I was to deliver my first speech as the dean of Northwestern’s Kellogg School of Management on the morning of September 11, 2001. I had just begun to address the incoming class of MBA students when I received news of the terrorist attack on the World Trade Center.
Nothing in my life had prepared me for the suddenness of this catastrophic event. All of us instantly knew that our world had been forever altered. I no longer recall what I was going to say that day, but I am sure that I have been saying something vastly different ever since.
Our history is punctuated with examples of massive change set off by devastating events. But in the 21st century, change itself has undergone a profound, if deceptively subtle, shift: It occurs more quickly and is more disruptive than ever before. In this new environment—which my colleague Philip Kotler and I refer to as the nanosecond culture—prediction is nearly impossible. At the same time, looking into the future to try to determine what awaits us is more important than it has ever been.
With this in mind, I now say that we need to anticipate the future, not try to predict it. As management educators, we all look to the future of business so we can determine what we should be teaching our students now. But given today’s unpredictable business environment, we must hone our anticipatory skills and become even better at identifying important trends early in the game. That is the only way we can drive our institutions, as well as the students and businesses we serve, in the right direction.
I anticipate that four distinct trends are set to shape management and management education.
Changing demographics. Over the next 25 years, 90 percent of the population growth will occur in developing countries. Developed countries are aging as developing nations are getting younger. The 65-plus age group is the fastest-growing population in Europe, while the under-35 group is expanding more quickly in Asia. The population that is most relevant to our MBA programs is the group between the ages of 25 and 29. That group is projected to grow by more than 12 percent in Asia and by nearly 50 percent in sub-Saharan Africa. At the same time, it is expected to shrink by 8 percent in Western Europe, 14 percent in the Baltic States, and 26 percent in Eastern Europe.
Demographics provide a wealth of information to business and business schools—particularly when combined with data from other fields, such as economics and sociology. For instance, many experts insist that China is the transition economy with the most potential, but I believe the future of consumerism is in India. Why? Because China will get old before it gets rich, while India will get rich before it gets old.
Demographics alone would tell us that there is not much growth to be expected in Eastern Europe, where populations are shrinking. And yet many of the transition economies in Eastern Europe are exhibiting growth patterns similar to those in India. That’s why Kellogg has been focusing its global curriculum on countries like Ukraine and Georgia, in addition to India. By watching the demographic and economic developments in these transition economies, we can chart a clear course to the future.
Increasing globalization. Nations no longer can isolate themselves economically, politically, or culturally. Indeed, collaboration between countries, organizations, and people has become of paramount importance. But globalization doesn’t mean that borders and cultural differences will cease to matter—in fact, they’ll matter more.
The multinational companies of the future will expect managers to navigate all types of economies. Business students worldwide are already preparing for the demands of their future careers. For example, many people are surprised when I tell them that a cohort at one remote Mexican university includes 60 Indian students. But these students want to master the local colloquial Spanish so they can start call centers in India that cater to Hispanic customers.
We’re all familiar with the famous blunders that resulted when marketing research from one country was applied blindly to a completely different one. Now business schools must educate our students to avoid making the same mistakes, especially in today’s unforgiving environment.
Changing competition. Disruptive technologies and a new kind of entrepreneurism have been reshaping the rules of competition and reconfiguring whole industries. The dynamics of this new brand of hyper-competition are not always intuitive, so we must learn to look at businesses with fresh eyes if we are to anticipate the forces that will affect them.
As an example, when I served on the board of United Airlines, I realized that business schools and airlines are similar when it comes to competition. That’s because, for each of them, future competition will arise from unexpected sources. For airlines, the biggest threat may come, not from other carriers, but from continually improving video conferencing technology. If, in a single year, 1,000 business executives choose one video conference over a first-class ticket on a flight between New York and Singapore, the airline industry could lose $10 million in revenue.
Tomorrow’s business schools also will be facing new competitors that are not just other management schools. Their students will be lured away by corporate management development programs, organizations that deliver just-in-time online learning modules, and leading-edge think tanks.
Demand for talent. Not only are corporations and institutions competing for clients and students, but they are fighting for managers and faculty. At a recent conference, I made the observation that leadership “humanizes business by recognizing that people are the only source of differentiation and value creation.” Business schools must help students understand that if organizations focus on their employees, they will bring in more customers. If they focus only on commodities, they will lose business. The future of business—and business schools—will depend on the people at the core of the enterprise.
It is not just these external trends that management educators need to anticipate. We need to look at what changes lie ahead for our core missions of creating, disseminating, and certifying knowledge.
If you want to build a ship, don’t drum up your men to go to the forest, gather wood, saw it, and lash the planks together. Instead, teach them the desire for the sea.
