Business often is a force for good in the world, says Cindy Schipani, professor of business administration and business law at the University of Michigan Ross School of Business. And in what is sure to be one of the biggest issues of 2018 — because it was the biggest issue of 2017 and remains at the forefront of the cultural zeitgeist — business, Schipani insists, absolutely must lead.
“Although the work environment for women has improved because of (gender diversity and pay) laws, pathways for women to C-suites are still elusive,” Schipani tells Poets&Quants. “For example, women were president or chief operating officer of only 13 S&P Fortune 500 Companies in 2016; this is up from nine in 2006. A better path to diversity in the C-suite would not only help the firm’s financial performance; it can also help employee retention and begin to address the persistent gender-based disparity in pay.”
Schipani was answering a call by Poets&Quants for business school deans and professors to forecast the biggest developments of the year, whether in business education, business itself, politics, or any other arena. She and several others from schools around the U.S. offered thoughtful, and sometime humorous, takes on where 2018 will lead us.
“Business,” she says, “can address the disparity through mentoring and networking programs. Access to networks and mentors has proven to play a crucial role in climbing the corporate ladder. It could also give women an opportunity to dissociate themselves from baseline negative presumptions. Business could also address the issue by being more transparent about salaries. Studies have found that transparent pay conditions tended to reduce the gender pay gap. Perhaps the easiest is to make it clear that discussing salaries between workers is allowed. When employers have encouraged such discussions or provided information about pay scales, many misconceptions about pay are corrected.”
SURPRISE! STUDENTS WANT TO CHANGE THE WORLD
Ross’s Cindy Schipani
Another Michigan prof, Jerry Davis, associate dean and professor of business administration, points to some success combating gender disparity — at least in the Ross MBA ranks. “Our class of first-year MBAs is 43% women, representing 45 countries and with an average GMAT score of 716 — the highest number we’ve ever had,” Davis says. Whether that trend will manifest at other schools is another question.
But it’s not the main question, Davis says. The main question is, “What will these highly qualified, diverse candidates do with their MBAs?” Davis says the answer is obvious — and telling: “When they are asked what industry they want to go into after graduation, the biggest category is consulting. The second is social impact.”
Impact, he says, is not a hard sell for today’s students. “It’s not like we’re trying to get them to eat their vegetables against their will,” he says. “Making an impact on society is what they want. My goal is to help us think of business as a means to achieve that.”
IMPACT ASSURED TO BIZ ED
Sarah Soule, senior associate dean for academic affairs at the Stanford Graduate School of Business, predicts that the desire to make an impact will have an immediate impact — not necessarily on the larger universe of business and commerce, but on business education. “In 2018 businesses will be moving into a new era of social responsibility, which will involve more attention to ensuring a diverse workforce in which everyone feels included and valued, as well as greater attention to equity in opportunity, as well as compensation,” Soule says.
“I anticipate that the way we traditionally understand business education will change in 2018. We will no longer rely solely on the classroom lectures, but will expand to meet the needs of the next-generation student. At the GSB, this includes expanding our online offerings, exploring the idea of the virtual classroom, connecting with students across the world and continuing our focus on global study trips to provide students with first-hand global business experiences. Additionally, this will mean embracing more interdisciplinary collaboration, across diverse platforms.
“One of the great advantages we have here at Stanford is that we’re in the middle of a world-class environment that excels in enabling people to move across schools and disciplines to work together on larger concepts, which expands educational opportunities.”
TROUBLE ON THE HORIZON
Paul Almeida
But even as they adapt, many schools will be in trouble, says Paul Almeida, dean of the Georgetown University McDonough School of Business. Especially at risk in 2018 are the smaller schools, he says.
“We will see more small business schools in trouble,” Almeida tells Poets&Quants. “The economics do not favor smaller institutions or institutions outside of large metropolitan centers. Business schools with less resources are going to find it hard to compete in an environment where you have to make investments in technology, in pedagogy, and even more than before, in new ways of learning and better ways of reaching out to organizations for career placements and internships.
“These are all financially and organizationally demanding challenges, and smaller or under-resourced business schools or schools that are not well-situated are going to feel challenged.
