Tom Peters, a self-described professional loudmouth, has some things to say about business education—which should come as a surprise to no one. For almost 20 years Peters has dedicated himself to inspiring individuals and the organizations that employ them to transform the way they think, work, and live. “Embrace change!” “Work with passion and enthusiasm!” “Wow everyone!” Anyone so devoted to reinventing and reinvigorating the world’s workforce is obviously going to be interested in how that workforce is educated.
It probably won’t be much of a surprise, either, that Peters, a well-known fanatic against the status quo, offers a fairly controversial commentary on the state of management education. Peters’ unconventional perspectives have led BusinessWeek to call him business’ “best friend and worst nightmare,” and the same label might apply to his views on management education. While he is one of its biggest fans and advocates, he can also be a harsh critic. Drawing on decades of experience and research, he offers a unique take on what’s right and what’s wrong with business schools and offers ideas on how they might want to reinvent themselves.
How well do you think business schools prepare students for management careers?
I find that to be an incredibly difficult question, especially since I grew up around the Stanford/Harvard/Kellogg mentality. It’s like asking, “How well does the retail sector serve American consumers?” On the one hand you can shop from the Neiman Marcus Christmas catalog and spend $275,000 on the motorcycle that Hitler rode or some other damn thing. On the other hand, you can go to Wal-Mart and get some pretty good stuff for $9.95.
How does that relate to management education?
Maybe I’m talking more to myself than to you and to your readers, but I think when you say “management education,” the tendency is to think Harvard/Stanford/Chicago. But that’s about as intelligent as thinking Tiffany’s or Neiman Marcus instead of Wal-Mart when you say retail. Because management education consists of everything from a 38-year-old going to night school for five years to get an associate’s or a bachelor’s or maybe a master’s degree; to entrepreneurial people at the University of Phoenix providing all sorts of courses to people of all shapes and ages and sizes; to thousands of technical and administrative courses that are available on the Web for free or for $30,000 a year; as well as to Stanford, Harvard, and MIT.
Also, at the front of the line is the corporate emphasis on management education. Corporations are doing stuff that is so much more interesting than anything Harvard or Stanford is doing, and they’ve been doing so for the last ten or 15 years. I mean, the rapidity with which IBM has moved most of its training online is just breathtaking.
As a result, I would come out pretty much on the positive end of the scale, because I think there is an enormous amount of experimentation going on in terms of delivery channels and so forth.
Do you consider that to be one of the strengths of management education?
The wild and wooly experimentation and the breadth of the programs that are being offered? Absolutely. When I consider what’s really great about management education, the model that comes to my mind is a 34-year-old with an undergraduate degree from wherever, and I care not where, who gets her first supervisory job. She knows that she would like to be a lot better educated; and so she either goes online, or to Golden Gate college, or to one of a hundred or a thousand other educational centers, depending on where she lives.
At seven o’clock, after a long day’s work, she enters a classroom where the teacher—I say teacher and not professor because the instructor is not usually a tenured professor— is a partner at the local Ernst & Young office and is teaching accounting courses at night to a class full of 34- year-olds who really want to learn this stuff because they want to get better at what they do.
That’s real business education. An awful lot of that sort of thing takes place, and that’s our strength. More than we’ve ever had in the past, we have a better organized, informal educational system for people who were not born the day before yesterday.
And you see that phenomenon as representing the essence of management education today?
Yes. I’m much more interested in looking at the 36-year-old who has been booted out of Xerox and wants to open a restaurant in East Rochester and what he does to get himself a practical business education. That, to me, is really the heart of the matter.
You said that equating management education with Harvard is inaccurate. Why do you feel that way?
At some levels, I believe Chicago, Rochester, Harvard, and Stanford are fundamentally irrelevant, because they are not what it’s all about. Stanford trains 300 a year, Harvard trains 600 a year, and those numbers represent such a trivial drop in the bucket. Yes, these schools produce an unfair share of CEOs, and yes, a lot of research that presumably becomes a big part of management thinking is conducted at these institutions. I don’t deny any of that at all. But it’s just not where management education is at. There are two different stories. One is management education, and one is sort of research and leading thinking, and those are two completely different issues.