— Antoine de Saint-Exupéry
Knowledge creation. I believe that, in the future, more of our research will need to focus on management in transition economies—and more of it will need to be collaborative. In anticipation of this trend, Kellogg has already joined the Wharton School at the University of Pennsylvania on several endeavors, including founding the Sasin Graduate Institute of Business Management at Chulalongkorn University in Thailand in 1972 and the Indian School of Business in Hyderabad in 2001. I expect more schools to collaborate on international centers of excellence in various regions of the world.
I also believe business schools will need to engage the talents of students more often as co-creators of knowledge. When students help faculty formulate questions and theories about management, the students bring fresh ideas and experiences to the table. And when faculty engage students on research projects, they help students develop a research mindset that will benefit them for the rest of their careers.
Knowledge dissemination. As we teach business students, we should focus more on developing wisdom than on relaying information. By emphasizing wisdom, we not only will give our students a better education, but we will make our schools stronger than those new competitors that provide only information.
But developing wisdom in individuals is difficult because it requires students to learn from their own failures and successes. It requires that education be customized to the learner. To develop wisdom, MBA students will need to learn through an experiential curriculum that also includes an array of electives—elements we’ve worked to integrate into our programs at Kellogg. I believe more schools will need to follow this model in the years to come.
If institutions around the world are granting MBA degrees, how can one university separate itself from all the others? A school’s brand must reflect its soul, and a soul is built around people—faculty, students, and alumni—not merely around programs.
I learned this lesson during one of my most challenging professional experiences. I was working with senior government officials of Thailand to develop the country’s national identity with the goal of attracting foreign investment and building the tourism industry. As with any brand building, this effort was predicated on authenticity—creating a promise that could be met—in this case, letting people know what to expect when they visited or did business in this beautiful country.
My colleagues and I had begun to use the word “Thai-ness” to describe the warmth, caring, and hospitality of the Thai people, but I didn’t really understand what that meant until I witnessed it firsthand. As the branding project drew to a close in December 2004, my family and I were vacationing in the beach resort of Phuket. Late that month, the tsunami hit. The Thai-ness of the local people was immediately evident in the way they treated guests despite the devastation.
What I saw there made me think of our own industry and how every member of a business school community interacts with the school’s stakeholders. The business schools of the future will need to develop their own “school-ness”—a brand identity that is common to faculty, students, and staff—if they’re going to survive their own crises.
I believe that, as we prepare for the future, we must do more than refine our methods of creating, disseminating, and certifying knowledge. The cost of providing our students with leadership development, experiential learning, and global perspectives is rising more quickly than tuition. Therefore, we must find new ways to extract monetary value from our core missions—whether we publish and sell case studies and reports based on faculty research or establish centers that offer consulting services to corporations. Not only will this strategy allow us to cover the costs of learning, but it also will allow us to pour more resources into our programs and add even more value to our degrees. It also provides us with another avenue to put valuable ideas to work in the larger world.
Globalization and Leadership
In the past decade, globalization and leadership were two of the themes that dominated management education. I anticipate that, in the following decade, they will shape the whole business curriculum.
Today, globalization is no longer just a topic within the MBA program. It is the reality of business school education. All business schools must find ways to integrate globalization into the overall educational experience so they can truly replicate the work environment our students will enter.
At Kellogg, we have globalized the MBA program through four components: international student recruitment, international corporate recruitment, curriculum enhancements, and faculty development. It is still a challenge to pursue globalization while working within resource constraints and staying true to our existing mission and strategy. We have achieved our goals, in part, through teamwork and collaboration. For example, we have made alliances with other schools, collaborated on faculty development, and partnered with other institutions to launch new schools. Our global strategy is also intended to foster economic development in transition economies.
For years, business schools have taught students how important teamwork will be in the workplace. But I believe that business schools will need to apply teamwork to their own strategic plans, especially when it comes to globalization.
While globalization will remain a key challenge for business schools, it will be even more crucial for us to emphasize leadership. We will need to focus on our students’ personal development in addition to their career development. We will need to help them harness their potential so they can cope with work, family, and social pressures. We must sharpen their intellect and instill a sense of passion and responsibility so they will be prepared for long and satisfying careers in business.
French writer Antoine de Saint-Exupéry, who penned Le Petit Prince, also produced this marvelous statement about how to inspire people. He said, “If you want to build a ship, don’t drum up your men to go to the forest, gather wood, saw it, and lash the planks together. Instead, teach them the desire for the sea.”
Saint-Exupéry has captured our most critical challenge as management educators. We must do more than give our students the technical knowledge to build a company; we must do more than show them how teamwork will keep their enterprise afloat. If we are to keep management education thriving, we must inspire our students with a passion for the endlessly varying world of business.
Dipak C. Jain is dean of the Kellogg School of Management at Northwestern University in Evanston, Illinois. He is also the Sandy and Morton Goldman Professor of Entrepreneurial Studies and professor of marketing at the school.