Back in the eighties when I did my MBA, if you were not too academically inclined and therefore unable to study medicine or engineering, or ill-suited to the monomania associated with accounting (yawn), the MBA was a safe route to completing your education.
Doctors and engineers are still relevant, and so are accountants, thanks to the ever-increasing bookkeeping demands of regulators. But I am not so sure where the MBA fits in the current world and what we envisage of the future.
The MBA was a product of the heydays of industrial manufacturing and finance when post world-war 2, the western world developed via investments in industry and banking. General management was considered important to run factories and operate businesses which cloned each other in terms of business models.
The MBA allowed its finished product to have a common business parlance and equate performance with preconceived ideas of value creation measured by ROI etcetera across different sectors. It was also an age when large corporates attracted the best talent and people stayed with one organization for their lifetimes. HR was thus required to fit individuals into a standardized regiment. Marketing was about the 4 Ps and more in sync with the world of advertising and corporate communications.
But this is not the world we live in today!
To start with, we are now participants in the information age. Manufacturing and banking are still around but their position in the economy has been relegated to a distant third or fourth or even lower depending on one’s perspective. Even within these industries, general management cannot add as much value as specialized skills developed by pursuing more rewarding disciplines.
The highest paying jobs in the world are increasingly reserved for people with specific skills – such as data science or biotechnology or artificial intelligence or virtual anything!
Second, there is an entire new working life patterned loosely as the ‘gig economy’. This is the world where people get to do specific projects or “gigs” for a certain time and then move on to something else. I know so many bright, young and well- educated people who just don’t want to follow the 9 to 5 routine and are the happiest to move from one gig to another or do multiple ones concurrently. Some of them will eventually settle with one of these and build their entrepreneurial venture from it.
Third, the entire concept of value creation has been transformed over the years. The definition of success is much wider and it is misleading to box it in traditional financial KPIs’. Marketing is not just about 5 Ps’ as digitalization has made it much more sophisticated and as far as HR is concerned, it cannot do enough to attract the most capable people to the corporate world.
Freedom, autonomy, creativity and similar values are more sought after than before. It’s not that money is not important but people seem to be discovering new and different ways to acquire wealth. Real financial value creation is now seen as the forte of start-ups and entrepreneurs instead of c-suite executives.
What about general management then? And leadership? Don’t organizations want employees who are trained to be better leaders? Of course, they do and should. But having an MBA is no guarantee of better leadership. Leadership skills are built over the years with diversity of experience and knowledge gained from doing multiple roles as well as working across different sectors.
In fact, leadership role models now follow entrepreneurial success stories – people who have probably never even imagined doing an MBA. Just ask Elon Musk or Bill Gates. Many of the famous ones don’t even have college degrees!
To top it all, the advent of covid 19 has fast-tracked the transformation of the education perhaps more than any other sector. Even as the world reopens, higher education is being conducted in a hybrid model coupling various online or distance learning options with the physical classroom. Hence the value associated with building important networks via the MBA is also losing ground.
What then is the response from the business schools? While they probably still believe in the archaic education model, their recent impetus for executive education shows they are also feeling the winds of change. By developing more executive programs, they are themselves showing the path forward for any specific knowledge which the MBA imparts, can be accessed via executive education. This is a positive trend and we should see it grow to replace the MBA in future.
The issue is even more significant for developing countries like Pakistan. It is absurd to continue to spend precious resources on qualifications such as the MBA. As a policy, these countries should instead invest in decent liberal arts undergraduate programs and promote science, research and technology related specialized fields-of-study. Allowing business schools to continue to churn out plain MBAs’ who find it difficult to be meaningfully absorbed in this new world is no favor to their citizens.