the world than any other social institution in history. It’s not governments, nonprofits, or churches, but rather free markets that make this happen. Over the last 20 years, the expansion of free markets throughout Asia has lifted almost a billion people out of poverty. What we do matters, and we must ground ourselves in this purpose.
To deliver on our collective purpose in today’s challenging environment, experimentation is essential. Some of the best examples of experimentation involve bold partnerships.
Traditional institutions are partnering with education technology companies to access their platforms without building the infrastructure from scratch. The University of North Carolina’s Kenan-Flagler School of Business partnered with 2U to offer an online MBA that comprises synchronous and asynchronous learning experiences, with a price point similar to that of many traditional MBA programs. The University of Illinois at Urbana Champaign's College of Business partnered with Coursera to put all of its MBA courses online for free; the students who want an actual MBA degree will pay 20,000 USD in tuition.
Arizona State University (ASU) is experimenting across private and public sectors. Through the Starbucks College Achieve Program, every Starbucks employee has the opportunity to pursue higher education with ASU. In addition, ASU recently launched a collaborative consortium with 10 other schools that come together at the institutional level to solve difficult problems without jeopardizing data integrity or competitive differentiation.
Other schools are experimenting by adapting their curriculums. At Kellogg, we’ve evolved our curriculum to be more cross-functional, based on the idea that business problems are rarely, if ever, one-dimensional. We’ve done this by creating a matrix structure in which the horizontals are the traditional functional departments such as marketing, strategy, and finance, and the verticals are skills we think are essential to future success, such as innovation and entrepreneurship or public/private interface. Students study at the horizontal, the vertical, and the intersection.
The expansion of experiential learning programs to give students more opportunities to put ideas into practice is another example of curricular innovation. The Ross School of Business at the University of Michigan, the Tuck School of Business at Dartmouth College, and the Carlson School of Management at the University of Minnesota, among others, do this very well.
Learn and Adapt
The future of business education holds a lot of promise. I believe in the power of business education, the importance and value that we offer. But we must listen harder to the market and be willing to learn, adapt, and engage differently than today. The most successful schools are going to be the ones that are proactive, experiment, and take risks. To quote one of my Kellogg colleagues, “Think Big, Start Small, Scale Fast.”
Elizabeth “Betsy” Ziegler is associate dean of MBA programs and dean of students at the Kellogg School of Management at Northwestern University. Before joining Kellogg in 2011, she served as a principal in McKinsey & Company’s Chicago office where she led the firm’s Life Insurance Operations and Technology practice and co-led its Financial Institutions Operations and Technology practice.