For Business Schools, Economic Crisis Points Way to Change

November 28, 2010

When opportunity arrives, we say it "knocks."

When the economy collapsed two years ago, an opportunity for business schools didn't just knock; it came crashing though the front door.

Incongruous as it might sound, the collapse may prove the best thing to happen to business education in a long time. It has shown us the kinds of business methods that are ineffective and, worse, destructive. It glaringly revealed an all-too-prevalent corporate mind-set that measures success mainly in terms of shareholder value—with value for the organization, workers, customers, and society in general far down the list of concerns, if on the list at all.

To change the way we do business, we must also bring change to the way we teach business. Some schools have begun this process, including the one where I serve as dean, the Johns Hopkins University's Carey Business School. Carey's new Global M.B.A. program, which began this fall, was created in the midst of the meltdown with the idea that a socially focused form of business education (and thus business practice) is sorely needed. Even the venerable Wharton School, the oldest business school in the United States, plans changes that will emphasize "driving innovation, making the school more international, and cultivating a culture that is a force for good," according to Poets & Quants, a Web site with news about business education.

At Carey, two major projects within the curriculum of the two-year, full-time Global M.B.A. illustrate our commitment to the idea of business that keeps "humanity in mind." The students spend the intersession of their first year in Peru, Rwanda, Kenya, or India, helping to develop business plans for communities in those emerging nations. Later the students immerse themselves in a classroom project that seeks ways to commercialize inventions and discoveries made by Johns Hopkins scientists and engineers. This social focus underpins the philosophy not just of the full-time Global M.B.A. but also of our longstanding part-time master's programs in business administration, finance, and other disciplines.

So a shift in the thinking of business educators has begun. It won't be an overnight process, given most schools' longtime emphasis on what I call the "science" of business. One key to making the changes stick will be ensuring that our students understand that the international landscape has been transformed. The United States still claims the world's largest economy, but it no longer dominates as it did for decades. China, India, and other nations have begun to elbow their way into the lineup of major economic powers. Moreover, the ease and speed of modern communication and travel have created greater interdependencies among nations, people, businesses, and cultures. Our future customers, and perhaps even our future business partners, will be found on nearly every continent. Business is no longer just a matter for Wall Street or for Main Street U.S.A., but for every byway in every community, large and small, in the world.

Indeed, all of us are joined in what the social critic Jeremy Rifkin has called "a race to global consciousness," progressing toward an "empathic civilization" that recognizes the aspirations of all people and the urgency of caring for our fragile planet. That is the core concept of this great opportunity presented to our business schools and students—to craft business methods that match Rifkin's vision by doing good for society while doing well for the company, by profiting others while turning a profit.

For too long, business schools have largely defined their mission as the teaching of a set of specific abilities. This how-to approach has focused on accounting, marketing, finance, and similar disciplines, defining leadership as expertise based on certain skills. Certainly these "hard" skills, the "science" of business, are important and necessary components of a degree program. But perhaps even more essential for the business leaders of the 21st century are the "soft" skills and qualities representing what I would describe as the "art" of business. Chief among them I would place:

  • Intellectual flexibility, the scholarly ability to juggle a variety of ideas and place them in a broad context.
  • Cultural literacy, a solid knowledge of the customs and history of societies all over the world, in the places and among the populations that are becoming part of the global marketplace.
  • A strong grounding in ethics, and an understanding of the ways that the subtlest ethical conflicts, if not guarded against, can lead to an organization's undoing. In this way, business schools can join their counterparts in medicine and law, where increased emphasis has been placed on ethics training in recent years.
  • The ability to communicate ideas well.
  • Optimism, creativity, a collaborative outlook, the willingness to lead.

Altering our approaches to business and business education won't be achieved overnight, but we must begin the effort. I believe that it is the role and responsibility of business schools to do so. The result will be the prescription for a response to the failed methods revealed by the economic meltdown: a new kind of business leader who is attuned to the cultures, the hopes, and the demands of people all over our rapidly changing, rapidly globalizing world.

Yash Gupta is dean of the Carey Business School at the Johns Hopkins University.