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Helping Colleges and Universities Educate Tomorrow’s Knowledge Workers

Sunday, November 27th, 2011

My last blog reviewed some of the IBM Almaden Co-Evolution conference’s primary conclusions around the shape of the American job market, especially:

  • The state of today’s jobs market;
  • Where the new generation of jobs will come from; and
  • The types of skills these jobs will require.

This blog examines some of the conference’s follow-on conclusions, particularly around:

  • The capabilities and limitations of colleges and universities in helping students learn these skills;
  • How they will have to evolve to accomplish these goals; and
  • The type of cooperation—with primary and secondary schools, businesses, non-profits and governments—that will be required for colleges and universities to prepare knowledge workers for jobs that will be increasingly defined by the combination of globalization, technology and the growth of self-employment.

The Changing Role of Colleges and Universities

Colleges and universities are generally viewed as the primary, although certainly not exclusive source of many of the skills—both functional and foundational—that will be required for tomorrow’s jobs. True, the foundations for these skills must certainly be laid in secondary and even primary schools. Businesses, meanwhile, must help employees hone and refresh these skills. Most importantly, individuals will have to take primary responsibility for attending the schools, selecting the classes, choosing an employer and selecting the combination of extra-curricular activities that will help them develop these skills. For most, however, post-secondary institutions will remain as the single most important linchpin in the individual’s education-to-employment pipeline.

Many conference participants, including a number of university professors and administrators, concluded that few schools were currently fulfilling their missions. Their indictments and recommendations were generally in line with those of Clayton Christensen’s team’s February 2011 Disrupting College report.

Thousands of colleges, suffering from a type of “Harvard-envy”, short-change students by trying to simultaneously accomplish three primary missions: knowledge creation (research); knowledge proliferation (teaching); and helping prepare students for careers. While Harvard and perhaps one or two dozen other universities have the endowments and the cash flow to fund quality required for each, the vast majority of schools lack the resources and the skills to perform each of these tasks well.

Rather than trying to do all, most schools should focus on their core missions of knowledge proliferation (teaching) and preparing students for careers. They must also do so more cost-effectively, delivering quality education in a way that students and their families can afford without going deeply into debt. This will require the use of additional, more leverageable sources of learning, such as that from peers and tutors, and especially from learning technologies—including the potentially disruptive enabling technology of online learning. This will help free instructors from creating and even delivering lectures, provide them with insight into individual student needs and allow them to focus more time on addressing each student’s unique needs.

These schools, however, must also do much more—not only to prepare students for careers, but also to make them more “employment-ready” upon graduation. This requires deeper coordination with the private sector, not only in identifying the skills that are required for success in their companies, but also in providing more opportunities for “experiential learning” in which students have the opportunity to combine classroom, book and online education with experience in working on real-world problems, both in school (as in inter-disciplinary research centers) and in companies (as through apprenticeships and internships). Schools must determine how to give credit for these real-world experiences and also to apply (once they are developed and generally agreed upon) quantifiable metrics that assess educational outcomes. They should also, according to the Institute for the Future and my own research, specifically integrate the teaching—and especially the learning and reinforcement—of variants of the Institute for the Future’s ten foundational skills specifically into college curricula.

Cross Domain Educational Collaboration

Although colleges and universities are certainly critical links in the education to employment pipeline, they are not the only contributors. Primary and secondary schools must teach basic skills and provide a solid foundation for and passion for lifelong learning. They should also extend their current missions to provide solid groundings in the types of foundational skills that all employees—especially knowledge workers—will require in the new economy.

The private sector also plays a critical, but unfortunately diminishing role in educating their workforces. But although overall private sector investment in employee education rose slightly in 2010 to $52.8 billion, or $1,041 per learner, it has generally been falling since a high of more than $60 billion in 1999. Even so, a number of companies including Boeing and IBM (both of whom presented on their employee development efforts at the conference) continue to invest heavily (see, for example, my 2009 report in IBM’s Role in Creating the Workforce of the Future).

