Should Business Schools Act More Like Business?

Like most business deans, a major part of my job is to meet and interact with business leaders. When meeting with business leaders and discussing issues related to faculty, staff, strategy, and curriculum, it is difficult to listen to them frequently make comments like, “How can higher education leaders manage a school that way? We would be out of business if we did that.” Or, my favorite, “I hope the faculty members aren’t teaching that method to your students as a way to run a business.”

In the past, I have always replied with my standard answers to these statements: Higher education has successfully been around for hundreds of years. We are not a business, we are educators. Students and employers are not customers, rather business schools prepare students for a lifelong career, not for their first job. The job of the faculty is not only to teach but to also create knowledge. And so on.

Now, living in Silicon Valley, seeing the disruption around us and, especially, the disruption occurring in higher education, I am refocusing my efforts on providing insights into the areas where business schools are different than most businesses (and explaining those differences), as well as describing the areas where we are similar. The areas of similarity are becoming more apparent, and we have reached a point where it is essential for business schools to embrace the practices of great businesses.

Great businesses have a sharp focus on customers and the customer experience, developing strong leaders, creating healthy work environments, and encouraging smart risk-taking. Are these the attributes that we should foster in our business schools? Before we answer this question, it is important to take a look at what we are currently doing.

The Business School Paradigm

In most business schools, our practice is for faculty and administrators to focus their energy and resources on scanning the internal environment through their discipline’s lens; looking at the curricula of other business schools; centering their research efforts on publications important to their disciplines; and insisting that human resource decisions be based on rigid rules and policies, union contracts, and other sources of internal operation designed to enforce those rules.

This paradigm is limiting. The faculty operates by teaching, telling, and discovering, by applying inputs and insights that are internal to higher education. By design, change in higher education occurs quite slowly. Our paradigm is not to discover best practices external to us or to discover changes occurring outside our known environment. Therefore, we are often the last to know of leading-edge discoveries and to come to the table of change, even in our own field of discipline, preventing us from responding rapidly to change.

Why is it necessary for businesses and business schools to respond rapidly? As John Chambers, former executive board chair of Cisco, is quoted as saying in Michael Arena’s book, Adaptive Space, “If you don’t reinvent yourself, change your organization structure; if you don’t talk about speed of innovation—you’re going to get disrupted. And, it’ll be a brutal disruption, where the majority of business will not exist in a meaningful way.”

A Finite or Infinite Game?

In order to thrive, great businesses constantly scan their environment, both inside the company and outside the company. They are continuously in discovery mode and frequently changing what they do and how they do it. This evaluative scanning process increases their wisdom, resilience, and agility. GM’s chief talent officer, Michael Arena, says in his recent book, the “lack of agility is the kiss of death.” To be agile, companies must adapt quickly. To adapt means to constantly scan the environment, to live in discovery, and to ask many thoughtful and thought-provoking questions. Asking, rather than telling, generates rich information that can be used to adapt and to adapt quickly. This, however, creates a paradox for those of us leading business schools.

Our current paradigm can be defined by what Simon Sinek would call a “finite game.” In finite games, there are known players, fixed rules, and an ending, like graduation, publication of an article, or promotion to full professor. There is no real need to adapt quickly to win the game. You need to hire the right professors, who publish in the right journals, and recruit and retain the right students with high standardized test scores and high GPAs, and ensure the students graduate on time with a good-paying job.

The paradox is that, although we currently follow the rules for a finite game, we are actually playing in an infinite game, with known and unknown players, changeable rules, and no winners or losers—only growth and expansion for all students and for all of us in learning. When we think we are playing a finite game, the focus is on competition and scarcity. However, in an infinite game, the focus is on growth mindsets, real learning, and continually moving forward.

A Just Cause

So, what game are business schools in—finite or infinite? Are there unknown players? Yes. There are many other players in higher education, like corporate education, self-learning, certificate programs, and various other modes of learning that are also involved in producing our current product. Are the rules changeable? Yes. The rules have already changed: current degrees may or may not be valuable to prospective employers; individuals need to reinvent themselves frequently to stay current in the local economy; and the historical company-based employers are decreasing in favor of new structures.

Are there winners or losers? According to Sinek, “There is no such thing as winning education.” Sinek recognizes that there are finite games within the infinite game; but in the end we are only competing against ourselves. AACSB accreditation standards implicitly are built on this notion, with the focus on continuous improvement based on a school’s individual strategy.

According to Sinek, businesses can follow a checklist to ensure they are successful in the infinite game:

1. Just cause
2. Courageous leadership
3. Trusting teams
4. Worthy rival
5. Flexible playbook

The same checklist can be used for business schools.

To lay a strong foundation, it is essential to begin with a just cause. Unless we define our just cause, we will continue to play a finite game. Once business schools define and clarify their just cause, the cause itself guides future decisions and behaviors. The issue of a just cause seeks to answer vital questions: Why do we exist? Are we an expansive place to grow? Are we a certifier of authentic and applicable credentials? Are we discoverers? Are we knowledge creators? Are we knowledge enhancers? Are we a means for social mobility?

Remember, Amazon never considered itself an online bookstore; Netflix did not consider itself a provider of DVDs; Apple did not constrain itself to being a computer manufacturer; and GM is now in the mobility business. So, who are we? Once we determine our just cause, the clarity will pave the way for us to focus on the business attributes that can help us succeed in the infinite game. I look forward to hearing from you and continuing this discussion.

 
Beck-Dudley is the former dean of the Leavey School of Business at Santa Clara University in California