At a Point Between Disruption and Transformation
- Converging trends such as decreased funding and increased demand for online learning are creating a dynamic environment for business education.
- The most successful business schools will address the six P’s: purpose, products, players, participants, professors, and partnerships.
- Business schools must rethink course content and delivery, incorporate advanced technologies, teach problem-solving skills, and collaborate with a wider range of partners.
The higher education landscape has long been affected by torrents of transformative trends—from challenging financial realities to emerging technologies to changing student preferences. But the pandemic has accelerated these transformative changes far beyond our usual expectations and predictions.
When Andrew Grove was CEO of Intel Corporation in the early 1990s, he coined a term that I believe describes this time in our history well: strategic inflection point. In his 2010 book, Only the Paranoid Survive, Grove describes this point as “a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely portend the beginning of the end.”
We have seen the changes brought on by the pandemic affect different organizations in dramatic ways. At one extreme, some institutions have been turned inside out and upside down—and sometimes, they’ve had to shut their doors. At the other extreme, institutions have shown great resilience, adopting successful strategies that have helped them rise and pivot to meet the emerging challenges.
How can we ensure that our institutions show resilience and rise above these changes, rather than succumb to them? I think we must first closely examine the emerging trends that are transforming business education, so that we can carefully devise a future course of action.
Converging Trends in Higher Education
We can identify several trends affecting business schools worldwide, including my own institution, the Asian Institute of Management in Manila, the Philippines. In many ways, each trend feeds into the next, resulting in the dynamic climate that we see in our industry today.
Financial challenges. Even before 2020, many business schools were facing decreased government funding. At the same time, they were managing escalating operating costs such as increasing faculty salaries.
Rising tuition. Increased operating costs have led to rising tuition for many business programs. As tuition costs have escalated, many students have begun to question the return on their investment in traditional higher education.
Nontraditional providers are gaining market share by delivering education in formats that are not only more accessible and affordable, but also more enjoyable and consumable.
Widening gaps between what employers want and what we teach. This gap is creating opportunities for new educational delivery methods and technologies to gain in popularity. Furthermore, the need for students to stay up-to-date in skills such as data analytics and innovation has opened the door for nontraditional providers to gain market share. Through disruptive innovation, these providers are delivering education in formats that are not only more accessible and affordable, but also more enjoyable and consumable.
Greater demand for online learning. At the same time, the pandemic forced schools to deliver their programs fully online, just as the newest generation of learners was entering the market. These digital natives have different preferences and expectations for how they want to learn and what benefits they want to gain from their educations.
Greater emphasis on lifelong learning. Moreover, learners today will likely need to reskill and upskill several times over their careers. No longer can they view graduating with college degrees as the end of their educations; rather, their training will have to continue. They will need to become lifelong learners.
As learner and employer expectations continue to evolve, demand for nontraditional educational products, such as MOOCs and microcredentials, is certain to grow. Employers need workers with the latest skills, and learners know they must keep their skill sets fresh.
Transformative Effects on Business Education
Together, these trends are converging into a significant strategic inflection point for business schools, which face increasing pressure to adopt or revisit their strategic plans. In the upcoming years, the most successful institutions will respond to the mutative effects of these trends by addressing each of what marketers call the “six P’s.” This concept of the six P’s can be applied to business schools to include purpose, products, players, participants, professors, and partnerships.
These categories provide a useful action plan that can guide our institutions in the months and years ahead. To prepare for changes to come, we can start by taking these six critical steps:
Reassess our purpose. Even now that students and faculty have returned to campus, business schools worldwide have been forced to pivot on a large scale. In their response to COVID-19, they have had to scramble to rethink how they serve their markets and create new settings for learning. Likewise, the pandemic has prompted some schools to focus even more on enriching students’ learning experiences with innovations that may remain beyond the crisis.
Reinvent our products. Online learning, which emerged as a technical innovation more than two decades ago, was already reshaping business education before the coronavirus pandemic struck. As we know, the pandemic forced most higher education institutions to convert their programs to 100 percent virtual learning, at least temporarily. But now that both providers and learners have undergone that accelerated experience, we will have to rethink our product strategies.
