FIVE years on from the collapse of Northern Rock, and the ensuing crisis is still keenly felt in the world’s business schools. It’s been the source of some soul-searching – professors have had to question their roles as the educators of some of the crisis’s leading figures.
Much of the critique is rightly rebutted. Michel Patry, director of HEC Montreal, has fought back with particular vigour. “Today’s managers are neither greedier nor more narrow-minded because of what they learned at business school,” he says.
But, the crisis has proven an opportunity to do more than restate the value of business education. Masters programmes have changed. Although some crow about the importance of teaching ill-defined ethical behaviour, schools are seizing the chance to become more broadly relevant and learn from recent troubles. The crisis has shaken certainties and forced programmes to be more innovative. But it’s also important to be realistic.
It’s unsurprising that schools have tweaked the curricula of their postgraduate degrees to accommodate a changed business environment. And there has been particular pressure to reform the teaching of ethics.
But schools have been sensible to avoid accusations of wooly thinking. Roger Delves, director of Ashridge Business School’s masters in management programme explains that teaching ethics means “helping to inform the decisions of individuals.” Cass Business School takes a similar approach. Susan Roth, its director of MSc admissions, says her school now brings in speakers from companies to provide examples of ethical dilemmas – and how they can best be resolved.
Attention to ethics arises from a long-standing (certainly pre-crisis) concern to prepare students for any kind of successful career. It’s nothing new. The difference is that business and finance have become more exposed to political or social trends, so managers must prepare themselves to navigate this new situation.
Business schools, and their postgraduate programmes, are therefore seeking to address the wider question of what has changed in the broader economy – and how that should be covered in the education of future business leaders.
Many schools have rethought the way they teach risk. According to professor Nigel Meade, director of Imperial College Business School’s MSc in finance, his course “now considers reputation and operation risk, in addition to the conventional market and credit risk teaching.”
A broader understanding of risk has also changed how leadership, and the soft skills associated with leaders, is taught. Delves argues that, before 2008, “there was a rising tide that lifted all boats. Leading in such an environment was about maximising forward progression.” Now, against a more complex background, leaders face more demands, and must be able to carry through transformative change at the same time as remaining paranoid of failure.
But why do these changes matter? And why are they important to anyone considering undertaking a masters course? “Any downturn in the economy is good business for business schools,” according to Roth. “Students facing fierce competition, with fewer jobs or promotions on offer, want to skill up.” Cass has seen an upsurge in intake for its MSc programmes – courses typically taken before any sort of work experience.
Certainly, given a reduction in headcounts in many companies, and a closing off of previous avenues to well-paid jobs in consultancy or investment banking, it can make sense to distinguish yourself by undertaking a relevant masters degree. But it’s crucial to understand that – despite well-intentioned changes to curricula, or greater investment in business school career services – a masters is not a quick route to a well-remunerated new role.
In fact, it’s wrong to see an MSc in management or finance as a means of making more money at a difficult time – and the figures suggest that most students realise this. London Business School’s latest employment report, profiling its 2011 graduates, found that only 4 per cent accepted a job because of the compensation they could now command.
The financial crisis has firmly changed this aspect of the business education world. Although it may once have been a sensible step to go to business school to leverage your career upwards, it now pays to be more realistic.