STRATEGIC THINKING FOR THE MBA STUDENT

One of the topics we encourage with our MBA students is strategic thinking. To be a good strategic thinker, one must not only anticipate likely problems to be faced in the future, but also determine how best to position your business to take advantage of what you predict is likely to happen.

There are a number of interesting technology issues on the horizon that will get confronted in the next 2-5 years. If you want to test your strategic thinking capability, decide where you think the technology issue below is headed. Then think about the impact it will have on your current organization and the possible positioning you might recommend to your company to leverage where you think things are headed.

The issue is privacy. At one end of the spectrum are consumers who are struggling to protect their online privacy and personal data. At the other end are companies whose business it is to collect data about consumers and track their online behavior in order to sell them things directly or sell their names to companies who will turn around and sell them something. Currently, rules for monitoring online behavior are only loosely defined. Expect some significant revisions in the antiquated Electronic Communications Privacy Act of 1986 as well as additional privacy legislation that addresses how internet data can be collected and/or sold. The strategic thinking exercise is what that legislation will look like.

A good example of how things can change overnight is the Driver’s Privacy Protection Act of 1994 (commonly referred to as DPPA). Prior to this legislation, consumers had to “opt-out” to prevent their personal data from being accessed by marketers. Typically, less than 2% “opted-out” meaning that consumer data was generally available to anyone who wanted it on everyone who owned a motor vehicle in the U.S. After passage of DPPA, consumers had to “opt-in” for their information to be accessed. Guess what? Less than 1% opted-in and practically overnight, easy access to information gathered by state DMVs was eliminated.

Here’s another privacy related question: how would you feel about losing a juicy contract or promising job based upon something you posted on Facebook or information obtained by “Googling” your name? Think that’s a stretch? Don’t kid yourself. A study just conducted of college admissions officers indicated nearly one-third checked Facebook and Google as part of their applicant review process and 35% of those doing so found material that negatively impacted how they viewed the student!

By the way, once you figure out privacy, there are a few others technology issues on the horizon as well: piracy, cybersecurity, and STEM education. But that’s another day….

TWINKIE

All the news about Hostess these past few days reminded me of a close friend who purchased a dog for his daughter when she had just turned 4 years old. He told me as he drove home with the puppy that he was thinking of naming the tiny white Bichon Frise Fluffy or maybe Snowy. His wife preferred the names Casper or Snowflake. But when he walked in with the puppy under his arm, his daughter immediately ran to him jumping up and down shouting, “Can I hold Twinkie?” According to him, no other name stood a chance after that.

So when I read that the last ditch mediation session ordered by U. S. Bankruptcy Judge Robert Drain for Hostess and its Bakers’ Union had failed, that liquidation for Hostess might be imminent, and Twinkies might be history I had a brief, reflective moment about Hostess Brands the company, Twinkie, my friend’s daughter’s dog, and what it all might mean.

Well, to start with it was going to mean a high likelihood that 18,000+ Hostess jobs were going to be lost. Unfortunately, even though Hostess had $2 billion in revenues, it was suffocated with $1 billion in debt.  Hostess was also saddled with anachronistic pensions, manufacturing facilities that were significantly outdated, and a highly distrustful workforce. I remember reading this summer that Hostess had announced that without an agreement from both its major unions, The Teamsters and Bakers’ Union, it would be forced to cease operations. I wondered at the time if they were posturing or whether it was a real threat. The Teamsters did agree to meaningful wage cuts (nearly $200 million) but the bakers decided to fight. Thus, the showdown developed. It also likely means that most of the cash that’s been pumped into Hostess over the past couple of years from the outside (like $130 million) is “down the drain” (no pun intended on the Bankruptcy judge).

What are the major lessons we can learn from Hostess shutdown? Well, first and foremost, bluffing has its risks. The Bakers’ Union undoubtedly thought that Hostess wouldn’t take the drastic steps of bankruptcy and subsequent liquidation as Hostess management had backed down from the bankruptcy threat late in the summer. At the same time, Hostess management probably felt that since The Teamsters had agreed to a restructured deal, the Bakers’ Union would be close behind. Both were wrong. Second, my best guess is that the Twinkie brand will somehow survive. After all, they produced like 500 million of them last year (how many of you would have guessed that number??). Twinkies will probably look exactly the same even though someone besides Hostess is making them.

