Don't Blame the Business Schools
Steve Kerr is a senior advisor to and former Chief Learning Officer (CLO) for Goldman Sachs. He was previously CLO and Vice President of leadership development for G.E.
Editor's Note: On Monday, Joel Podolny kicked off The HBR Debate (see previous post below), saying, "Business schools provide students with many technical skills, but they appear to do little, or nothing, to foster responsibility and accountability." Henry Mintzberg added his own critique of the MBA education in an audio interview. A smart discussion followed both offerings. Here, Steve Kerr provides counterpoint to Podolny. Read on, then join the debate.
The notion that management education has such a massive influence upon its students that it can be blamed for today's financial and economic crisis is absurd.
If you don't agree, did you remember to thank your local MBA director for the largely uninterrupted booming economy we all enjoyed from the early 1990's until last year? Or, like Darth Vader, is the power of management education only for evil, not for good?
Do you hold our schools of journalism responsible for the fact that during the last presidential campaign so many political reporters sacrificed the most basic tenets of journalistic ethics for the man they loved? And what blame should we attach to our law schools from whom graduate a seemingly endless parade of tax-evading, rule-breaking politicians?
Also, let's remember that the number of MBAs who were active participants in the subprime-lending debacle represents a very small percentage of the total number of people with MBAs, even of MBAs working at financial services firms.
Do we have a right to expect our business schools to teach their students right from wrong, at least so far as business principles and practices are concerned? Definitely! And are our business schools doing so? Results vary, of course, but at least since the late 1980s, most schools have made serious efforts to integrate ethics, environmental concerns, and social responsibility into their curricula.
Some of the people now attacking management education have pointed to the use of indecipherable off-shore operations, duplicate sets of books, dummy holding companies, falsified financial statements, and other devices employed by the Enron folks, Bernard Madoff, and others of their ilk as evidence that business schools failed in teaching right from wrong. But the managers at the center of the scandals knew their actions were wrong; that's why they employed such elaborate subterfuges to conceal them!
So the real criticism of our business schools is that they didn't instill in 100% of their students the desire to DO right rather than wrong. This charge is true, but keep in mind that management educators gain comparatively brief custody of their students long after society's primary socializers — parents, peer groups, primary schools, etc — have completed their work.
Let me say a few words about the corporate management-education programs, which I believe can have a bigger impact on what happens in the real world than business schools can.
The ones with which I am most familiar are those of GE and Goldman Sachs. In both organizations, leaders and potential leaders are put through various simulations of real life situations where difficult choices must be made between landing a lucrative deal and doing the right thing. Jack Welch never attempted to conceal his hyper-competitive desire to win, but he always told the student-executives he taught at GE's training center in Crotonville, New York: "If you really win by cheating — by gaming the system, or fudging the numbers, or skirting some standard or ordinance — you didn't win, and you will not be successful in GE."
Similarly, in Goldman's leadership-development programs, both the current CEO, Lloyd Blankfein, and the former CEO, Hank Paulson, stressed: "No single deal is worth risking the firm's reputation. By doing the right thing now, even if it seems to be costing you money, you will always be repaid handsomely later. But if you don't do the right thing now, you will never get your reputation back."
When a university professor says, "Do the right thing now and you will be better off in the future for having done it," students may roll their eyes at the seeming naïveté of the comment. When the CEOs of GE and Goldman Sachs makes the same point to their employees, it's a different story.
Please email us to report offensive comments.
Posted by: Thependulumswings | April 7, 2009 9:16 AM
The comments to this entry are closed.