“There will be the beginning of a shakeout in the industry. There will be a little bit of consolidation — not much. It’s not going to be radical. These shifts are inherent in a maturing industry which also is defined by global competition and change, particularly in the technology area.”
Dean Amy Hillman of the Arizona State University W. P. Carey School of Business summarizes what she expects to happen in 2018, saying bluntly: “More full-time MBA programs will close.”
Asked by email to offer their thoughts on the new year and what it holds for business education, Northwestern University Kellogg School of Management professors Brian Uzzi and Tom Hubbard collaborated on a response to Poets&Quants that they titled “Scaling Human Minds: New Challenges for Leaders, Businesses, and Society.” In it, the two professors acknowledge the transformative effect of machine learning and artificial intelligence on business in partnership with humans, a partnership that has led to the solving of intractable problems while driving disruption in stable markets. That, they say, will accelerate. “Indeed, your next colleague at work may not be a person but an equation in the form of a machine-learning algorithm or artificial intelligence system,” Uzzi and Hubbard write. “Many of the most important network connections and teammates are not only going to be between people, but between people and machines. How are business schools preparing future leaders for a business world where mind+machine > mind or machine?
Kellogg’s Brian Uzi
“The business challenge: Earlier technologies substituted machines for physical effort. Computational technologies call into question exactly which cognitive tasks humans should continue to perform, and which machines should conduct. Where do humans have a fundamental advantage?”
Their answer: Tech innovations free people to “deploy their energies into areas where they are uniquely capable” — areas such as intuition, creativity, invention, and relationships. “Partnerships with machines complement humans’ distinct capabilities, and vice versa,” Uzzi and Hubbard write. “The implications extend to any situation where more predictive evidence-based human decision-making provides more wellness or more wealth, or expanding human consciousness creates new success strategies and insights. ‘It’s not about growing the things you do so much as growing what other things you can do.’”
MIND+MACHINE > MIND OR MACHINE: THE COMING CHALLENGES
Kellogg’s Thomas Hubbard
Computational innovations and man-machine partnerships offer very real benefits to humans, Uzzi and Hubbard write. For example, “H&R Block’s collaboration with IBM Watson can turn H&R Block’s traditional tax data entry personnel into higher end tax consultants,” they write. “Amazon had enormous consumer behavior data, but there was no existing theory to guide strategy for enticing buyers, bringing products to market, or targeting. Machines drew connections and offered recommendations by sifting through enormous amounts of data, reducing human blind spots and decision-making biases that may have otherwise taken years of research.”
In 2018, the Kellogg profs posit, many down-to-earth problems in business today are physical, real-world problems, not cyberspace conundrums. Therefore, some jobs performed by humans will eventually be performed by machines, including some white-collar jobs thought to be immune from automation. Along with the obvious benefits, this presents challenges: “What do these people do now, and what should we as society do for them?” Uzzi and Hubbard ask. “Relatedly, they can accelerate economic inequality if some humans’ efforts turns out much easier to scale than others. Do organizations’ incentives to scale human minds conflict with egalitarian desires to generate more equal outcomes? These changes and the challenges they present create an opportunity for academic research that is both cutting-edge and impactful.
“Top business schools will thus have a new charge: How do we prepare leaders for leading in a workplace where mind+machine > mind or machine? It is only through accepting that we are greater with machines than without them that will we discover what makes us uniquely human and humane.”
‘THE ROLE OF TECHNOLOGY IN IMPROVING THE HUMAN CONDITION’
Duke Fuqua School of Business Dean Bill Boulding agrees that the transformative effect of tech will continue in 2018s, and he echoes Uzzi and Hubbard in voicing concerns about the “partnership” between man and machine. “We need,” Boulding says, “to spend some time in the new year really thinking about the human and ethical implications of these technologies.”
One example is artificial intelligence. What, he asks, is the role of human judgment when emptying rules-based algorithms? And here Boulding turns to Duke’s biggest name to provide context.
“Our legendary men’s basketball coach at Duke, Mike Krzyzewski, talks about having standards rather than rules. Why? Standards allow for human judgment about what’s best in the moment,” Boulding says. “Rules box you into a decision without considering other information that may be important to the particular situation. We need to pause to think through the implications of technology to make sure we are not losing the human element and in particular our values.