So where does that leave my friend’s daughter’s dog? Well, Twinkie passed away a few years ago but I am told he was a great family pet. Of course, this wouldn’t have been nearly as good a story if my friend’s daughter had run up and shouted, “Can I hold Ding-Dong?”

PROCESS INNOVATION

Malcolm Gladwell calls that threshold moment where an innovation boils over to mainstream The Tipping Point and he wrote a national bestselling book on the topic several years ago. Process innovation is the implementation of a new or significantly improved production or delivery method. Examples of famous process innovations are factory to consumer delivery of custom-built computers by Dell and the use of barcodes, scanners and the Internet to allow customers to track parcels in real time as they are being transported.

There are some fascinating things being introduced into the MBA admissions process that might potentially fit in the process innovation category. For example, Duke’s Fuqua School of Business has a required “25 Random Things” list that is supposed to be a numbered, top 25 inventory of an applicant’s passions, personality, quirks, hopes and fears. Admissions uses this additional “tool” to differentiate among applicants.

Wharton, because its MBA program involves multiple team interactions throughout the two years of coursework, has just recently introduced a “team interaction” exercise as part of the admissions process. The most promising Wharton applicants are invited to participate in a discussion with 5-6 other applicants who then work as a team to brainstorm a solution to a real-world business scenario. This interaction is viewed and assessed by trained facilitators from Wharton’s admissions office and becomes a part of the applicant’s admissions file – another process innovation tool to differentiate applicants.

The University of Chicago’s Booth School of Business, UCLA’s Anderson School of Management, and NYU’s Stern School of Business accept PowerPoints, multimedia, and art in an attempt to differentiate potential applicants.

What’s process innovation at UHD? To apply to our MBA program, all you need are three years of work experience after completion of your undergraduate degree, your GMAT score, and two professional references.

We think it doesn’t get any easier than that……

THE CHICKEN SANDWICH: SALAD OR “GRILLED”

My daughter was home from college last weekend and she and I went to lunch on Saturday. She's nearing the end of her undergraduate architectural degree and is considering continuing on for either an MBA or Masters in Architecture.

Not long after our sandwiches arrived (in fact, I hadn't even gotten a bite of my chicken salad), she started asking questions about our MBA program. "Dad," she began, "How many hours/classes are in the UHD MBA program?"

"Thirty-four," I sort of mumbled because I had finally taken a bite of my sandwich and my mouth was full.

"Thirty-four classes?" She was clearly shocked.

"No, no," I said crunching a salt and vinegar chip, "Not thirty-four classes -- 34 hours."

"Wait a minute," I could see her mind calculating. "Thirty-four isn't divisible by 3. Are some of the courses more than 3 hours??"

I was able to reply a bit more clearly since I had swallowed my mouthful. "No, all of our classes are 2 credit hours and you need 17 classes to complete our program."

"That's a little strange," she began. "None of the other MBA programs I'm considering or have looked into have 2 hour courses. What's the thinking behind that?"

"Pretty simple," I said. "The goal of our MBA program is probably a little different from most. We want to produce general managers not individuals who are functional specialists. For this reason, we wanted to communicate to our faculty who were delivering the MBA program that they should strip down the content within their courses to specific material of high value to general managers. Thus, 2 hours, not 3."

"Whoa, I thought you told me these were all night classes," now she was in high gear. "If that's the case, won't it take like 3 years to finish the degree?"

"Not at all. Our MBA can be attained in 2 years or less. We do 8 week classes in a hybrid format -- that's 2 hours in class and 2 hours outside of class per week per class and allows you to complete 4 courses per semester."

She was mulling that over so I thought it was time for a father/daughter moment. "Honey," I started, "if I knew you had so many questions about our MBA program, I would have ordered the grilled chicken..."

I thought it was an extremely humorous moment but she didn't even crack a smile. What do fathers know?

MBA ROI

Last week I had 3 prospective MBA students in my office asking about a quote from our MBA brochure that states “MBA graduates expect salaries more than 45% higher than candidates with an undergraduate degree alone.” They were curious about two things: (1) could they expect an immediate pay raise once they completed their MBA program; and (2) if not, what was my advice to them regarding their leveraging of their potential MBA into a higher salary?

