By Sunil Mithas And Henry Lucas
Business schools around the world face many challenges today. Broadly, they fall into five categories, and they may apply to different degrees to a school in India also depending on its history and context. Our impressions of these five challenges are based on our experience with B-schools in the US but also some in India and conversations with many academic colleagues over the years.
First, although we are aware of some transformational leaders who brought a positive change to their institutions, many business schools face a leadership crisis. For some a genuine, visionary and transformational leadership is missing at the school level and for others it is lack of vision or direction from politicians, bureaucrats or entrepreneurs governing the schools under their control.
Second, even if B-schools get lucky to hire a good leader and get him or her to stay for a reasonable amount of time to make a difference, they face the challenge of executing the vision in a systematic manner which requires tremendous persistence. A Chinese saying reminds us “it takes 10 years to sharpen a sword.” Too often, B-schools chase fads such as online learning, technology deployment for their own sake without thoughtfully considering the impact on overall learning. Business schools in the US must often obtain many layers of approvals for their initiatives slowing the pace of innovation. Faculty members can also be sometimes conservative when it comes to making changes in a school or a programme, although some amount of conservatism may be healthy because some changes may not warrant the cost.
Third, many business schools fail to use thoughtful analytics to improve their performance; they either do not have any metrics or they use wrong metrics (e.g., paying too much attention to rankings that are based on poor methodologies or using narrow metrics such as “student satisfaction” that can sometimes favour entertainment over rigour). It is important for business schools to try and measure student learning and the ability of students to analyse and solve problems.
Schools rarely track levels and trends in metrics comparing them with appropriate benchmarks to integrate their initiatives. Many business school do not even cover the cost of running their operations from their revenues (e.g. tuitions) and it is rare to see schools report their “income statement” or financials and be transparent with measures such as placement success or the funds raised. Lack of proper metrics and analytics means that almost every business school can live in its own make-believe fictional Lake Wobegone of Garrison Keillor where everyone can be “above average.”
Fourth, most business schools follow the traditional academic model of governance with decisions referred to innumerable committees and multiple levels of voting on each decision. It is very hard to have full communications and knowledge with so many committees operating with little coordination among them.
Finally, Deans (or Directors as they are called in India) are caught between faculty, major donors, alumni and university/government officials or promoters, although donors and alumni appear to be far more engaged with academic institutions in US than in India. While one would like to think these groups are all aligned in their desire to improve the school, in fact there are many disagreements on how to proceed, especially when resources are scarce.
Any business school that aspires to become world class and contribute meaningfully to all its stakeholders needs to address the above five issues: leadership, execution, analytics, discipline, and serving a broader set of stakeholders genuinely and rigorously. Although it is hard to find an example of a school that would excel on all the dimensions, pursuing progress on these dimensions is likely to prove valuable and aspirational for many schools exactly for that reason.
Here are some helpful actions to create a great B-school in India. First, select academic leaders who are either outstanding researchers themselves with demonstrated acumen for fairness and administration or those who have an academic mind to understand and appreciate serious academic scholarship. There is no substitute for putting a good leader at top—compromising on a leader can not only hurt the school during a leader’s tenure but it can also set back an institution by years (if not decades) because of the bad decisions and culture that toxic leaders leave in their wake.
Second, schools should report their plans and targets for executing their vision in detail to their key stakeholders such as senior faculty members whose long-term interests are aligned with the success of their institutions. Often, the execution agenda of a school gets hijacked by some who are not as much vested in the organisation. They are quick to move on to another school after trying their half-baked ideas and leaving a mess for others to sort. We have sometimes seen pet ideas being rushed through without sufficient deliberation and buy-in.
Consider use of technology in instruction as an example. Technology can be a saviour if deployed thoughtfully to improve access and quality as a complement, and not just as a substitute for face-to-face interactions that will continue to be the most powerful sources of learning experience. A good example is the move to online classes. Institutions not concerned with quality have produced substandard programmes (think of the for-profit colleges in the US) with little or no faculty interaction. The Smith School online MBA program began with the goal of being a high-quality program that strives to produce the same learning outcomes as the traditional on-campus program. We have interactive online classes with the students weekly using video conferencing software and there are two residence periods in the program. Business schools need to focus first on quality.
Third, schools must publish a detailed income statement and balance sheet with a candid management summary of risks and opportunities that a school faces as one sees in financial statements of companies. That is a minimum standard—we should expect progressive schools to be far more honest and candid in their reports and set a high bar for others. For example, Howard Frank, a former Dean at Smith School, started the practice of sharing detailed operational and financial data on Smith School during his tenure that was considered remarkable by many faculty members and even those who wanted to associate with Smith School at that time because of the transparency that it inspired. It is only by looking at a comprehensive set of meaningful metrics and examining their drivers that a school will be able to track where it is headed and identify or avoid any missteps soon enough.
Fourth, business schools should consider adopting frameworks such as the Baldrige Criteria for Education than paying attention to dozens of meaningless “feel good” rankings: it is quite common for almost any school to cherry pick one rating or the other or its sub-dimension where it looks good regardless of its fundamentals. Because what happens on these rankings has little to do with a school’s actions, they are a poor guide for actions. We are aware of many businesses that have achieved significant success by using models like the Baldrige criteria; it is time that B-schools also tie their leadership, strategy, customer focus, information and knowledge focus, workforce focus and process focus with business results across multiple dimensions to evaluate effectiveness of their initiatives.
B-schools in India should also pay attention to improve the research climate and incentives for knowledge creation. Although premier Indian management schools enjoy very high reputation for the quality of their students and some have done very well in the United States, barring one or two exceptions, most Indian management schools do not produce enough top quality research as measured by publications in premier journals to rank anywhere among top business schools. Part of the reason for generally low research quality and output is due to the low emphasis placed on knowledge creation in India. This may be due to scarcity of money to some extent but a more important reason has been cultural and almost non-existent faculty governance when it comes to policies regarding scholarly activities for tenure and promotion that exists at least to some degree in almost every business school in the US This is an area that also requires support from government and private sector who are ultimately going to benefit from that research culture and orientation to compete in today’s economy.
Finally, at a time when faith in many other institutions of society such as religious, political, and financial institutions is low, educational institutions have a great opportunity to continue to serve as the foundation for hope. Through their high quality research and dissemination of knowledge, B-schools can inspire reflection and debate on what it means for business leaders of tomorrow to reform and help to serve their economy and wider society. Doing so will not be easy but is certainly worth it.
Mithas is a professor at the Robert H. Smith School of Business, University of Maryland and the author of Making the Elephant Dance: The Tata Way to Innovate, Transform and Globalize and Digital Intelligence: What Every Smart Manager Must Have for Success in an Information Age.
Lucas, Jr. is the Robert H. Smith Professor of Information at the Robert H. Smith School of Business, University of Maryland, and author of Technology and the Disruption of Higher Education: Saving the American University.
(This story was published in BW | Businessworld Issue Dated 14-12-2015)