These and a number of other companies also work closely with schools, and invest in them—from primary to post-secondary—to help them develop curricula, fund teacher and instructor training, and develop workshops and internships to provide students with real-world learning experiences. Many companies, as discussed extensively in my blog, have partnered with secondary schools to improve IT education and train teachers on effective use of technology, with community colleges to prepare prospective employees for specific jobs and with universities to develop courses, curricula and entire degree programs.

Although such bilateral partnerships are certainly important, the conference concluded these are just the start. Corporations and schools must also partner with:

  • Foundations, such as Gates and Illuminata, to define desired course outcomes and develop metrics;
  • Non-profits, such as the Institute for Electrical and Electronics Engineers and the Council for Adult and Experiential Learning (both of which presented at the conference) to create pathways to help individuals create the educational experiences required to prepare for and advance their careers; and
  • State and local governments to identify the types of businesses they wish to attract, identify the resources and skills that will be required to attract employers, encourage and help local schools provide the required education and training and ideally, create online databases that help students and workers identify jobs and careers that will be available, the types of skills that will be required, and how these skills can best be learned and developed.

Although the Federal Government could, at least in theory, play an important role in identifying, mapping resources and coordinating efforts, the reality is that most economic development and education policy is done at a state and especially a local, rather than a national level. The most effective education-to-employment pipelines will probably require close cooperation by and deep commitments from mayors, university presidents, local business executives and local Chambers of Commerce.

 

Summary

U.S. colleges and universities must undergo huge changes if
they are to prepare graduate for tomorrow’s jobs—and do so at a cost that both
the students and the county can afford. For many, it will require a fundamental
rethink of their missions and their established practices. It will also require
much closer collaboration with the businesses that are likely to hire these
graduates.

 

 

Core Skills for Knowledge Workers in a Global Economy

Sunday, October 30th, 2011

The U.S. education system was created primarily to teach analytical, and to a lesser extent, communication skills. The vast majority of this education, especially at the university level, is segmented into specific domains. Although these domain-specific content and skills are certainly critical, many additional broad, foundational skills are required of a generation of knowledge workers that are capable of delivering high-value in a global economy.

Exactly what are these skills and why are they so important? I discussed some of these skills at a high level in my November 2009 article, Right-Brain Skills for 21st Century Jobs and discussed some of these and others in a number of articles over the last couple years.

Although nobody of whom I am aware has published a comprehensive list of such skills (as if there ever could be such a thing), I would include capabilities such as:

  • IT fluency, where familiarity and comfort with tomorrow’s tools is so deep that technology becomes the de facto, go-to tool to address virtually any business need;
  • Quantitative analytics, especially higher-level math, statistical analysis and analytics;
  • Integrative imagination,” the ability to integrate information and ideally methodologies from disparate realms to create original new insights;
  • High-level thinking skills including focused research, information filtering and prioritization, critical and adaptive thinking, creative problem-solving and analytical systems thinking; and
  • Soft skills, such as written and oral communications, teamwork, social intelligence, leadership and cross-cultural awareness and sensitivity.

But what are the precise skills that will be required? How do the combinations of skills vary among occupations, industries and positions? Nobody really knows. Nor do they really know how these requirements will evolve in the future. There is, however, one thing we do know. Far too few people entering the workforce, or even that are currently in it, have a sufficient base of such skills.

These broad skills, although necessary, are not sufficient to prepare an individual for an interesting and fulfilling career. They must be complemented with deep domain knowledge in a particular field AND sufficient knowledge of a broad range of other disciplines and fields to provide an inter-disciplinary perspective enable cross-domain collaboration. This domain knowledge, however, must be built atop the core skills that are applicable to virtually any field.

But, to address the current “core skills gap” we must first answer some fundamental questions:

  • Which of these core foundational skills are most critical and most universal?
  • What are the best stages in one’s education and career to learn these skills?
  • How can they most effectively be taught and learned?
  • What responsibility for identifying and learning these skills should be assumed by the individual —and what by primary, secondary and post-secondary schools, by businesses or by other types of organizations?

Much of my ongoing research and writing will focus on these and related questions.