“Well,” I started, “I hope you’re not thinking about entering our MBA program solely for the 45% pay bump!” There was some perceptible uncomfortable shifting that took place after I said this and I purposely let it sit on the table for a moment before forging ahead. “MBA programs have at least two distinct models. Model 1 is a day program where you are expected/required to be a full-time student and not be working a traditional job. Model 2 is a night or weekend program that is designed for working professionals, i.e., people who are working full-time. UHD is Model 2 all the way.”

“I will tell you this,” I continued. “Organizations don’t always immediately appreciate an educational upgrade particularly if the upgrade takes place during your employment tenure. In other words, organizations form perceptions about you based upon your qualifications and education when you are hired. These perceptions are not easily altered regardless of training and/or education you receive while on the job. Here’s some personal experience for you – when I entered my Ph.D. program, I was a “peon” graduate student. My dissertation chairman to this day still sees me as his graduate student without regard for my progress and accomplishments. It’s just human nature. My point is that new qualifications/education are usually best appreciated by those who meet you after the upgrade.”

“One last thing for you to consider,” I plowed ahead. “A couple of years ago, Robert Barro from Harvard and Jong-Wha Lee of the Asia Development Bank conducted an in-depth study on the ROI of a year of graduate school education. What they found was an average return of 17.9%. So while you’re thinking about that 45% raise, compare that 17.9% return to the ROI from investing in real estate, bonds, stocks or almost any other asset class.”

“You’re investing in yourself and the rewards of that investment will be with you for the rest of your life,” I finished.

They filed out quietly but I could see I had struck a chord….

IS AN MBA A GOOD INVESTMENT?

You might recall that a few months ago, my wife and I had dinner with two of her close friends and their husbands – a plastic surgeon and a lawyer. The conversation revolved around the plastic surgeon’s son Ross who was contemplating entering an MBA program, and whether this was a good career move (see my blog post from 1/19/2012 entitled WHY PEOPLE GO INTO AN MBA PROGRAM).

Well, I am pleased to report that we had dinner with the two couples again last weekend and we barely had our napkins in our laps before the plastic surgeon was firing away. “Well, Don,” he started, “Ross starts his MBA at Northwestern in a few weeks thanks to your comments at our last dinner. But you know what?” (He didn’t wait for an answer). “A close friend of mine told me two things I’d like your reaction to – first, he said the MBA was a dying degree; and second, he said besides that it had a negative ROI, i.e., it wasn’t worth getting from an economic standpoint.”

“How long do I have to answer,” I asked. “Until the hors d’oeuvres arrive or the main course?” Everyone laughed in a sympathetic ‘Hope you can answer those loaded questions’ way.

“Let me address the ‘dying’ degree first,” I began. “Here’s a macro perspective for you. In 1960, about 5,000 MBAs were awarded; in 2000, about 100,000 and this year nearly 160,000 will receive an MBA. Further, 300,000 people will be enrolled in MBA programs this year. More people are seeking an MBA than any other graduate field. As a reference point, the number of MBAs awarded last year was 3x the number of undergraduate engineering degrees. Hardly the statistics of the dying….”

“Now does this mean there are never any hiccups? Absolutely not. About every 10 years, there have been slowdowns/declines in the growth of graduate management education. There’s a famous Wall Street Journal article in 1985 that reported that perhaps 25% of business schools would have to close because of low application rates. In the mid-1990s, there was a New York Times article with the headline ‘Business Schools Hit Hard Times Amid Doubt Over Value of MBA (No, I’m not answering your 2^nd question yet). In 2005, Business Week reported a drop of 30% in applications to MBA programs since 1998. And so forth. So I won't argue that there have been some high profile negative reports but it's like the stock market -- you can focus on the few crashes or look at the long term picture.”

I buttered a slice of bread to let all that sink in and then continued. “As for ROI, Forbes reported just last year that the ‘investment’ one makes in an MBA (including tuition and forgone salary) is typically paid back in less than 4 years. One of the reasons for the rapid payback is that MBA graduates often receive starting salaries 50% higher than their salary prior to enrolling in their MBA program. Not exactly what I’d call either negative ROI or a bad investment.”