I told myself before this interview that I was not going to slip into the Stanford/Harvard trap, because that’s not management education any more than Tiffany’s is retail. I literally wrote myself a note, “Don’t talk about Harvard and Stanford.” They’re just irrelevant to what real management education actually is about. I completely acknowledge the role of the professor like Bill Sharp who goes on and gets a Nobel Prize. But I also acknowledge the role of that head of the mid-sized accounting firm who is teaching in the University of California extension course. He or she is a management educator, too.
Do you think organizations are becoming less biased toward individuals with degrees from particular universities?
I think they long have been. I remember attending some meeting of business school educators about four or five years ago, and one of the speakers from Citicorp said, “We’re not really interested in MBAs anymore. They’re too expensive, and they’re too poorly trained. We’re much more interested in finding peculiar and interesting people who came out of the Rhode Island School of Design or some other such place who have a peculiar and interesting attitude about life. Then we’ll do the business training.”
Do you think students are wrong to believe that a degree from a particular school will ensure their greater marketability?
No, I don’t. I don’t deny that society in general still has a fair dose of “certificatitis.” I’ve faced this issue many times before, and when a mom or dad asks, “Should my kid go to business school?” I’ll be damned if I’m going to tell them no. There is still perceived value to that Carnegie/Stanford/Chicago degree, and to deny that would be the utmost of silliness.
It’s just that I have a completely different view of education. Education is bringing together an exciting and strange group of faculty with an exciting and strange group of students and then encouraging them to create spaces that have never been created before. And if you need the certificate, we’ll give you the certificate at the end of your three years as long as you don’t murder a teacher or otherwise behave in a totally anti-social fashion.
Various companies that are doing a lot more of their own management training are saying, “We’d rather do the training. Just give us an interesting person.”
So I think the great news is that, a la the Citicorp guy, we don’t just brainlessly say having an MBA from a good school makes you a $90,000-a-year person. Various companies that are doing a lot more of their own management training are saying, “We’d rather do the training. Just give us an interesting person.”
Do you think that a closer connection between the liberal arts and management education would help improve the business school experience?
Yes. Utterly, absolutely, positively, unequivocally, yes. It’s one of my beliefs about education in general. I believe we ought to have a lot more arts, music, drama, and so on in primary and secondary schools, and I would like to believe that in the world of business we could have a lot more catholicity of association with the rest of the university.
I think professional education in general has that deficiency as an Achilles’ heel, whether it’s medicine, law, business, or engineering. I suspect that a thoughtful law school professor, or even an enlightened medical school professor, would say the same thing. After all, medicine is a humanistic practice, and you need to know more than comparative anatomy to really succeed.
One of my best friends is a guy by the name of David Kelley. He runs a company called Ideo in Palo Alto, California, and is the only non-Ph.D. tenured professor at Stanford. Ideo is, by many standards, the premier product design company in America, and David has become kind of the great guru for creating innovative companies. David and a colleague started a three-part product design program in the industrial engineering department at Stanford. The beauty of that program is that it literally consists of three equal legs in three disciplines. It’s one-third engineering, one-third art, and one-third business. And I believe it is the only one of its kind in the country.
Was your own education characterized by such interdisciplinary study?
No, and I’m angry about it. I’m angry that I attended Cornell as an undergraduate for five-and-a-half years and basically never made it out of the engineering quad into the liberal arts part of the school. I spent the ages of 18 to 23 there and literally came out a functional illiterate. I think I’ve talked to every engineering dean in the 37 years since I graduated and told them all, “You didn’t educate me, and I’m pissed off.”
I’m also angry, although not to the same degree, that I then went on for five more years to get my MBA at an extraordinary institution like Stanford and, with rare exception, never made it across the road from the business school. Here I was at this magnificent resource of extraordinary people engaged in extraordinary research and other activities, and my entire knowledge of the damn university consists of a space about 200 feet by 300 feet. That’s a shame.
