Last spring, Harvard Business School students entered 50 business plans in the institution's annual business-plan-writing contest. The winner, who like many others concocted an outline for an Internet startup, walked away with a $20,000 prize. What's more remarkable is that by graduation, half of the plans submitted in the contest also came up winners: They'd been funded by venture-capital companies looking for the next big Net hit.
That's just one example of the e-commerce mania that has students going to
business school in the hopes they'll become Net stock-option millionaires. The same mania is motivating grad schools to follow
in the footsteps of Harvard, Stanford and Vanderbilt, and include e-commerce courses in their MBA curricula. Some schools have gone so far as to create entire subspecialties in the subject. With students forking over a small fortune for a diploma, and corporations eager to sink millions into endowments for e-commerce research, it's easy to see why.
E-commerce is only the latest fad to
hit B-schools just as in the 1980s, MBA candidates boned up on corporate finance to land six-figure jobs on Wall Street. B-schools have a way of adapting to the
times, but are they good for anything more than churning out the latest generation of money grubbers?
That question is central to Gravy Training: Inside the Business of Business Schools. A better title might have been Debunking the B-school Myth. Business schools have succeeded in welding themselves to the country's financial culture, but Gravy Training authors Stuart Crainer and Des Dearlove give them an F' for failing to advance the profession of management. The authors say MBA-led companies suffer because of it, due to the dehumanizing, reduce-everything-to-a-spreadsheet management style that future CEOs are taught in B-school.
According to Crainer and Dearlove, both long-time British financial journalists, the time is ripe for MBA programs to rethink how they operate and where they're headed. The executive-education market is booming, but nonuniversity-based training, such as Michael Milken's Knowledge Universe and Internet-based distance-learning programs, pose serious threats to the B-school management-education franchise. As the authors see it, schools that don't act on the threat are in serious danger of losing students, and clout.
It's been more than a century since the country's first graduate program of management began at the University of Pennsylvania's Wharton School. From the start,
B-schools' stated intentions were to train tomorrow's captains of industry, legitimize management as a profession and conduct research. But as MBAs became more popular first in the 1960s, then in the 1980s, and most recently in the Net-fueled 1990s business schools lost sight of such lofty ambitions, assert the authors, and settled for pushing degrees the same way companies push products. By the late 1990s, schools in the United States and overseas were cranking out 100,000 MBAs a year, contributing to a $100 billion global executive-training industry.
Instead of creating effective leaders, the authors argue, B-schools have become diploma mills that produce managers who, driven by flow charts and fed on case-study curricula, have lost their ability to connect to the very people they're supposed to lead.
The authors are also critical of superstar professors who do little more than lend their names to the institutions that employ them. The fact that well-known academic John Kotter is the Konosuke Matsushita Professor of Leadership at Harvard Business School, and author of a Matsushita biography, might be purely coincidental, but it raises the issue of undue influence. If you had enough money, could you make it a condition of giving $20 million to a school that the professor write a book about you?' they ask.
Crainer and Dearlove also sound a cautionary note over the millions of dollars schools take in endowments each year
from individual and corporate donors fund-raising that could damage institutions' abilities to carry out independent research.
Gravy Training was first published in England in 1996; it was revised for its American debut with additional examples from U.S. business schools and an updated acknowledgment. But the book hardly
suffers from its British roots; the B-school phenomenon started in the U.S. and
continues to be bigger here than in Europe or Asia.
Crainer and Dearlove meticulously back up their assertions with footnoted interviews of deans, professors and senior-level executives, as well as quotes from newspaper and magazine articles and speeches. While their writing sometimes lacks zing,
it's broken up with enough lists, charts and short asides to make the book an enjoyable and easy read.
The authors spend the better part of the 272-page book spelling out the fall of the business-school empire, but they offer a way out, as well. They envision three tiers of schools: a small number of elite schools at the top filling the traditional role of finishing school for the next generation of tycoons; a middle tier concentrating on specialty areas; and a large bottom level providing localized executive training.
They also encourage B-schools to embrace technology-based learning, including courses taught over the Net. For some institutions, they espouse the radical option of breaking away from their university parents and operating as for-profit ventures, allowing the schools to enter the consulting business something they are barred from doing today as nonprofit organizations.
Gravy Training is recommended reading for anyone considering going to business school who wants an unflinching look at the worldwide executive-creation machine. And for those who've regretted not getting an MBA, a weekend with Gravy Training is all the therapy they'll ever need to get over it.