Business Schools: Differentiate Yourselves!

Overall, business schools offer a set of rather generic products. If you think about it, they all are very much alike. Most or all provide similar courses and are international in outlook (at least among the top-tier schools). Most promote large networks of successful alumni and long-standing partnerships with companies. For several years, these similarities have been reinforced by the various rankings, which evaluate schools on similar criteria, from the international makeup of their student bodies to the number of papers their faculty publish in top-ranked journals.

We see these similarities even symbolically. In France, at least, many schools’ logos are either blue or red and are contained in some kind of box or square.  

While this “one size fits all” strategy might have worked in the past, continuing that approach could be a risky endeavor. As online education becomes more popular, it extends the reach of many programs so that courses taught by the best professors and institutions are available to students anywhere in the world at any time. Institutions that are geographically distant can suddenly become close competitors. This digitalization of higher education—which has been accelerated by the COVID-19 health crisis—has generated greater competition and saturated many markets for management education.

Within such markets, students legitimately ask why they should attend one school over another. Is a school’s position on the often-criticized ranking tables the only way students can differentiate its programs from those of its competitors? Or are there other ways for schools to set themselves apart?  

Disruption Via the Homemade MBA

An excellent example of where the industry could be headed is the experience of Laurie Pickard. Pickard wanted to earn an MBA, but she was not ready to spend tens of thousands of dollars in tuition. So, she decided to go a different route. She designed her own MBA curriculum by combining several massive open online courses, or MOOCs, from prestigious institutions such as Harvard Business School, the Wharton School at the University of Pennsylvania, and the London Business School—a strategy she chronicles in her book and website, The No-Pay MBA.

In all, Pickard completed nearly 30 MOOCs taught by the best professors and schools, acquiring a world-class business education at only a fraction of the cost of a traditional MBA. In business terms, she applied a decoupling strategy. That is, instead of taking all her courses from one institution, where some courses might be better than others, she compiled courses from many institutions, each as good as the rest.

Obviously, such a homemade MBA is not accredited, which certainly could be a drawback with potential employers. Nonetheless, the job market increasingly values entrepreneurial spirit, and nontraditional students like Pickard can take advantage of an increasing variety of educational alternatives (such as Google’s Career Certificates). As the decoupling trend continues, it could represent serious competition for established business programs. For that reason alone, Pickard’s no-pay MBA is an indicator of possible digital disruption to come.

Choose a Long-Term Solution

Business schools have several remedies for this disruption at their disposal. Unfortunately, these strategies are likely to offer only short-term fixes:

Offering customization. Pickard’s homemade MBA wasn’t just cost-effective—it allowed for a highly personalized curriculum. Business schools can replicate this customization, at least to a certain extent, by making even more room in their curricula for electives, by allowing students to take online courses from partner institutions, or simply by permitting students to take courses at their own pace.

Moreover, business schools can offer educational guidance that students would not receive designing programs on their own—at least for now. It is just a matter of time before edtech startups arise to do this job for future Laurie Pickards, again for a fraction of the cost.

Relying on reputation. Well-known business schools can take advantage of their brands, to the point that they might consider limiting online access to their content. In other words, rather than providing premium content for low or no cost through MOOC platforms or other channels, business schools might once again offer their courses only to tuition-paying participants. From my experience as a business school dean, however, I think this would be a short-sighted strategy. Limiting professors in their possibilities to show their teaching skills to a large-scale audience would be comparable to telling them that they cannot sell their textbooks on Amazon—in a digitally transformed market, such limits are hardly feasible.

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As the decoupling trend continues, it could represent serious competition for established business programs. For that reason alone, Pickard’s no-pay MBA is an indicator of possible digital disruption to come.

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Promoting faculty star power. Another sign of the sector’s digitalization is the rise of what I call celebrity teachers. In contrast to the already existing community of star researchers, these high-profile educators want to build their personal brands as teachers and consultants on the international market. Again, schools that try to protect their own brands by prohibiting their star faculty from showing their talents to the world might be confronted with those educators simply looking for other options, including working for MOOC platforms directly. 