The plastic surgeon had a rather dazed look on his face but I didn’t miss a beat. “You know, Richard, if I could paraphrase Mark Twain ‘The rumors of the death of the MBA have been greatly exaggerated’.

When the bill came, I was about to reach for it when the plastic surgeon’s wife said, “Richard, you owe Don dinner for making him answer all those silly questions.”

Speaking of a good ROI, that steak dinner was a pretty nice return on my one hour reading investment….

TO EDUCATE OR NOT EDUCATE: THAT IS THE QUESTION

One of the popular debates these days is whether a college education is the right choice for everyone enrolled in degree granting institutions. The arguments go something like this:

PRO:

1)      College graduates earn significantly more money than high school graduates (2x);

2)      The majority of jobs today require technology and social skills – the “stuff” you learn in college;

3)      Higher education is the foundation for change in later life (i.e., it prepares you for a life where career change is increasingly likely).

CON:

1)      There are more graduates than jobs in the higher paying managerial, technical, and professional occupations to which college graduates aspire;

2)      A large percentage of full-time students (40+%) who enter four-year college programs fail to have their degrees within 6 years (there are many universities where the graduation rate is less than 30%);

3)      There is nearly $1 trillion in college debt outstanding, hanging like an albatross around the necks of would be innovators and entrepreneurs;

4)      As the proportion of Americans “expecting” to attend college rises, the value of a college education decreases (I call this the “Audi” phenomenon. Many of the early Audi owners liked their vehicle because everyone didn’t have one.  As the Audi brand became more popular and they were more visible, some of the early owners defected to less “mainstream” brands).

My personal opinion is that college is a path that every American should be able to walk down if they so choose. Evaluating the costs and benefits of this path, deciding what to do in life, and asking what knowledge and skills are required should be an individual’s choice not dictated by an outside group or individual.

If the conclusion is that higher education is overpriced, let’s work on lowering the cost of education not limiting who gets it.

INTEGRITY

Annually, Warren Buffet sends a letter out to each of his CEOs that outlines his expectations for the upcoming year. Interestingly, his letters always begin with the same message: “We can afford to lose money. We can afford to lose a lot of money. But we cannot afford to lose one shred of our reputation. Make sure everything you do can be reported on the front page of your local newspaper….”

I was talking recently with a group of UHD faculty who were lamenting the fact that it seemed some students had been able to purchase the test bank for a textbook currently utilized in a required class at UHD. “What is the world coming to?” they were asking.

I had another professor relate an incident to me that occurred during an exam in his class this past semester. He had stepped out of the room briefly. While he was gone, a student called out the answer to one of the questions on the exam. One student remained behind after the exam and reported the incident. There were 3 distinct breaches of integrity within this incident. The first, and obvious, was the calling out of the answer. Less obvious were the other two – a) those who benefitted from the information called out; and b) those who didn’t report the incident.

While this situation was a potential violation of the academic honesty policy, the professor decided there was a lesson in ethics and integrity to be taught. He therefore sent a note to each student outlining his expectations of their ethical behavior and how trustworthy behavior creates a bond. He then asked each student to own up to any breach of integrity that had occurred during the exam and outlined the penalty for each breach. The professor, of course, knew who had called out the answer and who hadn’t reported the incident. But approximately 50% of the class admitted to using the information that was called out. There were several students who exerted pressure on their classmates to “do the right thing”. The student who had called out the answer asked to speak briefly to the class and apologized to each student for putting everyone at risk with his inappropriate behavior.

Ethics is a tricky subject. The guide for “what’s right” isn’t always published in black and white. In fact, what’s right is often defined in the “eyes of the beholder” or popularity or convenience. And as the above example shows, peer pressure is often as impactful as any other influence.

Integrity isn’t something to be affirmed once and forgotten. It’s more like a marriage vow – not frequently mentioned but always there….

REALITY BASED BUSINESS EDUCATION - MORE THAN A SLOGAN

A couple of days ago, I read with considerable interest the Associated Press' story regarding new and upcoming college graduates. According to them, the data is pretty dismal if you've recently graduated from college -- 53.6% of bachelor degree holders under the age of 25 are jobless or underemployed. And the forecast for the future is even more bleak. As reported by the AP, for the 30 occupations with the largest projected number of job openings by 2020, only 3 (10%) will require a bachelor's degree or higher to fill the position. These three are teachers, college professors, and accountants. Many graduates are saying, "Everyone is telling you to 'Go to college' but when you graduate, it's sort of an empty cliff." There is a growing feeling that the choices one makes about level of schooling, your field of study, where you attend college, and how you pay for it are significantly more important decisions than they have been in the past.

