“REPORTS OF MY DEATH are greatly exaggerated.” These words supposedly uttered by Mark Twain on learning of his obituary being published prematurely could arguably also be said about the MBA degree. Despite headlines announcing that business schools are experiencing declines in their full-time two-year graduate enrollments, the MBA—which remains the flagship program at many business schools—is very much still with us. But what is its future?
The higher education and consultancy firm CarringtonCrisp has been gathering data on prospective MBA students since shortly after the collapse of Lehman Brothers in 2008. In this time frame, we’ve found that even where MBA programs continue to thrive, change is in the air.
Here, I draw on our study of the global business school market to examine the factors now shaping MBA programs. Our research suggests that tomorrow’s MBA will be changed by new demands from students and employers, evolving technologies, and the entry of alternate providers, to name just a few disruptors. I believe that business schools will need to adapt if they are to continue to attract students and remain relevant—it’s time for us to imagine a new MBA.
As we look at our research, our first goal is to determine what the data are telling us. Here are just a few of the questions business educators are asking today and the answers we’ve discovered:
What is driving change? Among the most prominent factors shaping the industry are prospective students’ demands for quicker returns, almost instant gratification, and flexible services tailored to their individual needs. According to our research, this trend has resulted in students increasingly preferring one-year MBA programs over two-year formats, as they seek faster and cheaper paths to the degree, as well as a bigger return on their educational investment. In CarringtonCrisp’s 2017 “Tomorrow’s MBA” survey of more than 1,400 students from 75 countries, we found that 27 percent prefer full-time one-year programs, compared to just 25 percent who prefer full-time two-year programs.
What are employers looking for? Employers’ perspective on the MBA is probably the most important factor in determining the future of the degree, and there is evidence that not all MBA programs are developing graduates with the skills that employers want most. For example, one in three employers responding to a 2017 Financial Times survey reported that they struggled to find business school graduates with so-called soft skills, such as the abilities to work with people from a variety of backgrounds, to prioritize tasks, and to manage time well. Employers are making it clear that technical knowledge is not enough—they want people who can work effectively across the organization.
How often will students need to update their skills? The rapid evolution of the workplace means that workers will need to update the skills they develop in their MBA programs sooner rather than later, which could raise doubts about the degree’s value. The cost of hiring MBAs also could make them less attractive to employers than applicants with pre-experience master’s degrees, who may be viewed as more nimble than MBA graduates. That means that MBA programs must work harder to produce graduates with the flexibility and skills that employers consider critical.
What topics do students value most? Strategy, leadership, and entrepreneurship. In fact, entrepreneurship came in third on the list, its highest rank ever. But that tallies with our data that show that around 25 percent of MBA students are motivated to start a business at or after graduation. Prospective students also expressed strong preferences for content related to marketing, international business, project management, economics, technology management, data analysis, and decision making.
What are the biggest competitors to the MBA? In the business school sector, the popularity of the MBA is giving way to the rise of specialist master’s programs, which offer students more flexibility, lower prices, and degrees that are increasingly recognized by employers. In CarringtonCrisp’s latest “Tomorrow’s Master’s” survey, 67 percent of prospective students relayed that they are considering pursuing specialized master’s programs rather than MBAs in a few years’ time, and 47 percent believe that a master’s degree will be just as valuable to employers as an MBA.
The good news is that 31 percent of those surveyed also plan to pursue an MBA within a few years’ time, but specialized programs are providing the market with a serious alternative to the MBA. Schools must be careful to make the master’s and MBA programs in their portfolios complementary offerings, rather than programs that conflict with or cannibalize each other.
Outside the sector, competition comes from organizations such as consultancies, corporate universities, and the tech sector. For example, LinkedIn launches 30 or more new courses each week as part of a course library that now extends to more than 10,000 different programs. In the future, students could turn to such self-paced, just-in-time educational options in greater numbers.
Nearly half of prospective students believe that a specialized master's degree will be as valuable to employers as an MBA.
HOW SHOULD MBA PROVIDERS ADAPT?
Perhaps the biggest question for business schools involves just how they should respond to these ongoing trends. While each school has its own strengths, values, and objectives, all business schools can take the following strategies to heart as they consider their next steps:
Embrace more flexible program formats. When I was growing up, there were only three channel choices on British television, and they all were delivered across the same platform. Today, there are thousands of choices, some delivered via traditional means to my television, but others bypassing television altogether, delivered via streaming services to my laptop, tablet, and smartphone.