Scaling Infosys’ Educational Programs

Sunday, September 25th, 2011

Infosys, as discussed in my September 11 blog, has developed one of the IT industry’s largest and most comprehensive talent development programs. Although the program was created I India, and is by far the most mature, multifaceted and far-reaching in India, the company is now bringing parts of the program to other countries in which it operates.

From India to the World

Infosys has, for example, implemented versions of its CampusConnect program (which help colleges develop and launch business-relevant curricula and courses) in other countries in which it has Delivery Centers. It is, for example, working with Malaysian university faculties to improve IT education and with Mexican faculties to develop an IT curriculum to make programs more industry-relevant.

Just this month, it entered into an agreement with Singapore Management University (SMU) to jointly develop content, case studies and learning labs for both Infosys employees and SMU undergraduate and graduate students. They also plan to conduct joint seminars and tutorials and collaborate on currently unspecified research and pedagogy projects.

Infosys, however, is focusing the vast majority of its Out-of-India efforts on China, the county in which it has already hired 3,500 employees, with plans for another 8,500 in three years. For example,it  opened a Development Center in Shanghai and an Education Center in Jiaxing. This new Education Center, which will eventually accommodate 3,000 students at a time, will generally replicate the company’s Mysore curricula and courses, but tailor them to the specific needs of Chinese recruits. More than 650 recruits have already completed the Center’s foundation training program and another 350 in process.

The company is also beginning to work with Chinese universities. It has, for example, launched a Chinese version of CampusConnect and is working closely with local governments to extend the program to more schools in other regions of the country.

Multi-Lateral in India

Infosys is also working to scale its education programs by partnering with third parties. These partners include:

  • Individual companies, such as Microsoft, which is now participating in SPARK; and
  • Non-profits, such as NASSCOM, where it is sharing best practices with the group’s Education Council, for deployment across India; and
  • Pan-national organizations, like UNESCO, to share learnings and identify best practices that can be applied across many different countries.

The company also forges more informal cross-border relationships. For example, it regularly invites industry bodies and faculty from other countries to visit Mysore. They have hosted a range of countries, from barely emerging (like Bhutan and Rwanda) and solidly industrializing countries (such as Thailand and Colombia) to learn and deploy capabilities in their own countries.

Applying Indian Learnings to Developed Countries

Cross-border learnings on employee development and most other business processes typically flow from more developed countries (which typically have the educational institutions to create and the corporations to test and develop best practices around these processes) to less developed countries.

Perhaps, however, it is about time for more such learnings to migrate in the other direction. Companies ranging from Proctor and Gamble and General Electric Medical Systems have developed products specifically for emerging countries that have since been migrated to developed countries. There are similar opportunities for migrating business models, such as Li & Fung’s supply chain practices and Bharti Airtel’s use of variable cost, virtual infrastructures.

On one hand, it may seem strange to suggest that countries like the U.S. and England—countries that virtually invented and still have some of the best colleges and corporate talent development and management practices in the world—could learn much from India. That country’s IT services sector, for example, is prospering only because the private sector was forced to develop capabilities that the public sector was not capable of providing.

But in many senses, developed countries are now facing some of the same challenges as developing countries. These include a sclerotic education-to-employment pipeline that does not seem capable either of:

  • Preparing students with the skills that will be required in an increasingly global knowledge economy, or of
  • Reskilling current workers who must learn totally new skills to qualify for new jobs in their current industries, much less those in new growth industries.

This is certainly not to suggest that emerging country companies have some type of inherent advantage over developed country companies, either in helping schools to graduate more employment-ready students or in proactively developing the skills that current workers will need for tomorrow’s jobs. After all, Western IT services companies such as IBM, HP and Accenture, were faced with many of the same challenges as their Indian counterparts in growing the Indian talent pool. These companies addressed their Indian needs in much the same way as did the Indian IT services firms. All of these companies–both Indian and Western–are now applying similar practices to develop their Chinese labor forces.