Ethical and moral issues related to technology are going to be important in 2018, Boulding says. Take blockchain for example. The technology is revolutionizing the financial services industry, “but what is the right level of transparency versus privacy? … Understanding the human-AI interface will take on increasing prominence as we think through the role of technology in improving the human condition.”
SHOWING BUSINESS AS ‘A TRANSFORMATIONAL ENGINE FOR GOOD’
Cornell’s Mukti Khaire
At the same time, Boulding says, technology in 2018 will continue to disrupt business and impact jobs. It will be essential, he says, for business leaders in the coming year to think about how to innovate for “the under-served and those being left behind in the wake of technological innovations. Can technology be harnessed in ways that improves the lives of individuals currently living in fear that new technologies equate to the loss of their jobs? Genuine efforts in this area could go a long way in winning back public trust in business post-financial crisis.”
Therein lies a challenge for business schools, Boulding says: “We must develop graduates who can win back public confidence and show business can be a transformational engine for good. That means making sure business education is accessible to a wide variety of students who can make an impact in different ways. For those reasons, I think it’s also important that business schools be focused in 2018 on how to deliver curriculum in effective ways (like online) that increase flexibility for students and thus accessibility and diversity. While online programs should not replace the face-to-face model in business education, there is a place for online in our industry and I think this will be an area of tremendous innovation in the coming year.”
Cornell SC Johnson College of Business’s Mukti Khaire, the Girish and Jaidev Reddy professor of practice, adds a note on collaboration in 2018: “I believe that cross-functional, collaborative, and comprehensive processes of product (i.e., end-to-end solutions to internal or marketplace challenges) development will be key to business success in 2018,” she says. “Business education that emphasizes these dimensions of leadership will therefore be increasingly critical to sustained wins in this rapidly-transforming economy.”
Michigan Ross lecturer Marcus Collins on the impact of social media on business in 2018: “There will always be evolutions, even if they’re marginal. We’ll likely see more platforms integrating virtual reality and augmented reality features as mobile devices continue to adopt the technology”
Some things won’t change so much in 2018, says Dartmouth College Tuck School of Business Dean Matthew Slaughter. Among them: Experience-driven learning and application “will continue to be a priority for students and recruiters alike.” And Tuck, for one, will stay the course in response. “We at Tuck will continue to refine and expand how our students learn through application,” Slaughter says, “in courses like First Year Project, TuckGO, and our brand new TuckINTEL, a course where teams of Tuck students draw on the entirety of their rigorous first-year curriculum in a many-day simulation in which they run a clean-tech company that competes against other Tuck teams.”
Slaughter says he hopes the new year will provide leaders in the U.S. and global economies more opportunities to “craft practices and policies that build ladders of opportunity for the many workers and citizens keen to enjoy a better tomorrow. The new year starts with widespread strength in the global economy: every one of the OECD economies is currently growing, with many enjoying accelerating growth. Such times of growth are ideal for embracing the dynamism of globalization along with a constellation of related policies that can allay the legitimate labor-market concerns people have.
“Deep in human nature,” Slaughter adds, “is optimism and hope, not pessimism and anger. Here is hoping the new year brings creative new policies that spring from that optimism and build on the current growth.”
Sarah Miller, assistant professor of business economics and public policy at Michigan Ross, has optimism about one key area of the economy: health care. Despite the open enrollment period for the Affordable Care Act being cut in half in 2017, signups were robust, and she expects the law to survive efforts by the current administration to kill it. “The repeal and replace debate has helped throw into light some of the more popular aspects of the law, such as the Medicaid expansion and the dependent coverage provisions, that enjoy bipartisan support,” Miller says. “Although the law may see additional changes around the edges, I suspect the core elements of the law will survive the Trump administration.”
THE ‘EBB AND FLOW’ OF SOCIAL MEDIA PLATFORMS
Michigan Ross’s Sarah Miller
Miller’s colleague at Ross, lecturer Marcus Collins, sees 2018 as a year of continued — and in many ways increased — reliance on social media, both in business and society as a whole. This, of course, will impact businesss education in many ways.
“Social media platforms are certain to ebb and flow,” Collins tells P&Q. “Much like any social environment — bar, club, etc. — people populate them and move on to the next one. It’s not until a platform transitions into a utility that it has real staying power. The winning platforms will be the ones that enable the best and easiest ways to tell stories.”
