There was a terrific article in the NYtimes that says the way business students are taught may have contributed to the most serious economic crisis in decades. I think there are some truth in that statement. Think about it: when we are in b-schools, all we are taught is that "the new logic of shareholder primacy absolved management of any responsibility for anything other than financial results.” Is it any surprise then that we go into the real world focusing on shifting value around in attempts to maxmise shareholders' value while ignoring any real value creation?
One of the reasons that b-schools will not want to change the status quote is the profits they are getting out of running the same broken programme over and over again:
For universities, business education is a kind of cash cow. Business schools are less expensive to operate than graduate schools with elaborate labs and research facilities, and alumni tend to be generous with donations.
How then can we hack the business school system to make it better?
Transparency is almost always the cure of any closed system. Business schools are no exception. One of the interesting idea mentioned in the article is creating an index that ranks schools based on"how well they integrate social and environmental issues into curriculums". This is a great start but given the resistance faced by the survey, we need more grassroots actions. A RateMyProfessor equvialent to rate the programmes of business schools can be interesting.
Outside of the b-schools systems, there are acutally excellent resources on the new economics of businesses. One great example is of course Umair Haque. However, we need to create ways to magnify their voices so that diversed thinking can be encouraged. We all need to think beyond shareholders' value.
(Note: Ethan Burley tweeted a similar thought here)
Create new ways of verification
One of 'benefits' of MBAs is not the course content but the networks and branding that the certificate brings. However, the economics of interactions has now diluted the power of such signaling. The fact that we can now blog, comment, tweet, chat, contribute etc on the Web means we need less certificates to inform the market of our true value. What is more important going forward is to think of ways to measure and capture our social capital that online interactions have bought us.
A powerful last quote from the article as a departing note:
Instead of being viewed as long-term economic stewards,.... managers came to be seen as mainly as the agents of the owners — the shareholders — and responsible for maximizing shareholder wealth
Thoughts on hacking legal
Thoughts on hacking finance