Some Western companies–especially IBM in universities and Microsoft in secondary schools—are at least as active in partnering with U.S. schools as Infosys is in partnering with Indian schools. It is, however, a shame that such actions are not ubiquitous, across not just the technology industry, but all industries.

Given the seemingly intractable challenges faced in reforming our education system and in addressing the worsening mismatch in the skills that students graduate with, versus those needed by employers, this country’s education system seems to need at least as much help from the private sector as do those in China and India. In fact, in some ways it needs even more, since U.S. and European students are increasingly turning away from the type of STEM educations that Indian and Chinese students crave.

Perhaps many more companies, across all industries and countries, have something to learn from the Indian IT services industry’s experience in educating, developing and managing talent.

The Drawbacks of Specialized MBAs and Business Masters

Sunday, December 19th, 2010

Three of my recent posts have devoted a lot of virtual ink to profiling (The Trend toward Specialized MBAs), explaining (B-School Sub-Specialization), and to portraying (The Draws of Specialized MBAs and Business Masters Programs) some of the potential opportunities and advantages of what I see as one of the most important and fastest growing changes in business education in the last couple decades—the explosive growth in the Specialized MBAs and related business masters’ degrees.

But for all the momentum toward, and the strengths and promise of these programs, they also have limitations and face some daunting obstacles. This post briefly highlights some of these challenges and explains what I see as the likely long-term role of these programs.

Do Specialized Masters’ Deliver on their Promises?

Specialized masters’ programs promise much. They claim to provide short, intense and relatively low-cost/low-commitment approaches to preparing students for specific jobs. And since the programs are so focused, they have the potential of combining theoretical education and practical skills in ways that will give graduates a leg-up in competing for jobs in a tough economy.

Although the potential benefits are great and the arguments are compelling, the jury is still out on the value these programs actually deliver. Among the biggest questions are:

  • How well prepared are graduates? Although education may be focused and intense, these programs tend to attract and admit younger students with less business experience, and often admit people that do not have the grades that would qualify them for admission into traditional MBA (much less Executive MBA) programs. Just as importantly, few of these programs attempt or are able to provide the type of holistic education that is required of general managers or imbue graduates with the breadth of a multidisciplinary perspective—so-called T-shaped skills (in which a person has deep skills in an area of specialty and higher-level familiarity in a number of complementary fields)—that a growing number of companies are looking for and that are arguably required in today’s complex environment and multifaceted organizations.
  • Do they improve graduates chances of landing better jobs? The results are mixed. Although programs with solid reputations and established relations with corporate recruiters appear to have placement records similar to those of tier-two general MBA programs, less established programs often have difficulty on two fronts. First, many companies—including those that traditionally recruit large numbers of MBAs—don’t yet understand these programs. Second, even those that do, often don’t recruit at lesser known schools. This can force graduates to take much more initiative and work much harder to get their foot into the door. They may also find it difficult to demonstrate the value of their degrees, especially in organizations that do not have defined openings in the specific specialty. Also, while specialized degrees may be of value in getting into specifically defined fields, they make it much more difficult to enter broader fields, such as consulting.
  • What are graduates’ long-term career prospects? Another unknown. On one hand, specialized expertise may allow recruits to prove themselves and progress more rapidly than general MBAs in their specific fields. On the other hand, such specialized educations may be a disadvantage in qualifying or being considered for other positions. Specialized programs may also pose additional risks. These programs typically attract younger applicants with limited business experience. What happens if a graduate’s interests change? Or if jobs within a chosen field­­—such as banking or real estate—disappear?

Trend or Fad?

These questions all lead to a bigger and ultimately, more important question. Are Specialized Business Masters’ a long-term trend, or a short-term fad? Will they deliver the type of education and gain the type of market traction required to give graduates not just an immediate advantage in landing a job, but also in building a sustainable career?

Although some observers, such as the authors of the fascinating recent book, Rethinking the MBA: Business Education at a Crossroads (which I will discuss in future blogs), generally dismiss such programs, others, such as CNN, contend that specialized programs may eventually consign traditional one-size-fits-all MBA degrees “to the dustbin of history.”