He points to Facebook as a platform that has “transcended novelty and now provides immense utility by both being one of the greatest distributors of news and decreasing the natural decay of network ties.” Instagram helps novice photographers “take aesthetically pleasing pictures, which provides a wealth of utility.” In the case of Snapchat, “its ephemerality and filters provided the platform great novelty, but once that novelty was exhausted and then copied, the luster started to fade. The platform has also suffered from its inability to seize the momentum it generated early on and convert it to sustainable revenue through ad products.”
Twitter, meanwhile, is an interesting case, Collins says, one that “oscillates between utility and novelty, which creates both opportunities and challenges for the platform beyond its business model woes.”
In the social media realm in 2018, he says, “There will be evolutions, even if they’re marginal. We’ll likely see more platforms integrating virtual reality and augmented reality features as mobile devices continue to adopt the technology. Companies like Facebook and Apple, for instance, are making huge strides in augmented reality so that it’s easier to access and far more applicable to our everyday lives. We’ve seen retail brands like IKEA venture into the space early, integrating the technology in their marketing efforts. And who can forget the Pokemon Go frenzy?”
LIKE THE MUSIC INDUSTRY, BIZ ED MUST PREPARE FOR DISRUPTION
While social media is sure to experience changes big and small that echo across the business education landscape, Michigan Ross Dean Scott DeRue sees a corollary to the music industry. B-schools, he says, are undergoing a significant market disruption not unlike that occurred when streaming music services first began to cut into the record companies’ bottom lines.
“For decades in music we purchased a bundle of songs, and artists toured in order to drive demand for their albums. Consumers happily paid $15 for the two or three songs they really wanted,” DeRue says. “Then iTunes came along and disaggregated the bundle, such that we could pay a small amount and only for the songs we wanted. Then Pandora and Spotify came along and now many of us consume music content for free or at a very low cost. In effect, the content has become commoditized, modularized, and widely accessible at a low cost. For the artist, much of the value has shifted from content production (the album) to the live experience (the concert).
“In education, for centuries, we have been the exclusive holders of content, and we bundled that content into degrees such as the MBA. Now, as in music, the content is becoming commoditized and modularized. Whether it’s Wharton’s business fundamentals course or Michigan Ross’s leading people and teams course — or the thousands of other options available online — you can now consume high-quality content for free or low cost from anywhere in the world (our Pandora). Every school has some form of streaming educational content and, just like in music, some will thrive and others will not. In parallel, the bundle — the degree — is being disaggregated, and we are seeing an increase in business degrees and certificates on specialized topics that are modularized (our iTunes). And now every business school in the country is having to answer a fundamental question: What is your school’s concert?”
‘UNIQUE AND VALUED EXPERIENCES’ TO BE ESSENTIAL TO BIZ ED IN 2018
Ross Dean Scott DeRue
In 2018 and beyond, DeRue says, schools that offer a “unique and valued experience — the educational concert — will thrive, and schools that offer marginal value above and beyond the basic content will not.” He aims to make Michigan Ross one of the schools that offer a unique experience, pointing to “an unparalleled commitment to hands-on education,” wherein every Ross student is given wide array of experiences such as starting real companies, investing in real assets, and advising real companies.
“The results thus far are remarkable,” DeRue says. “Our students have launched more than 170 companies in the past five years, and we now have seven student-run investment funds with more than $10 million under management. Furthermore, our students will engage in more than 180 consulting projects (in 2018) with leading companies across the globe. (In 2018) we also launch our seventh ‘living business’ where student teams lead actual business units within startups, Fortune 50 enterprises, fast-growing luxury retail brands, among others.
All that will continue in the new year and its importance going forward won’t be diminished, DeRue says. “As a result of these unique, hands-on experiences, students learn to think critically to solve problems, build and lead teams, thrive in ambiguity, make sense of complexity, and work across boundaries. These are all skills in high demand from employers and help students hit the ground running on day one!”
DON’T MISS IN AGE OF TRUMP, B-SCHOOLS BRACE FOR UPHEAVAL and THE ENTIRE MEET THE CLASS OF 2019 SERIES
The post B-Schools Predict What Awaits In 2018 appeared first on Poets&Quants.
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