The world is more complex today than ever. Is the MBA still a good way to prepare business leaders in this new world?
Much has been said about the role of greed in creating the financial crisis. Indeed, many managers were motivated to get the most for themselves in the short term. But most managers were simply unprepared to anticipate the impact of their decisions in a more complex world. Often overlooked, the economic downturn of the past couple of years was also a crisis of naivety. Whether MBA programmes can teach ethics and responsibility is already in doubt. What about complexity as well?
Businesses today face enormous levels of interdependence and variety. Flows of financial capital and goods move relatively freely - what happens in one place increasingly affects other locations. Housing prices in the US influence interest rates in Europe and China's growth affects commodities worldwide. Variety is consistently created by technological advances and workforces are more diverse and multifunctional than ever. The combination of interdependence and variety is constantly in flux, so even if you understand and optimise today, the best actions tomorrow might be different.
Recent findings on leadership development are discouraging for typical MBA programmes. Building knowledge that 'sticks' for effective performance on the job is much more important than academic learning. And for executive development, companies are moving back to the old notions of apprenticeship and mentorship.
Sitting in a classroom is useful only when it prepares learners for action. From day one, MBA programmes should incorporate real-life experiences, such as real-impact projects with companies, rather than having them as standalone courses (or worse, electives). The curriculum should include many such experiences, structured to cover a spectrum of company sizes, stages, industries and economic and cultural contexts. Learners should be taught to compare and contrast different experiences, enabling them to develop the ability to read situations and draw from a repertoire of responses. A real MBA should present guided, on-the-job leadership training.
Incidentally, these principles are important not just for developing the ability to manage complexity, but also to address ethics and responsibility. We learn to lead others effectively by working through difficult processes with people who are different from us. In fact, by using experiential learning to address leading responsibly, we develop leaders with the ability to make wise choices and implement them successfully.