Out of 300 students in the business school at the time, I had two or three enterprising friends who did really great stuff. They all had a liberal arts component to their degrees. There was one kid I remember who got a double degree from the communications department on the other side of the big road, and a couple of others took minors in psychology or something like that. And I think that is terrific.
I don’t think such interdisciplinary study is encouraged by either side of the road, by the way. I’m not just throwing the blame on the B-school deans.
You’ve been somewhat disdainful of what many consider to be the top-of-the-line business schools.
Yes, I find the big prestigious business schools to be shockingly boring and fundamentally useless, and I haven’t kept that opinion to myself. My viewpoint has angered some business school deans, one in particular to the point that he refused to introduce me when I addressed his students during a lecture series. But that’s kind of sad. I’m not arguing that I’m right. I hope to God that I do not have an unhealthily large ego. I just argue that I have a point of view that is perhaps worth considering.
In Search of Excellence, which celebrates its 20th anniversary this year, went against all of the Management 101-style conventional thinking at the time. What Management 101 approaches being taught today do you think should be questioned?
I’m not in an active business school right now, so I’m an awful lot less aware of what’s going on than I was in times past. I would say that the issues that Bob Waterman and I ranted and raved against in 1982 have been addressed surprisingly well by business schools, hardly due to our work on Search but as a result of the pressures at play. Entrepreneurial courses were not very common 20 years ago. Now they are as common as dirt. Taking kids through various leadership training and experience courses and so on was virtually unheard of 20 years ago, and now those are, if not as common as dirt, then pretty darn common.
I think it’s a time of great experimentation, and I think it’s a time when the whole notion of organizations that last forever is vaguely laughable.
You said in a recent Fast Company article that one of the driving forces that compelled you to write Search was anger at several leading business thinkers of the day. At whom are you angry today?
I’m not quite willing to go on the record with anger, but I’m not very enamoured with James Collins’ and Jerry Porras’ Built to Last. I think it’s a time of great experimentation, and I think it’s a time when the whole notion of organizations that last forever is vaguely laughable.
Richard Foster and Sarah Kaplan wrote a book that was published last year called Creative Destruction: Why Companies That Are Built to Last Underperform the Market and How to Successfully Transform Them. The book is just an incredible condemnation of the pathetic performance of America’s largest corporations. I’m so much more excited about the disruptive power of the Microsofts, the Apples, the 3Coms, the Netscapes, the Oracles, and the Sun - Microsystems, and their ability to make utter fools out of conventional wisdom. The upstarts interest me a lot more than the more traditional enterprises.
What are the three most important lessons that today’s educators should be teaching tomorrow’s executives?
Not to take anything very seriously, meaning that there is no such thing as accepted conventional wisdom. Enron taught us that we don’t even know what value means anymore; and I say that speaking as not only a big fan of Enron in the past, but also the guy who partially trained Jeff Skilling, the former Enron CEO, when he was on a team of mine at McKinsey & Co. So the big lesson should be not to take anything seriously and to be shockingly flexible. Nothing else is important.
You value curiosity and peculiarity and consider them important to an individual’s success.
Yes, but I want to go on the record that I value them because these are peculiar times, not because I have some passion for people who are freaks. It’s a strange time.
How can management educators prepare their students for these peculiar times? How can you teach someone curiosity? How can you teach an entrepreneurial spirit, to put heart in what you’re doing?
I don’t think you can teach those qualities. I think the issue is selection. If the Tom Peters Business School opened tomorrow morning, 25 to 35 percent of the young women and men, or, better still, old women and men, who were part of my business school probably wouldn’t even have a university degree. They would be people who had gone out on their own and scrimped and saved and scrabbled and played and created some exceptional enterprise in their town of 10,000 or 10 million.
