The Problem with B-Schools is the Problem with Business

The New York Times’ business section yesterday published an article by Kelly Holland (perhaps her best yet) titled, Is it Time to Retrain B-Schools?

The putative answer was ‘yes,’ and I agree. But what does that mean? From the article:

“It is so obvious that something big has failed. We can look the other way, but come on. The C.E.O.’s of those companies, those are people we used to brag about. We cannot say, ‘Well, it wasn’t our fault’ when there is such a systemic, widespread failure of leadership.” Ángel Cabrera, Dean,Thunderbird School of Global Management in Glendale, Ariz.

“We lived through an enormous extended period of financial good times, and people became less focused on risks and risk management and more focused on making money. We need to move that focus back toward the center.” Jay Light, Dean, Harvard Business School

“The schools suffer from an overemphasis on rigor and an under-emphasis on relevance. Business schools have forgotten that they are a professional school.” Warren Bennis, USC Business School and noted leadership author.

“A kind of market fundamentalism took hold in business education. The new logic of shareholder primacy absolved management of any responsibility for anything other than financial results.” Rakesh Khurana, a professor at Harvard Business School

“Business creates value in terms of services and products. That’s what business delivers, just like medicine delivers a healthy person.” Sharon M. Oster, Dean, Yale School of Management.

“There are extraordinary things taking place in business education, and a lot that is very promising. But what’s the central theorem of business education? It’s wanting.” Judith F. Samuelson, Exec. Director, Business and Society Program, the Aspen Institute.

The bookend quotes have it right. Cabrera when he says there’s an obvious problem, and Samuelson when she says the central theorem of business education is wanting.
Those in the middle, IMHO, are not yet at the core of the answer.

So here’s my take.

The first post I ever did in this blog—October 2006—was looking back from a 30th reunion at Harvard Business School. It was about this very point, and I think it holds up. Here, in part, is what I said then:

The biggest single characteristic of business in future is that everything is getting connected. In a connected world, a focus on competitive relationships isn’t useful. What we need is an emphasis on connectivity, trust and collaboration.

HBS needs to teach less competitive differentiation and more collaborative value-adding; less how to win supply chain negotiations and more how everyone gains by operating them as a system; less about transactions, more about relationships.

We don’t need more ethics courses—we need an ethos of business itself.

Last I looked, the ethics course at HBS teaches a “balanced” approach to three spheres: competitive, legal, and social.

Meanwhile, down the hall in the core strategy courses, those same students are taught that business at its core is about corporate competition. To define strategy that way is to define ethics as a branch of strategy—how to steer the corporate ship between the Scylla and Charybdis of the law and society.

In that Hobbesian world-view, there is no room for an Other. And where there is no Other, There Just Cannot Be any such thing as “ethics.” “Business ethics” is become an oxymoron.

There can be no ethics until “strategy” reclassifies customers, suppliers and employees as co-equal with shareholders—rather than as categories of “competitive forces.”  Which is exactly what is taught now, and which lies at the heart of the matter. 

The solution doesn’t lie in Dean Oster’s redefinition of value; nor in Dean Light’s move back to the balanced risk center. Nor even in de-emphasizing shareholder value.

The solution lies in modernizing our ideas of how business actually works. Away from an ideology of corporate competition forged in the past. Toward recognizing the collaboration of many in the pursuit of commerce that is fast becoming reality today.

Collaboration is the new competition. We are not isolated anymore. We are all linked. It’s a fact, and one that our mental representations need to catch up to.

We can no longer afford competition-centric thinking—neither in business, nor in the b-schools.