 

The UHD College of Business annually surveys our graduates on precisely the information outlined above and I am happy to report that based upon our responses, about 62% of our graduates over the past 5 years feel they are in either: a) a career track position; or b) a position that will serve as a "springboard" to other possibilities. Another 26% reported receiving a promotion after obtaining their UHD business degree (because many of our students are already employed full time when they enroll and pursue their UHD degree). Only 7% responded they were underemployed. The balance were pursuing graduate degrees (probably in our new MBA program!!).

 

Maybe the AP should do a little investigation of UHD's College of Business "Reality based business education". Our graduates will tell you straight up that it's where 'the rubber meets the road'.....

 

THE MBA AND PRECHECK/GLOBAL ENTRY

After 9/11, the security screening protocol at our airports understandably increased dramatically. And until recently, there was no such thing as "getting through an airport" rapidly. In fact, most travelers characterized their interaction with the Transportation Security Administration as a low satisfaction/necessary evil encounter.

Last week, I was visiting one of our Alums in Minneapolis-St. Paul and I noticed a couple of travelers seemingly zipping through security screening. They got through so fast that I was actually somewhat alarmed -- they didn't remove their shoes or belts, their jackets, or even their computers. When I asked about it, I was told it was TSA's expedited screening called "Precheck". If you're a qualified frequent flier, meet a few undisclosed TSA criteria, get invited in by select airlines, and are willing to cough up $100, you're in. Oh yes, there's one other way to get in -- our Customs and Border Protection unit has a program called Global Entry that allows selected, approved international travelers to avoid long lines and hassle by utilizing a kiosk to enter a country. If you happen to be part of the Global Entry program and have a GE number, you can use that to get into Precheck.

"Pretty ingenious," I thought because I take special pride in avoiding bureaucracy. For example, to apply to get into our MBA program, you only really need 4 things: (1) an undergraduate degree and about a 2.8 GPA; (2) a reasonable GMAT score; (3) three years of post baccalaureate work experience; and (4) 3 business references. That's UHD's version of Global Entry and Precheck.

I was chuckling to myself thinking about how easy it was to apply to UHD's MBA program when a TSA agent snapped me back to reality. "Sir, you need to remove your shoes and belt and step ahead for a full body scan."

What's the world coming to when it's easier to get in an MBA program than get through airport security?

THE MBA DEGREE – A PRIME EXAMPLE OF DEFERRED GRATIFICATION

Yesterday, I had two of our current MBA students in my office regaling me with the amount of time their studies were taking away from their jobs and their families. One of them said, “I barely have time to sleep most weekends I have so much schoolwork.” I didn’t tell either of them that back when I was a graduate student, I had once told one of my professors, “After my coursework, about all I have time for are church and sleep.”

The time crunch of a graduate business program reminded me of one of my favorite pieces of research conducted by Walter Mischel at Stanford in the early 1970s who devised a rather ingenious experiment with young children and marshmallows.  Here’s how it worked. Each child was seated at a table and a marshmallow was placed in front of them. The child was told that if they were able to wait 15 minutes before they ate the marshmallow, they would get a second marshmallow to eat as a bonus reward. Approximately two-thirds of the kids failed to wait the 15 minutes for the bonus marshmallow, i.e., they were unable to “defer gratification”. Interestingly, among the many studies of individuals and success vs. failure, one factor has always emerged – those who can’t defer current gratification tend to fail.

If you watch the videotape of the kids with the marshmallows, you see all sorts of behavior. Some kids pop the marshmallow in immediately with no waiting; others struggle a bit before succumbing; a few kids are in obvious agony trying to make the 15 minutes -- even banging their little heads on the table. But the simple results of the experiment were this -- one-third got the extra marshmallow and two-thirds didn’t.

Fast forward a few years and that’s when it really gets interesting. When researchers followed up with the marshmallow kids several years later, here’s what they found: if you were in the group that waited and got the second marshmallow, guess what? You scored about 200 points higher on your SATs, were less likely to drop out of college, made a lot more money, were less likely to go to jail, and had fewer drug and alcohol problems. In short, those who waited for the extra marshmallow not only looked more successful, they were more successful.

