A 20-year-old undergraduate with a marketing major doesn’t have much in common with a 60-year-old CEO of a multimillion dollar firm. Even so, if business schools had their way, both would find their educational needs served by the same institution—and so would executives at every stage of their careers.
The truth is, at different points in their lives, business executives need wholly different types of management education. This fact should have profound consequences for business schools, yet administrators rarely consider it as they design their programs or select their faculty. A lack of alignment between what the market needs and what business schools offer has been the primary cause of the soul searching that has been rife within the business school community for the past several years.
I believe that business education should be broken into four categories that correspond to the four different kinds of education executives require as they move through their careers. At the outset of their careers, managers must be functionally competent. As they take on more responsibility, they must have a grasp of context and strategy. As they rise higher in the ranks, they must develop the leadership skills needed to understand and influence people. As they become CEOs and other top executives, they must develop the reflective skills to understand what they wish to accomplish.
Schools that cater to these differing needs can position themselves along a continuum of education. Most schools are doing an excellent job in some areas, although they fall down in others. In fact, I do not believe that it’s easy for schools to serve all of the needs of all participants across the whole range of career stages. The schools that try to do so must be quite large and must carefully select and allocate faculty. Few succeed. It’s better for schools to focus on the areas of business education that work best for them—and their students.
One Stage at a Time
At different points in their lives, executives must acquire, and business schools can help them hone, four distinct skills:
Functional competence. At the most basic level of ability, managers must understand the fields of finance, accounting, marketing, strategy, IT, economics, operations, and human resource management. Business schools are actually quite good at fulfilling these needs at both undergraduate and graduate levels. Business school departments most frequently are organized by functional silos, and academic journals also mirror those disciplines. Many studies acknowledge that graduates at this level are satisfied with their knowledge acquisition and value their increased skills once they are in the workplace.
I’ve seen courses fail miserably because students were being taught an idea at a stage in their lives where it simply had no meaning for them.
An understanding of context and strategy. Problems begin to appear at the next level of management. Rising executives need to understand how organizational processes interrelate and occur within a context. They must be able to make sense of societal changes, political drivers, social values, global interaction, and technological change.
These needs present a dilemma for schools. One reason is that there is little cross-functional research at many institutions. Not only are there few outlets for interdisciplinary research, but it is difficult for any professor to be well-versed in a broad range of subjects.
But there is a more critical reason. Without practical experience, it’s impossible for faculty members to acquire an understanding of the multidisciplinary nature of the world and the specifics of managing within context. To understand—and teach—such skills, professors must have had hands-on experience within managerial environments, whether they were in the private, public, or nongovernmental sectors.
The ability to influence people. Building on their understanding of the interconnected nature of management, executives at the third level want to learn how to exert influence on their organizations. It is one thing to formulate a strategy, and it is quite another to implement that strategy while getting the buy-in of the rest of the staff. To be successful, managers must understand human drivers and the development of collective views. They must cultivate a broad understanding of societies and the sociology of organizations, and they must be able to challenge and communicate.
Again, this presents a significant difficulty for business schools. There are simply not many faculty members who have a psychological understanding of human drivers. In addition, few faculty have any experience in practically influencing social constructs within organizations.
Reflective skills. At the top level of management, executives need to develop themselves as human beings. Two considerations move them. First, as their seniority increases, they begin to reflect on their own wants, needs, and capabilities so they can set priorities and spend time on what’s most important. Second, as they rise within management ranks, they inevitably are aging. Top managers not only must prioritize their work efforts, but they also must prioritize their life goals. As they realize they are mortal, they must consider what they want to accomplish with what time they have left.
Helping executives through these sorts of challenges is difficult for business schools. In fact, the best service providers at these times might be psychologists and life coaches, rather than traditional business school academics. It certainly won’t be the resident professor of accounting!
Four Lessons for Administrators
These four levels of managerial needs offer four lessons to business school administrators:
1. Age is a factor in management education. The primary need of younger business students is to develop functional expertise. While they also need to learn about context, organizational dynamics, and individual effectiveness, their most pressing need for those skills will come later. I personally think it is not very meaningful to talk to 18-year-olds about organizational dynamics and how an acceptance of mortality will generate a need for reflection. I’ve seen courses fail miserably because students were being taught an idea at a stage in their lives where it simply had no meaning for them.
Similarly, at the senior management end of the spectrum, there is no need to focus on functional skills. Executives acquire these at earlier stages of their careers—at one point, such skills were the “price of admission” for their ongoing career development. Instead, senior managers will want to focus on questions of strategy, organizational dynamics, and their own individual drivers.