I come down firmly in the middle. It is certainly true that traditional MBA programs are facing rising criticism and, as will be discussed in a future blog, undergoing big changes. Moreover, a growing number of favored recruiters, such as consulting firms, hedge funds and investment banks, are reducing the percentage of MBAs they hire in favor of very bright Bachelor’s grads (and in some cases, highly specialized PhD’s) and are encouraging more of their most promising people to stay with the firm, rather than pursue an advanced degree.) Even so, such programs—especially those of Tier One schools—are likely to remain the largest source of strategy consultants and fast-track general management candidates for years to come.

This being said, these positions will always account for a very small percentage of the total demand for business graduates. As I see it, once specialized programs begin to prove themselves, and the best schools are recognized, students and the employers will come. Students will be attracted by the combination of shorter (typically 12 month) time commitments, relatively lower costs and the opportunity to prepare for specific jobs. Employers will be attracted to students who can deliver immediate value in positions for which they have immediate needs—especially if they continue to command lower salaries than MBAs.

This being said, acceptance will differ greatly by degree, by school and even by country. Specialized programs, as discussed in my B-School Sub-Specialization blog, are relatively well established and accepted in Europe. The U.S. is a different story. Although a few degrees, such as those in information technology, taxation and especially accounting, have already achieved long-term traction, most still suffer from limited recognition and considerable confusion (both among employers and prospective students). Even when these constituencies understand the concept, few currently understand the real value of such programs relative to traditional MBAs.

What will be required for to achieve this recognition? First, schools (ideally in close cooperation with likely recruiters), must determine which specialties are most likely to yield the best job prospects, the relative need for general management versus specialized education and the tradeoffs between theoretical education and hands-on, real-world training. Second, schools must effectively (and ideally, cooperatively) communicate the value and roles of these programs relative to alternatives—especially MBAs (as the recently formed Specialized Programs in Graduate Business consortium is attempting to do).

As explained by Al Cotrone of the University of Michigan Ross School of Business, “a broad-based general management education will enable MBA graduates to one day be able to rise to the top of their organizations. But they have to get into the field first.” If specialized programs do indeed prove to be a valuable aid in getting that first job, they are likely to become and remain very popular—especially over the many years in which U.S. jobs are likely to remain tight.

The Draws of Specialized MBAs and Business Masters Programs

Sunday, December 5th, 2010

My three previous posts on MBA programs examined the challenges that B-schools are currently facing, how a growing number of programs are responding to these challenges by developing specialized programs and then by drilling down into the ways in which some programs were migrating into increasingly narrowly defined sub-specialties as a means of targeting specific market opportunities and more effectively differentiating their programs from those of other specialized schools

The Growth in Specialized Business Masters Programs

This trend toward specialization continues to grow, with the vast majority of new degree programs now being specialized. While the trend, as suggested in the below Figure, is still growing in the U.S., it is already very well established overseas. (The University of Manchester, for example, now offers 26 specialized business masters degrees.) And interestingly, these programs appear to be more popular among women (48.4% in U.S. and 47.0% in international schools) than are the general programs (37.1% and 37.4%).

Figure: AACSB Member Master’s Degree Programs (2008–2009) number of schools offering at least one program in each category

Business Master’s Degree Programs U.S. International
General Master’s Degree (MBA) 454 160
Specialized Master’s Degree 298 140
Business Master’s Degree Enrollments U.S. International
General Master’s Degree (MBA) 151,215 89,200
Specialized Masters Degree 39,250 56,670
Source: Association to Advance Collegiate, Schools of Business

In fact, what began as a means by which small, second-and third-tier regional schools could tout pragmatic advantages relative to their larger, better known, more highly-ranked counterparts, has as discussed in my blog on sub-specialties, is even beginning to spread into some of the tier-one B-schools, including MIT, Carnegie-Mellon and Northwestern.