Respond to new players. Propelled by emerging technologies, MOOC providers have gained recurrent media attention, attracted investor interest, and taken advantage of evolving learner preferences. These alternate providers are not only taking away part of the conventional target market of business schools, but also creating and carving out new markets.
The rising popularity of these newcomers presents a threat to the models, modes, and markets that have so long contributed to the raison d’etre of business and management education. This has left some traditional business schools bewildered, unable to respond in viable ways.
Today, students can choose from a range of agile educational alternatives—from flexible online degree programs to microcredentialing programs to corporate reskilling and upskilling programs. These alternatives offer learners opportunities to engage with professors and peers from anywhere in the world, affordably and conveniently.
Engage differently with participants. On campus, the need for social distancing has prompted many schools to rethink how they are connecting with their students, faculty, partners, and other stakeholders. The new norms, many necessitated by these new spatial considerations, are blurring physical and virtual interaction.
As lifelong learning becomes more the norm than the exception, schools also will need to take new chronological considerations into account. Business schools will need to maintain different types of relationships with their alumni, in which they deliver programs designed to serve learners at every stage of their careers.
We must do more to reskill and upskill our professors, so that they are well-equipped for the coming age of online and hybrid teaching and learning.
Prepare our professors. One of my long-standing pet peeves has been that most PhD programs in business put very little emphasis on training students to be good teachers. But with so many changes now reshaping higher education, our professors will not only need to be good teachers, but also know how to teach and engage students in nontraditional learning environments. We must do more to reskill and upskill our professors, so that they are well-equipped for the coming age of online and hybrid teaching and learning.
Expand and strengthen our partnerships. Most schools have traditional bilateral and multilateral partnership agreements for students and faculty. However, we will need to expand our partnerships to include a much broader range of collaborators, including government agencies, NGOs, large multinational corporations, consultancy businesses, startups, tech companies, and community organizations.
For instance, Mars Incorporated, the global candy company, has long placed collaboration at the heart of its businesses. In 1947, its founder Forrest E. Mars Sr. emphasized this focus when he wrote that business should “promote a mutuality of services and benefits among all stakeholders.” Recently, Mars has partnered with Saïd Business School at the University of Oxford in the U.K. to explore how “the economics of mutuality” can help companies and their partners tackle some of the world’s most pressing challenges.
These trends regarding online learning, alternative educational formats, social distancing, and the need for wider ranging partnerships are likely here to stay. In that case, we must learn from best practices that support agility, responsiveness, and the student learning experience. We can start by examining how progressive schools have pivoted during this challenging time.
For example, many schools have invested in new technologies and struck advantageous strategic alliances. Others have adopted creative delivery models, tapped their alumni networks, and taken advantage of new platforms. Some have even created completely virtual campuses. These and other business schools are discovering that the level of their resilience might depend on the willingness of their leaders and faculty to experiment, innovate, and collaborate.
Our Future Reimagined
The disruptions now affecting business education present us with new threats and opportunities. To create future-ready managerial talent, business schools must future-proof the entire learning journey for students—we must rethink our course content and delivery, incorporate advanced technologies, enable hands-on practical problem solving, and collaborate with partners that range from other academic institutions to governmental agencies and corporations.
AACSB International is working to lead this narrative of transformation, and it views business schools and businesses as drivers of positive change. To fulfill this purpose, AACSB accreditation standards encourage business schools to form active collaborations and rich connections with other disciplines, with industry and practice, and with civic organizations. Through such partnerships, business schools can exert more positive influence on business and society.
Even as business schools continue to manage the effects of the pandemic, we should take the opportunity to reassess our purpose, respond to other players entering the market, and reflect on the diversity and needs of our stakeholders. We must remain agile as we customize our programs and forge more meaningful partnerships. Only by embracing the trends disrupting our industry and transforming our programs will we prepare our institutions for an emerging new age of business education.