It is clear that four major forces will shape the future of business schools over the next five, ten or 20 years. The first issue concerns public funding. This is becoming more difficult to obtain as governments have less money to spend, at least in some parts of Europe. As a result some schools are having to merge, as we have seen already in France for example.
The second issue is demographics. Europe and Japan in particular face the challenge of an ageing population. When you want to predict the future, the only sure thing is that tomorrow you will be older than today. Similarly, you only have to look at demographics to know that some countries are going to face problems.
The third challenge is economic. Problems in Spain, Italy, Greece, Cyprus and elsewhere are seriously affecting job opportunities for business school students and participants.
The fourth factor is technology, and this will become even more important in the future. We all know that e-learning will be a massive challenge as well as a huge opportunity for business schools around the world. ‘MOOCs’ (massive open online courses) are an interesting phenomenon, and e-learning could reshuffle the cards in a way that may well change the fate of a number of schools.
Technology will most likely mean that an increasing number of competitors enter the management education market, particularly executive education. And there will be a new type of competitor that approaches companies with executive education ‘solutions’ and says: “You don’t need to send all your people to those big expensive business schools. We will go onto the web for you and find all the good stuff that is available, package it and sell it to you at a fraction of the price that traditional business schools would charge”.
The question for anyone entering the e-learning field is how to finance it. Many people have become very used to getting lots of things free from the internet. So, how do you price your offering? And how do you develop a competitive advantage? What will be the key success factor? The brand?
Obviously a big name can attract people to a website more effectively than a lesser-known brand. But are people going to register because of the brand or because of particular professors who have talent or knowledge about a topic? Is it a combination of both? There are many questions to be answered.
As competition intensifies, differentiation becomes crucially important. Every business school has a different mission—regional, national or international. But the question of how to differentiate yourself from other schools occupying a similar niche is becoming a major challenge.
What companies want
These are the challenges facing business schools. But what is the view in the market? When I talk to companies about executive education, two issues come up.
The first is that customers are increasingly looking for the ‘best deal’. They take longer to decide if they will take up a particular programme; they want shorter programmes; and cost is becoming an issue.
But the most important factor, at least for IMD and our customers, is impact. Companies often ask how relevant the academic world is today. Last summer I was in the US talking to deans of major business schools, and some of them believe that the academic world is indeed becoming more and more academic. What impact do we want to have on the businesses of tomorrow?
An expression used a lot by Peter Lorange, my predecessor at IMD from whom I have learned a great deal, is the importance of the Lifelong Learning Journey. In the past, especially on the executive education side, you used to go to a GMP (General Management Program) at Harvard Business School after an MBA at IMD and you would be (or thought you were) educated for life as a manager.
This is over. The world is changing too fast. We see an opportunity for repeated short-term courses and, since we deal with many global companies, their managers want to have the choice to go to a school in a certain part of the world and do another module or course in another part of the world.
What are the implications? As I mentioned earlier, schools have different missions. I think, therefore, that each school has to draw lessons from all these factors and forces for itself.
Authenticity and curiosity
The ultimate goal of business schools, I believe, is to produce responsible leaders in this complex, uncertain, chaotic world. At the top of any corporation, people are smart and have proven that they can run a business and be successful. In the end, authentic leadership and personal values will make a big difference.
It is also our job to shape and nurture a curious and open mind. I have seen too many executives and students living in their small world and not thinking enough about what is happening in other parts of the world or in different industries.
Of course, we need some local companies. I recently met an entrepreneur in Switzerland who was tired of fighting Chinese and Indian companies. One evening he listed a number of criteria for the business sector of his choice: first of all, he didn’t want to compete with the Chinese and the Indians; second, he didn’t want to have to explain what the product was about; third, he wanted the customer to come back every day; fourth, he wanted them to be non-price-sensitive.
Which business fits? He came to the conclusion that he should open a chain of bakeries and he has been doing that very successfully.
But even if you are a local baker, you should have an interest in different perspectives about communication or the way you design your shop. Curiosity about life in all its aspects is still the secret of great creative leaders. Intelligence without curiosity, in my view, does not mean much.
I may be biased because I did my PhD in Japan, I am married to a Japanese and spend a lot of time in Asia. But I think that the future is going to be in that part of the world. If you see where the world is moving to today, BRICs are important and now some people talk about the ‘Double MIT’ (Mexico-Indonesia-Turkey and Malaysia-India-Thailand).
If I look at the profile of our faculty at IMD, we clearly have been recruiting a lot of Western faculty educated in the Western world, whether in the US or in Europe.
Having faculty who are curious about the world is very important. Before you teach you have to learn and in order to learn you need to have curious faculty. The challenge will be to stimulate faculty who are very comfortable and very successful teachers and researchers to go and look for something different in other parts of the world.
Interesting times ahead
Business schools are living in interesting times. Public funding, demographics, economics and technology are the main forces that are going to influence our medium- and long-term futures.
In terms of the impact business schools try to have on their participants, whether students or executives, the shaping of responsible leaders is absolutely key. So is making them curious about the world in general. Getting these things right is vital for future success.
This article is taken from a speech given by Dominique at the 2013 EFMD Deans and Directors General conference at Koç University in Istanbul. The article first appeared in “Global Focus” (EFMD), June 2013