Why this growth? At a high level, business masters programs continue to be viewed as golden tickets to rewarding careers. The number of business masters conferred in the US has grown every year since 1969/70 (with exception of 1985/86, when the number slipped by 0.45%). When one digs a bit deeper, however, one finds that enrollment in traditional, full-time, two-year MBA programs has, at best, held its own over the last decade. All of the growth has occurred among non-traditional programs, such as part-time and executive MBAs, and especially specialized masters programs. Moreover, according to the fascinating new book, Rethinking the MBA: Business Education at a Crossroads, the health of full-time programs is effectively confined to the top 20-ranked U.S. B-schools. Full-time program enrollment in Tier Two schools (ranked 21-36) have fallen 17% over the last 8 years and lower ranked schools have fallen even more sharply. One-year degrees—driven largely by specialized programs—are already established as the de facto standard in Europe (although two-year programs continue to grow rapidly in Asia and Latin America).

Moreover, unlike the case in most recessions when MBA applications increase, applications are now falling. And so is demand for traditional MBAs. Hiring of new MBA grads has fallen dramatically during the recession and many of the traditionally favored employers (particularly financial services and consulting firms) have been forced to retrench. (Moreover, as discussed below, many of these firms had been reducing the percentage of MBAs in their hiring since long before the recession.)

Where is the growth? Canadian and European schools continue to see significant growth in applications and Executive MBA applications are up slightly. The real growth, however, is in specialized programs—especially those in accounting, finance and healthcare.

The Attractions of Specialization

This growth is largely a reflection of long-term global trend toward specialization. It is, however, being fueled by multiple factors affecting each of the three primary business education stakeholders: schools, employers and students. Schools (particularly local/regional schools and those below the top tier), are, as discussed in my October 24 post on B-School Challenges, are being buffeted by forces including falling enrollment in their core two-year programs, increased competition (both for applicants and for attracting qualified instructors) from European and Asian schools and challenges in placing graduates in attractive positions. As evidenced by their rapid adoption of specialized programs, they increasingly view specialization as the most attractive option.

Different schools, however, are taking different, and often multiple paths to specialization. Most programs, as discussed in my November 7 and November 14 posts, focus broadly on preparing students for jobs in traditional disciplines (such as accounting, financial management, IT management, brand management, supply chain management and human resource management) that are common across multiple industries and regions. New programs are being continually added (or existing programs tuned) to prepare graduates for the large numbers of jobs that are anticipated in fields including sustainability, compliance, risk management and business ethics. Other programs are targeted much more narrowly, as around the needs of specific and often local industries (including energy, wine, biotech and one of the most popular—healthcare).

Just as importantly, as explained by Michael Knetter, Dean of the Wisconsin School of Business, “the industry has been producing too many generalists relative to what is needed.” “The student satisfaction ratings and placement outcomes that we saw out of our specialized programs were far superior to what we found in our general management program.”

A growing number of prospective employers appear to agree. Although many companies do not yet understand or recruit from these programs (which I will discuss further in my upcoming December 19 post), some of those that do see much value in graduates that have specific education, proven interest, hands-on experience (as through internships) and, in some cases, deep technical and analytic skills, in specific industries and functions. This allows these graduates to make immediate contributions with little additional training—a particular value to companies (especially smaller and mid-size companies) that rely on “just-in-time” hiring for a specific job, rather than bringing in large classes of new graduates. These companies are also attracted by these graduates’ salary requirements, which are often closer to those of a bachelor’s degree in business, than those with a full, two-year MBA.

The Value to Students

Schools are looking to specialized business masters programs to attract more and different types of students (and better appeal to recruiters) while employers view them as a means of filling current openings with moderately-priced people that can deliver immediate value. In the end, however, for these programs to succeed in the market, they must attract students.

As I discuss in my next blog, the jury is still out as to whether these programs do or will yield better placement rates (much less cost/salary tradeoffs) than do more traditional business programs. However, they do present a logical and compelling case for improving a graduate’s prospects relative to less specialized and intensively trained (not to speak of higher priced) MBAs and less intensely focused (albeit lower priced) business bachelor degrees. This is particularly true since many of these programs tend to provide greater opportunities to balance theoretical education and real-world engagement (both through more hands-on and experiential courses and highly targeted internships and work/study programs) than to other business programs.