As the Mischel story flashed through my mind, I thought briefly about explaining to the two students in my office that getting an MBA, while difficult in the short run, made life a whole lot easier in the long run by opening up opportunities for more challenging jobs in the future – sort of a prime example of deferred gratification. I wanted to leave them with a few choice words that would have a big impact on their thinking down the road.  

Instead, my mind drifted back to when I was the graduate student in my professor’s office and I had just uttered the words, “….all I have time for are church and sleep.” His response was pretty straightforward (and I still remember it like yesterday) – “Well, if you think you need more time, maybe you ought to start sleeping in church…..”

WHY ALL GOOD MBA PROGRAMS HAVE AN “EXPERIENCE” REQUIREMENT RULE

When I was about 10 years old, there was a kid who lived down the street from me named Bill Gardner. I think in modern day parlance, Bill would be called a “geek” or a “nerd”. Back in my day though, he was just “a little strange”. But quite by accident, Bill taught me an important lesson about rules and authority that I still use today. Here’s how it started.

I wanted a new bike and approached my parents to “negotiate” the purchase. I thought I had just the argument that would win them over. So when Roscoe, my father said, “No new bike now and no new bike anytime in the near future – new house rule,” (and by the way, he and Lois, my mother, exchanged satisfied looks of complete agreement while he was saying this), I brought out what I thought would be my ace and said, “Well, almost everybody I know has a new bike.”

Instead of our piling in the car and heading to the bike shop, my father looked at me sternly and said, “Well, you’re not everybody, mister.” I started back to my bedroom with my tail between my legs, completely deflated and I just looked back at the two of them and said, “You know, Bill Gardner has a new bike.” In an instant, I saw my parents exchange a glance of discomfort and hesitation and I realized immediately (as only a 10 year old can) that I had struck a nerve. “Yeah, he rode it to school and parked it right next to my piece of junk bike. You guys probably have never been embarrassed by somebody like Bill Gardner.” I won’t bore you with all the lurid details, but safe to say, I had a new bike later that afternoon and a new arrow in my quiver to question rules. I decided that rules need reasons but those reasons are certainly open to question.

Hardly a day goes by that I don’t receive one or more queries about our MBA experience “rule”. The rule is simply this: entrance to our MBA program requires 3 years of post-baccalaureate business experience. Here are the reasons for the rule. First, it turns out that the most important attribute to students in MBA programs is not the professors, not the perceived quality of the school, not the curriculum but rather the quality of the students in the program. One of the key components of student quality is (you’ll never guess) – business experience. Second (and this goes along with the first reason), the MBA is an applied degree, i.e., while there is a theoretical foundation, maximum benefit accrues to someone with an experience base (i.e., management experience). And lastly, for those who think that the argument “No other MBA programs have experience requirements,” holds water, I would challenge you to find any quality MBA program without an experience requirement.

About a month ago I was talking to my mother (my father passed away about one year ago) about her staying with me in Houston this winter where it’s a little milder than in Illinois where she lives. She politely declined this year saying the trip was too difficult for her. “But, mom, almost all of my friends in Houston have their parents visit them in the winter. You want me to be the only one without parental visitation?” My mother didn’t miss a beat and replied, “Well let me know if Bill Gardner’s parents visit him this winter.”

And here I thought all these years that I was the only one who had learned something from the Bill Gardner angle…..

HOW DO YOU GET THE NON-BUSINESS UNDERGRADUATE READY FOR THE MBA?

Context is a funny thing. I remember a teacher I had who once explained context like this: she said, “If two people are talking, and one casually points to a tree outside commenting, on say, its size or height and the other person, as they look at that same tree, recalls when they were 10 years old and fell out of a tree and broke their arm, that tree has a totally different context for those two individuals. One is simply pointing the object out; the other is vividly associating the object with a personal experience. I had another teacher with a little more direct definition – context is two or more sets of eyes looking at the same thing and drawing different conclusions.

