Rethinking the traditional MBA program in the wake of the GFC

by Professor Richard Hall, Associate Dean, Management Education

One of the most striking things that I found during the research and development phase of the Business School’s new MBA program is that the MBA, as most people recognise it, has undergone a fairly significant evolution over the past 50 years.

Historically, an MBA was designed to provide engineers who had learnt and applied their trade during World War 2 with the business knowledge that would help them to make the adjustment to a post-war world and economy. The currency of the MBA increased significantly in the 1980s and it became something of a passport to career success especially in the areas of investment banking and management consulting.

MBA curricula however had become increasingly technical and quantitative. Graduates had excellent technical skills however there was relatively little emphasis placed on people skills and the management of change. Graduates were emerging from these programs with the skills to survive in the modern workplace but, in many cases, not the skills to adapt.

In short, these MBAs were producing graduates without a strong connection to the more human aspects of management and leadership – they understood risk, but found it hard to contemplate change.

In a post-GFC world, it was that lack of connection and adaptability that saw some commentators lay the blame for the financial crisis at the feet of the MBA programs, and the graduates that they had produced.

This is, I believe, a overly simplistic analysis ­ but the fact remains that the business world was awash with MBA graduates who simply didn¹t have the skills or personal qualities to make the right management decisions when unprecedented challenges arose.

They could not adapt well to the severe challenges that the GFC brought us ­ and the result was a very public, and quite spectacular breakdown of the system. They had been taught what to do when it was “business as usual” ­ but not how, or when, to react when something caught them by surprise.

That’s because the traditional focus of an MBA was on things like abstract theory, and case study analysis ­all of which was taught and learnt at arms-length from the real business world. And this teaching had occurred at the expense of sharing wisdom about the political and human consequences of actions and decisions.

So when the business world began to shake on its foundations in 2008, there was a real lack of leadership skills in times of crisis. The GFC demonstrated that the traditional MBA curriculum needed to be fundamentally rethought.

The technical approach delivered a technical skill set, when international business leadership actually requires something far more people and real-world oriented.

In one sense it’s the difference between “book learning” and “learning on the job”; but­ both approaches have their place, and a combination of the two is absolutely critical in developing  a well-rounded, capable and in-touch leader. One who can think on their feet, and consider not only the text book approach, but also take into consideration the effect that their decisions will have on the people and wider community around them.

The post-GFC business world is an increasingly complex and ever-changing environment. The 2008 crisis has, appropriately enough, served as a timely catalyst for rethinking the role of the MBA, and applying that new reasoning to the program we have launched at the Business School.

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