Is an MBA still relevant in today’s changing business world?

by Dr. Kenneth Grossberg

The title of this piece, a question asked to me recently, implies that an MBA education may somehow have lost its justification as a training ground for future business leaders. So first let me answer the question with a resounding (though qualified) YES. MBA education is still very relevant to what young people aiming for a business career (or even those who work for not-for-profits) need to know in order to be successful future leaders in their respective fields. Having said that, the best kind of an MBA education is the one that prepares you for the unexpected. Alvin Toffler, the futurist author of Future Shock and The Third Wave, put it this way: “The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”

In fact, those now going for their MBA are probably the third consecutive generation in world history who have been educated for an unknown future from childhood on. So they are very conscious of the fact that nobody has a crystal ball to tell them what life will be like twenty or thirty years from now. If nobody is sure what jobs or industries will still be fashionable and “hot” by 2030 then what should they be learning now to make their MBA degree relevant?

First of all, they should be taught to ask questions rather than to look for easy answers. This is what Toffler meant by relearning, because it involves the willingness to question authority. Even in the best organizations there is a tendency for conventional wisdom to gel quickly and overstay its welcome. MBAs are warned about headquarters mentality, parochialism and ethnocentricity as the enemies of success in the global marketplace, but after they get their degree they must apply in the real world all of those lessons learned in the classroom. It’s easier said than done, which is why the superior MBA education stresses a flexible approach to problem-solving.

Another aspect of flexibility is cultural openness. MBA students who study outside of their home countries have an advantage over those who are strictly domestic in their education because they are more conscious of how cultural differences must be taken into account for a business strategy to work. The fact that many of these overseas MBA students are required to take courses in a language (usually English) that is not their native tongue is also useful in helping them sharpen the tools which will allow them to function effectively no matter where on the globe they are put.

Bilingual and trilingual job candidates have become more sought after than ever before as multinationals exert efforts to break down the barriers between their different national “silo” subsidiaries in favour of cross-fertilization across the global organization. They are still not where they should be in terms of cross-border synergies that leverage capabilities everywhere, but the international MBA is a critical element in this strategic effort.

The grounding that empowers these MBA graduates includes learning about success and failure everywhere. Foreign companies that have failed in Japan and Japanese companies that have failed abroad, for example, give them equally useful case studies to teach them how not to fall into the same traps when their turn arrives to conquer new and unfamiliar markets.

The least relevant type of MBA education is the sort that prides itself on emulating a military boot camp, where enormous emphasis is put on a heavy workload and simulating a stressful environment instead of on instilling the ability to examine the business environment and derive insights from processing the data mentally. There are always times when one must work hard, but I much prefer the type of MBA education that stresses working smart, observing one’s surroundings carefully and not being afraid to take risks or to choose an unconventional solution to a marketing or strategic challenge. All organizations have bureaucracies, yet the relevant MBA education teaches how to thrive in spite of them and to overcome that.

One problem of all MBA programs is the fact that they define “relevant” by what is current or contemporary, whereas a truly relevant business education should also teach students how things used to be, since there are good lessons to be learned from the achievements and failures of the 20th century, a period I call the electro-mechanical age.

By studying the development of the automobile industry or the department store boom or the rise of the Hollywood studio system in the early part of the last century, students get a better sense that the type of explosive growth which they think is unique to the past twenty years has happened before. Ironically, the pressure for MBA programs to stay relevant by constantly updating case studies and focusing on the flavour of the month, be it Google, Facebook, Groupon, or Apple, gives students the wrong impression about what is important in business and in strategy.

If, on the other hand, students are taught that the rise of a company such as Sears, Roebuck & Co. more than 100 years ago was just as revolutionary in its time, they then have a better perspective on what exactly makes for a successful business.

If MBA programs do not adapt their curricula to give students this historical perspective, we are more likely to see these students end up repeating those famous 20th century failures in the fast-changing digital age we now live in. An ounce of prevention is worth a pound of cure.

Dr. Kenneth Grossberg, Waseda University and Waseda Marketing ForumDr. Kenneth Grossberg, Waseda University and Waseda Marketing Forum