Throughout 2014, the world will commemorate the 100th anniversary of the start of World War I. This anniversary will generate much thought about the war itself, as well as its causes, effects and implications for humanity. Just as there was much tumult among world powers in 1914, today's higher education landscape is rapidly changing, with many potential implications for business school strategies, outcomes and success.
There are four primary dimensions of World War I that can be translated as a note of caution to today's business school landscape:
1. Providing Outcomes in Demand
Governments had broad support around the time of the Great War -- as long as they provided outcomes demanded by their citizens. Similarly, business education has been enormously popular because of the implicit general belief that it provides good economic outcomes. However, as more schools have developed undergraduate and MBA degrees and the alumni pool has grown, it is inevitable that the economic value of business degrees will decline on average. Thus, as the cost of business education -- including opportunity costs -- continues to increase, average returns will decline and popularity may follow suit. In this environment, which appears to exist today, the B-schools that thrive will be those that continually adapt and provide students with in-demand business skills. The underlying lesson is that it is important to anticipate where the market is going, as well as to provide the outcomes it demands today.
2. (In)Effectiveness of Strategy
The strategies of both the Allied and Central powers in World War I were largely ineffective, leading to a stalemate that lasted from 1914 through 1918. Though each side employed new weapons and technologies, the effects were calamitous and ultimately unsuccessful, as neither side advanced and many died.
I frequently speak with students who wish to study and understand business strategy in order to prepare for the world of consulting and to develop the skills to be successful managers. They often underestimate the importance of knowing a business thoroughly and seek immediately to be in a position determining strategy. However, strategies regularly play out differently from intention -- especially when guided by little experience. To the extent that B-schools and business faculty increase their distance from the economy and industry, there will be greater variance in the success of their proposed strategies. Moreover, as long as B-school faculty focus much of their research on empirical analyses of the past, the disconnection with evolving markets will render research-generated studies inadequate. For this reason, B-schools should encourage research projects that combine data analysis and interactions with people. The lesson is that we must get out of the office to understand the relentlessly changing environment of business if we are to produce successful strategies.
3. Differentiation From the Crowd
Both the Allied and Central Powers implemented new technologies and weaponry, but their satisfaction with historic approaches contributed to the war's stalemate. It was, in due part, America's rapid adoption of new practices (automobiles, manufacturing methods, etc.) that reshaped the world economy and prosecuted the war to a conclusion. In today's higher education landscape, it seems every university aims to be the residential college of the future. However, as B-schools -- including the very top ranked and "best" schools -- show little discomfort with the order of things, we are vulnerable to disruption by new challengers. While I won't venture a guess as to whom these challengers will be or which will prevail, they will likely appear from sectors ignored or disrupted. And the winning solutions will be those preferred by the customers of business education -- not the providers. The lesson is to be comfortable at your peril.
4. The Importance of Forward Thinking
The armistice signed on the 11th hour of the 11th day of the 11th month in 1918 ensured that the German people would suffer as a result of the aggression inflicted by their leaders. However, there was neither forward thinking nor adequate contemplation of the choices that a suffering people would feel impelled to make. As a result, two decades later, Europe, Asia and the wider world were rocked by devastation on a larger scale in World War II.
Today's B-schools display less forethought than might be expected. An emphasis on generating revenue has created a situation in which some important outcomes -- e.g. the integrity of graduates or faculty -- receive little attention. Similarly, emphasis on lectures, theory and classroom learning, even when facilitated by technology, means the vast majority of business students have little experience creating results. Fortunately, some schools have recognized this disparity and in turn have made experience-based learning central to their mission. Client-based consulting projects, fellowships, cooperative education programs and case competitions are just a few examples of how students can gain practical hands-on business experience. The lesson is the need to build experience into education so students are prepared for their careers.
As we reflect on the centennial of the Great War's beginning, let's hope that the parallels noted above for business schools are resolved by the 100th anniversary of the war's end. There are many crucial lessons and areas of growth for B-schools and these key learnings will generate much good for the future economy and provide meaningful lessons for tomorrow's business students.