I provide those examples as a backdrop to the discussion that we had regarding a key element of our MBA program. Many graduate programs only attract students who already have a base level of knowledge in the graduate subject area. The MBA degree, as its name suggests, is a graduate program in Business Administration. The difference in the MBA and many other graduate degrees is that the MBA attracts a widely divergent body of undergraduate degrees. The reason for this is fairly simple. Chemists, engineers, physicists, physicians, designers and so forth, while professionals in their own right, typically have to function as part of a profitable business. The MBA is typically designed to produce leaders/general managers who can guide a business both strategically and profitably. Many professionals want the value of an MBA but don’t have the undergraduate background that a business major would have.

How does one insure that all these divergent backgrounds mesh in the classroom without placing non-business undergraduates at a distinct disadvantage?  Everyone agrees that non-business undergraduates need to be brought up to speed but the issue arises as to what this “up to speed” training should be called. Here’s where context comes in. I had one group who suggested we call these classes “BRIDGE” classes (because they bridged the gap between undergraduate and graduate knowledge). I had another group who liked “COURSE IN A BOX” because it sounded like something that stood alone. A third group just liked “PREREQUISITES” or “MBA PREREQUISITES” because that sounded like something that needed no further explanation. There was considerable debate about which of these three names had the proper context for what we were trying to convey.

Midway through this debate, my youngest son and I were discussing why he needed to mow our lawn on a regular basis. This task seemed to highly interfere with his pursuit of video game technology. “You never made my brother mow the lawn,” he reasoned, “So why start with me?” I was about to vigorously explain labor economic theory to him when he interrupted me with “That’s not a fair leveling of the playing field if I have to do things my brother didn’t.”

The next day I suggested LEVELING classes as the name for our MBA classes required of non-business undergraduates and everyone immediately liked the name. It contextually fit.

By the way, I’m sure you’ve probably already figured this out, but my son doesn’t mow the lawn. After all, a good idea has to be worth something….

INNOVATION AND THE MBA

Steve Jobs’ death recently from pancreatic cancer reminded me of a favorite quote of his that has always resonated with me. The quote is, “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

Focus groups are highly popular marketing tools. Many are done completely online now. But the whole point of innovation is somehow understanding what a consumer needs out in the future – not what they need now. Wayne Gretsky, the hockey great, had his own unique sports take on the concept of innovation in describing how he thought about the game of hockey and how he played. He always said, “I skate to where the puck is going to be, not where it is now.”

I was talking with a group of prospective MBA students last week when the question arose, “What, if anything, makes the UHD MBA program innovative?”

“Hybrid classes and 8 week terms,” I quickly responded and then saw a look of puzzlement on most students’ faces. It turned out that none of them had ever taken a “hybrid” class before or even knew what it was. The discussion that followed focused on the difficulty in balancing a career, a family, and the desire for more education. Traditional MBA programs create significant stress for students and their careers/families because of the “time element” involved in preparing for and attending 4-5 classes during a semester. Hybrid classes at UHD only meet one night per week from 7-8:50PM with the remainder of the classwork completed in an online format. The 8 week concept allows students to focus in-depth on just a couple of classes at a time rather than the larger block of 4 or 5. The group of students quickly understood the flexibility of this format in managing their careers and family lives.

Hybrid classes and 8 week terms are innovations for MBA programs – “career friendly for working professionals” – UHD’s equivalent to “skating to where the puck is going to be”. Funny thing, though, none of the faculty has started calling me Dean Gretsky....

WHO REALLY NEEDS AN MBA?

If you will recall, my last blog recounted a conversation I had over dinner with a couple of professionals and their wives about the merits of an MBA for one of their sons. What follows is a slightly different angle and exchange on the same subject.

I was at lunch the other day (I try not to miss too many meals) with three graduates from our undergraduate business program, all of whom were successful 30-35 year olds. One of the three was contemplating an MBA degree to “further her education” and was asking some general questions about our new program.

She was interrupted by one of the other two who laid the following egg/statement on the table: “An MBA is for someone who doesn’t know what they want to do, hasn’t made it yet, and/or has money/time to burn. Bill Gates (Microsoft) and Larry Ellison (Oracle) didn’t need business school, Zuckerberg (Facebook) and Jobs (Apple, Pixar) dropped out of college, and Brin and Page (Google) dropped out of their Ph.D. programs in computer science at Stanford (they didn’t have MBAs) – all to start successful companies. So, therefore, why does anyone need an MBA?”