Again, I think there is too much emphasis, particularly in the high-powered business schools, on what your test grades are as opposed to what your demonstrated ability is. About two years ago, Charles and Elizabeth Handy published a book called The Alchemist, which profiled people who started from nowhere and created extraordinary companies or enterprises. Charles made the point in a lecture I attended that virtually none of his subjects had much formal education. In fact, most of them had actually been the bad actors and the cutups at school who were determined to be curious.
Those are the people I’m going to invite to my hypothetical business school. And some of them will be 70 years old. I want 19-year-olds who dropped out of the university in their sophomore year, and I want those 70-year-old grandmothers who have decided that they have a passion to start their own businesses. There aren’t enough 70-year-olds in business schools.
What is the one thing management educators must do to remain viable and relevant?
Have a shockingly, shockingly diverse portfolio of students, and a similar cadre of faculty members wouldn’t hurt either. I’m talking diversity in background, age, and so on, much more so than having the appropriate representation of various cultural groups. Which I totally support, obviously, but it’s the next dimension of diversity that is needed.
One magnificent thing that has happened in the world of education is that three of the seven Ivy League colleges now have female presidents. The most recent appointee is Shirley Tilghman, who took over at Princeton last year. I read a lovely interview with Dr. Tilghman, during which she talked about getting beyond the lockstep application process at Princeton. She said, “I would like to think we can attract students with green hair. We will take pink and blue and orange hair, too.” That’s the spirit I’m talking about.
What are the three most significant changes that you foresee occurring in management education in the next 50 years?
Online, online, online. Bricks and mortar is dead. Period.
Frankly, I see online education as being the nature of all education beyond about the tenth or eleventh grade. I see it as the essence of university education—nonbusiness university education as well as the world of business training. And I see people putting together their own portfolios of courses chosen from wherever in the world they wish to choose them, as opposed to paying attention to a curriculum put together by a particular business school.
I’ve been making the argument, with my tongue only slightly in my cheek, that 20 years from now I don’t expect us even to have university degrees. Instead, I think on the wall behind people’s desks will be a series of certificates that come from their courses, mostly online, that fulfill specific needs relative to their various projects. For example, I take over a certain kind of project, and so I go online and find a course somewhere or another that fills a knowledge gap that I have relative to that particular project. A hundred of those will constitute my formal education.
What will make online education work? In other words, is it necessary to have a high-touch component?
Online education is already working. Something like 70 percent of IBM’s corporate training is now done online. And the company has done that in an insanely short period of time, like 24 months. It also has saved a ton of money, like a couple hundred million dollars.
I don’t buy that high touch is necessary. First, people are already giving higher valuations to the online stuff. At IBM, for example, it is my understanding that the course evaluation scores are higher for the online training than they were for the classroom-taught training. Years ago, National Technological University was one of the real pioneers in online education, and it was getting higher evaluation scores back then. So, the notion that the high-touch part has to be there is not necessarily true.
Number two, it’s all irrelevant. Because ten years from now, when the young men and women who grew up with Xboxes, Game Boys, and PlayStations, who lived by the screen from the age of two, make it into management, their skills will be coupled with the fact that the technology will be infinitely better than what we have now. The world will be entirely different.
I do recognize that there are lovely mixed models that include a high-touch element. The former marketing director of my wife’s home furnishings company recently changed jobs to go to work for a construction company. Her husband is the technical boss, and she will be the business boss. She just enrolled this fall in the utterly fabulous, marvelous, incredible distance learning MBA program at Duke’s Fuqua School of Business. Over the course of 20 months, she will spend about eight weeks total on campus, either in Durham, North Carolina, or at the Fuqua School of Business Europe in Frankfurt, Germany. The rest of her time is spent doing online stuff. As part of that, she’s participating in online chat rooms every night for about three hours. It’s a wonderful mixed model.
So I acknowledge the mixed model, but I do not think it is imperative. And I don’t think it’s going to be imperative at all ten years from now when broadband really becomes a reality, when everybody has infinite digital capability, when the quality of the learning experiences provided online is ten times better than it is today. Online education is already working, and it’s still primitive. Just wait until it gets good.
Christy Chapman, based in Winter Garden, Florida, is a free-lance writer.