The MBA is moving in the same direction. In our research, 43 percent of prospective students cite program flexibility as a big factor in where they choose to study. That’s why it is rare today to see a business school offer an MBA through just one mode of delivery. Instead, schools offer specialist, executive, part-time, weekend, online, and blended formats. Some MBA programs don’t require students to set foot on a traditional campus; others allow students to study at their own pace; others allow students to personalize content, study remotely, or access material over mobile devices.
Be open to collaboration. The challenge for schools is finding business models that enable multiple approaches to the MBA, which aren’t always compatible with how a business school is structured. Collaboration is one way to provide students with greater choice. By working with faculties in a parent university or external organizations, schools can offer a wider variety of MBA program formats and delivery methods.
Invest in soft skills development. Like respondents to the Financial Times skills survey, a quarter of the prospective MBA students we surveyed noted that they wanted to develop their skills in leadership, communication, and critical thinking. More than one in five respondents wanted to strengthen their entrepreneurial mindsets, team building and teamwork skills, and networking and collaboration skills.
Consider specialist MBA programs. With today’s students seeking out MBA programs that are relevant and targeted to their career goals, business schools might also consider tailoring their MBA programs to suit specific industries. We’ve seen an increase in specialist MBAs, such as the Real Madrid MBA in Sports Management at Escuela Universitaria Real Madrid Universidad Europea in Spain, a degree delivered in partnership with the Real Madrid football club; or the Thoroughbred Horse Racing Industries MBA at the University of Liverpool in the United Kingdom. Students interested in entering careers in the wine industry, the energy sector, healthcare management, luxury brand management, or sustainability all can seek out MBAs focused on these particular fields.
And these specialist degrees are proving popular with students. Fifty-three percent of respondents to our “Tomorrow’s MBA” survey noted that they would opt for a specialist MBA, compared to 46 percent who expressed a preference for a generalist degree. Areas of greatest interest include information technology, finance, and entrepreneurship.
Design more personalized career services. Ultimately, most students enroll in MBA programs because they want to advance into more senior roles at their organizations or move their careers into new sectors. In “Tomorrow’s MBA,” 25 percent of prospective students noted that they placed special value on four types of professional development: career coaching, career development workshops, personalized career planning, and mentorship programs. Schools can design such highly personalized services to differentiate themselves from competitors.
When it comes to the future of the MBA, there will be no prizes for being in the middle. Demand for the MBA isn’t disappearing, but schools that lack strong brands, flexible offerings, nimble content, personalized services, or reputations in particular industry sectors are likely to feel a squeeze.
Fourty-three percent of prospective students cite flexibility as a factor determining where they choose to study.
TIME TO REIMAGINE THE MBA
Perhaps the greatest argument for rethinking the MBA is this: If business educators were to imagine a new postgraduate business degree today, few would design a traditional MBA. That’s why I expect we’ll see more schools completely revamp their MBA degrees. Great opportunities exist for business schools that are willing to redesign their postgraduate portfolios to better meet market demand.
Take, for example, the London-based King’s Business School in the United Kingdom, whose postgraduate portfolio does not include a full-time MBA. Instead, it features an array of undergraduate, postgraduate, and executive education courses. Some business schools might follow a similar path, forgoing traditional full-time MBA programs altogether in favor of shorter-term graduate business degrees, executive MBA programs, or more flexible or fully digital routes to degree completion.
There is yet another option—some schools could opt to take larger risks to gain “first-mover advantage,” a well-known concept among startups. The first to market with a new product or service gains momentum by leading the industry. This begs the question: Who will be the first movers among today’s MBA providers? What will MBA programs of the future look like?
Most likely, they will allow students to regularly update their learning. They will provide flexible formats that adapt quickly to the needs of students and employers. They will put what students learn in the context of wider societal issues, and they will leverage technology to enhance and deliver strong student experiences that go far beyond the academic into the experiential. Imagine that.
Andrew Crisp is the co-founder of CarringtonCrisp, a specialist higher education consultancy based in London, United Kingdom. He also is a member of BizEd’s advisory committee.
Read more about the evolution of the MBA market in our interview with the MBA Roundtable's Jeff Bieganek, "Catching Up to Change."
This article originally appeared in BizEd's July/August issue. Please send questions, comments, or letters to the editor to [email protected].