2. The changing needs of executive development should dictate faculty composition. Younger managers need instructors who can teach traditional subject matter. Those in the middle of their careers need guidance from practitioners and integrators. Senior executives need coaches who can help them achieve wisdom, insight, and reflection. Practically speaking, then, business schools need to employ academics in the functional disciplines for younger students; consultants and “professors of practice” for mid-level students; and coaches, psychologists, and very experienced former leaders for senior managers.
3. The size of the classroom will shrink as the age of the students goes up. A large classroom is perfectly acceptable when the subject matter is basic business content or the development of functional skills. It is possible to lecture about economics to a group of 100 or to use Internet-enabled technology to transmit information to almost limitless numbers.
However, such transmissions of knowledge are less suitable for managers who already have some practical experience. Issues concerning interdisciplinary and cross-functional trade-offs involve decisions. Managers facing immediate business problems are looking for practical solutions from instructors with real-world experience, not simply an understanding of business theory. These participants benefit from smaller groups that can offer in-depth discussion and thoughtful insights.
At the most senior managerial levels, the group size is likely to be reduced even further. It is simply unsuitable to discuss issues of personal priorities and boardroom dynamics in large group settings. In addition, there are practical challenges inherent in trying to assemble a large number of senior managers in one room at a common time. Therefore, executive education for top-level managers is likely to take place in relatively small groups.
4. Geography plays a part in education choices. Undergraduates frequently seek out a school that provides an affordable, enjoyable study environment—and is close to home. MBA candidates looking for career acceleration are often drawn to urban centers where potential employers are located. By contrast, executives who are looking for a chance to be more reflective seek venues that are outside of the normal bustle of their busy careers. It is unlikely that one school can meet all these needs with one location.
Applying the Lessons
Administrators who understand the four stages of management education, and the lessons derived from them, have a clearer perspective on how to organize their schools. If a business school decides to cater to managers at specific career stages, this decision will influence the type of faculty the school hires, as well as the types of programs it provides—whether these are BA programs, MBA programs, open courses, tailored courses, or coaching services. Determining what market segment to serve will also help administrators choose the physical location where learning activities will take place. There will be fixed seating for large groups, loose seating for participants in workshops, and comfortable chairs and quiet environments for executives who have come for coaching.
If administrators do not segment properly, they face a host of problems. They might make the disastrous choice of picking an introverted and function-driven faculty member to lead groups that need to gain practical insights and learn integrative thought processes. They might schedule open courses for senior managers, and then find themselves teaching to empty classrooms.
Administrators must give special thought to how to teach MBA students, who require a blend of functional orientation and integrative, dynamic instruction. Some studies indicate that the age of 28 is the breaking point. Younger students need education that is weighted toward the functional disciplines, while older students need a more integrated experience. Mixing the two age groups can be suboptimal, but many schools do it.
Business schools aren’t the only ones that make mistakes in program format and delivery. Corporate universities and management development departments do it, too. I’ve spent considerable time trying to talk companies out of providing “courses” for their staff development when a more action-learning, integrative design would have been far more successful for participants.
Sometimes the challenges of alignment and segmentation—including co-locating different activities—can have hilarious outcomes. Watching undergraduates or younger MBAs devouring coffee and cake laid out outside classrooms for executive education audiences is like watching locusts descend. Having coaches and reflective psychologists teach fact-driven, functionally oriented engineers in MBA programs has caused class boycotts. In those cases, the school didn’t realize it had to tailor its offerings to its audience.
It is critical for business school administrators to understand how to segment their target markets and align their offerings.
Understanding the Market
It is critical for business school administrators to understand how to segment their target markets and align their offerings. Because managers have such a broad range of needs over the course of their careers, they require a broad range of faculty, teaching models, group sizes, and physical locations to help them learn. To be successful, schools must identify which segments of the management education population they can best serve, and then concentrate on those segments.
It’s also critical for administrators to understand how their physical locations should influence the kinds of programs they offer. If a school is located in London or New York, it should be serving the global business community; if it is located in a small town, it should focus on local students. Similarly, administrators must realize how the populations they serve affect their classroom and faculty structures. Schools with large undergraduate programs require a large faculty and a steady cash flow, but they are likely to be more successful at research than schools dependent on fluctuating MBA populations and small faculties.
I believe that alignment and segmentation are ultimately good for business schools. Specialization generates expertise and promotes differentiation. With differentiation, schools can communicate a clear message to a defined market. Differentiation also allows for a broad range of schools to thrive in the market. When all schools claim to be all things to all people, they will do some things very well—and other things very badly indeed.
Kai Peters is chief executive of Ashridge Business School in the United Kingdom.