If the strategies above are only short-term remedies, what solution do I think will work for the long term? Differentiation. Indeed, to counter the digital evolution of their sector, business schools must make it clear to the market what they stand for. They must convincingly explain why students should pay a high premium to complete an entire program at one institution.

Some establishments already are adopting this strategy. For example, my employer as well as alma mater, ESCP Business School, has committed itself to teaching intercultural management from its six campuses in Berlin; London; Madrid; Paris; Turin, Italy; and Warsaw, Poland. Aalto Business School in Helsinki provides students with multidisciplinary learning experiences and opportunities. Erasmus University’s Rotterdam School of Management in the Netherlands proclaims in its mission statement that it educates future leaders to become forces for positive change in a sustainable future. These schools have dedicated their missions to specific value propositions, in ways that set their programs apart from those of their peers.

Go Beyond Marketing—Build Community

Such differentiation must go beyond advertising campaigns. If schools claim that their faculty take an interdisciplinary approach to teaching and learning, they must demonstrate that most of their courses are interdisciplinary in nature. If schools claim to focus on sustainability and societal value, they must ensure that most institutional, academic, and operational matters at their campuses hinge on these topics.

By making such commitments, schools will have to drop some programs and courses in their portfolios that no longer fit their value propositions. Their leadership teams will have to make tough decisions that could mean cutting back on valuable revenue streams—or, even more difficult, offending some internal and external stakeholders.

As schools work to differentiate their positioning and brands, they can draw heavily on their assurance of learning activities for AACSB accreditation. Well-designed learning goals will help schools ensure that their curricula align with their chosen positioning. Even short continuing education courses should integrate at least an element that represents that positioning.

The academic curriculum is just the starting point. A school can encourage and convince faculty to align their research with its positioning, showcasing such work internally and externally as an added incentive. A school also can inform its stakeholders and other advocates of the brand positioning and let them know what message it would like them to share.

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Clear differentiation fosters strong attachments between alumni and their business schools. Those who join an educational community for its straightforward and differentiating positioning will feel as if they are part of its authentic mission.

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In other words, if you are leading a business school, you should view every activity as an opportunity to forge your school’s brand. In the end, employers will be the ones who decide if you have done a good job. Do employers know what your school’s brand stands for? Do your graduates perform better than others on the skills you promote? Are employers keen on hiring your graduates? If employers cannot see the difference between your alumni and Laurie Pickard, your school, and the higher education sector in general, might be in trouble. 

Clear differentiation doesn’t just help schools cut through the digital clutter. Its other advantage is that it fosters strong attachments between alumni and their business schools. Yes, when a school defines a distinct brand, it might lose some students who are not convinced of the value of that brand’s attributes. Still, those who join an educational community for its straightforward and differentiating positioning are likely to be more loyal. They will feel as if they are part of its authentic mission.

When alumni demonstrate high attachment to their alma maters, they are more likely to return as executive education students, lecturers, advisors, and donors. The stronger a business school’s community, the better the school’s future will be.

The Only Strategy That Works

To conclude, I should point out that the process of brand differentiation is not as straightforward as many might think. Alumni will need to be onboarded, especially if the current positioning deviates too far from a school’s past positioning. Faculty will need to agree to adapt and adjust their teaching and research. Employers must want to hire graduates with the skills the school emphasizes.

Furthermore, while a school’s leaders must suggest a direction, they must take a bottom-up approach to differentiation. It is the only strategy that will work over the long term. They must commit to transparency and openness, and they must be willing to engage in difficult conversations with all stakeholders.

But this process is worth it. If business schools want to remain visible and relevant in an increasingly competitive landscape, they must develop a unique selling proposition—and then stick to it.

The takeaway for business schools around the world: Differentiate yourselves to cut through the digital clutter.  

Kaplan is the author of Higher Education at the Crossroads of Disruption: the University of the 21st Century.