As I looked around the table, all eyes were on me wondering, I suppose, how I would respond.

“Well, there are two important dimensions to your question,” I began, “And they both need to be addressed. First, you are absolutely right. There are several high profile CEOs who don’t have MBAs and you’ve named most of them. These are the Kobe Bryants and LeBron Jameses of the business world. Most NBA players go from high school to college and play at least a year or more before going to the NBA. Less than 10% of all NBA players come directly from high school to the NBA. Kobe and LeBron, however, did just that and have been pretty successful.”

“The other side of the equation is this: of the 100 largest, most successful companies in the U.S., 42 are run by CEOs with MBAs. In fact, the MBA is 5x more prevalent than the next closest degree (JD [law]). CEOs with MBAs include Jeff Immelt at GE, Phil Knight at Nike, Warren Buffet at Berkshire Hathaway, and Indra Nooyi at PepsiCo, just to name a few. So if your goal is to ever run a successful company, an MBA is one of the best investments you can possibly make.”

The woman who had been asking the original questions sort of laughed and said, “Well, I’m not Kobe or LeBron, so I’ll be applying.” Two days later, I had a follow-up email from the graduate who had asked “Why anyone needed an MBA”, thanking me for my time at lunch and asking if I could talk to the MBA Admissions Committee on his behalf. He had also decided to pursue an MBA.

So, contrary to what my wife likes to tell me, conversations over lunch sometimes do make a lasting point…..

WHY PEOPLE GO INTO AN MBA PROGRAM

I had dinner the other night with two of my wife’s close friends and their husbands whom I’ve met a couple of times but hadn’t seen in several months. One husband is a plastic surgeon who seems like he’s always in the operating room and the other practices law. I think the last time we got together, the lawyer told me he was involved in six separate ongoing litigations. He said he barely had time to sleep.  Both husbands knew I was Dean of the College of Business at UHD but in our previous encounters, most of the conversation had centered around their busy practices and lives.

Well imagine my surprise when the surgeon announced that his son was starting an MBA in the Fall and how disappointed he, the father, was that his son was taking this educational route and who in their right mind would sign-up to take a bunch of on-line “how to manage” courses from a group of college professors far removed from the real world?

The lawyer looked directly at me and quickly asked, “Aren’t you guys starting an MBA program?” and when I stated that, “Yes, we were about to launch our MBA,” he asked, “Do you think Ross’s (the surgeon) son is making a mistake?”

I was about to jokingly say that Ross’s son’s MBA was probably just a precursor to medical school but I noticed that all the side conversations had stopped abruptly and, in particular, Ross’s wife Jeanine looked troubled by what her husband had said and it was suddenly obvious to me that they had had a serious argument about their son’s career direction.

“I’ve been involved in four different MBA programs,” I started, “And there are just a few reasons people want this advanced business degree. MBA programs are the incubators and proving grounds for best future business practices and being a part of this ensures the participant an opportunity to be at the forefront of a better world, society and economy. At the same time (and I looked directly at both the surgeon and lawyer), many fields are becoming more restrictive and there is considerably less opportunity to be your own boss and/or run your own company (I learned later that the surgeon had just joined a large hospital group while the attorney’s firm had been purchased by a large national firm and he had gone from being 1 of 45 to 1 of 375 litigators). MBAs are heavily indoctrinated in entrepreneurship and many graduate and start their own businesses. Today’s youth is a lot more interested than their parents were in having control of their future and their time by being their own boss and being able to spend time with their families.”

Everyone was listening now. “And regardless of what you think,” I continued, “Our free market system is the best in the world and there are few barriers to prevent good people from moving around with relative ease. An MBA might also fit for the “do-gooder”, the person who wants the world to be a better place and wants to make a difference. Business Schools are doing research and leading the way toward best practices in areas such as the environment and diversity. But above all, an MBA prepares a person to think critically, assess and take risks, make decisions, evaluate uncertainty, and work closely with other people.”

Jeanine had a little smile on her face and I could see that Ross was thinking about what I had said so I added, “Oh, yes, and I forgot to mention, all that time they spend on Facebook --- we teach them how that translates into valuable customer relationships!!”

Ross seemed to be at a loss for words so I just asked for the check….