P. Andrew Bilbao graduated from an MBA program and went to work at a large New York investment bank ten years ago. One day, a vice president of the bank walked into the office shouting: “Who here is an MBA? I have a job for an MBA!” Bilbao was ready to step forward, but another recent graduate volunteered first. He was glad he was beaten to the punch. The VP took a pack of Tic-Tacs from his pocket and asked the eager business grad to help retrieve one that was stuck on the bottom. While the “job” was a joke, the message was clear enough–Bilbao’s MBA wasn’t worth much to the executives at the bank.
A 1997 survey by CFO magazine confirmed that finance executives weren’t happy with the quality of most finance instruction at universities, and especially with the lack of exposure of finance MBAs to the realities of corporate work. (See Incomplete Education.) But that sentiment is beginning to change. MBA programs are reinventing themselves these days, as they try to keep up with the fast pace of change in corporate America. Business school deans are beginning to experiment with the time-honored MBA. And so far, Corporate America likes what it sees.
Less prevalent today are the ivory towers of academia where students learn financial theories that have little application to the real world of finance. In their stead are programs that bring more diversity, better problem-solving skills, and a more global perspective to the MBA experience.
MBA programs from Duke University’s Fuqua School of Business to the University of Chicago’s Graduate School of Business are promoting themselves as schools that can deliver the skills and qualities that corporate recruiters are looking for. And for good reason. With admissions down 10 percent at some MBA programs, administrators are under more pressure than ever to deliver results. Not to mention that corporate executives and recruiters play a big role in shaping the popular business school rankings printed each year in publications like Business Week and U.S. News and World Report. The aim is to quiet finance executives’ number one critique of MBA programs— that they provide too much finance theory and not enough basic practice.
“Many MBA students were impatient with theory-based financial training that was not related to their job and decisions they faced in the real world,” observes Prof. Samuel L. Hayes of Harvard Business School. He says that Harvard, long a champion of the case-study method of teaching, has continued to favor education methods that provide real- world experience. For example, Harvard uses more online supplements in the classroom so that students can work with databases of real-time information.
Ford Looks for Quality
The focus on experiential education is starting to pay off. Dominic Dimarco, CFO and planning director of the Automotive Consumer Services Group at Ford Motor Corp., says he has seen an increase in the aptitude of Ford’s finance MBA recruits. “We are getting excellent candidates that can make an impact right from the start,” he says.
DiMarco, who has recruited MBAs at Ford for over 15 years, attributes the improvement to the focus MBA programs have put on work outside the classroom. “Many MBA schools are being more selective about MBA candidates and requiring applicants to have more job experience before they enter,” he says. DiMarco also credits the coursework that MBAs do in teams across disciplines. He says that increasingly, finance people at Ford are being integrated into decision making across the organization. “They need to take an enterprise perspective, rather than make a decision from a strictly financial point of view,” he says. While in the past MBAs had a harder time seeing the bigger picture, they are now more effective at it, according to DiMarco.
“There has been a lot of work done to help on collaborative skills,” agrees Cheryl A. Francis, a former CFO and a member of the advisory counsel of the University of Chicago Business School. A trend toward applications-based teaching, where students work in groups in a lab environment, are starting to produce results. “New MBAs are better team players and better communicators,” she says.
A case in point is a course at Chicago–long a bastion of theoretical study–that asks students to develop real products for real companies. Sponsors of the course have included Citicorp, Ameritrade, American Airlines, Allied Signal and others. New product projects teach students through direct experience how to generate and evaluate new product concepts, financial forecasts, pricing strategy and other elements of business. “We have made a conscious effort to be in touch with business as it in being practiced at companies today, and into the future,” says Allan Friedman, director of communications at the U. Chicago.
Other schools are also working hard to keep in touch with what is happening in the real world. The Olin School of Business at Washington University in St. Louis, for example, brings in business leaders not only to help shape the curriculum, but in some cases to teach courses along side professors. Duke’s Fuqua School stresses global issues and offers a version of its MBA earned with class time on several continents.
Not everyone is sold on the renewed value of an MBA. Bilbao, now CFO of Emazing.com, continues to have his doubts. “B-Schools might have gotten better over the last few years, but they still need to be more attuned to the needs of Corporate America. If I were looking to hire a financial wiz kid, I wouldn’t hire an MBA,” he argues. “Id hire someone with an MFS, or a background in math.”