Just as importantly, specialized masters degrees also dramatically lower the financial bar for obtaining a graduate degree. They often cost less than half as much as a full MBA from a comparable school and slash the opportunity cost from two years to one. Such considerations can be particularly compelling both to students and their parents—especially during a recession and painfully slow recovery

Although such programs are definitely not for everyone (again, see my next blog, they do hold particular appeal, and promise particular value to certain types of students. Examples include:

  • Students with clearly-defined career objectives and self-starters who want the opportunity to chart their own paths;
  • Early-or mid-career employees looking to change careers (such as by leveraging math or IT skills into financial analysis), deepen skills in their current industry or function (such as brand management in specialty retail) or leverage technical careers into more generalized management career paths (as with the many business programs tailored specifically to the needs of mid-career scientists and engineers);
  • Undergraduate business students looking to deepen their technical skills or undergraduate technical students looking to integrate a management perspective atop their technical skills before entering the job market;
  • Students with less-than-stellar undergraduate records who may not qualify for top-tier MBA programs and will find it easier to distinguish themselves in a more differentiated, often less competitive environment; and
  • Those looking to complement current or contemporaneous masters degrees (general MBAs as well as degrees in fields ranging from education and architecture to sustainability and IT) as a means of improving or focusing their career prospects.

While all specialized business master programs have their own specific draws, proponents and detractors, two of the first, most proven and still most popular specialized business master programs—those in accounting and finance—offer particularly demonstrable benefits:

  • An MS in Accounting, for example, provides a means by which aspiring CPAs can bridge the gap between their undergraduate coursework and the 150-credit-hour requirement for the CPA;
  • An MS in Finance can provide the technical and analytic skills required to land a highly competitive position in financial services. These programs have also been instrumental in helping mathematicians, computer scientists and physicists leverage their skills into new careers as “quants” (quantitative financial analysts).

But for all the attractiveness and potential benefits of specialized business masters, they are not, as mentioned, for everyone. Many of these programs also have some serious drawbacks. These are the topics of my next post.

Business School Sub-Specialization

Sunday, November 21st, 2010

My previous post provided an overview of the trend toward specialized MBAs. It showed the veritable explosion in horizontal specialties, the pace at which B-schools—especially second-tier and regional schools—are spawning such programs and the pace by which students (over 20% so far) are flocking to them.

While this type of specialization may well help these schools differentiate themselves from those with more generalized programs, how will the specialists differentiate themselves from the rapidly growing number of other specialists?

This post looks at how all type schools, from small, specialized regionals to some of the worlds’ largest and most prestigious schools are taking specialization to new levels and into important new areas.

Growth in Industry Specialized Programs

Although most specialized MBAs are focused on relatively horizontal disciplines, a growing number of schools (led by BEM Bordeaux’s Wine MBA) are building programs to prepare graduates for jobs in industries with large concentrations of companies in their areas. Rutgers (New Jersey), for example, offers an MBA in pharmaceutical management and University of Oklahoma has an energy concentration and Suffolk University (Boston) offers one in healthcare. Suffolk University (Boston) offers one in healthcare and, not surprisingly, Scotland’s Queen Margaret University has an MBA in Golf and Country Club Management.

Not all industry-specific programs are designed for local industries. University of Tennessee–Knoxville, for example, offers an aerospace MBA in which twenty percent of its curriculum is unique to that industry. It also offers an executive MBA (PEMBA) that is targeted exclusively at physicians, addressing issues including government regulation and HIPPA. Southern New Hampshire University, meanwhile, has a program in sports management and Concordia University’s Molson School (at the behest of the Montreal-based International Air Transport Association and the International Civil Aviation Organization, created an International Aviation MBA.

Many such programs leverage or provide joint degrees with other schools within the university. Although joint degree programs (such as the venerable JD/MBA) have been around for decades, schools are increasingly integrating their curricula into truly inter-disciplinary programs. University of Oklahoma’s energy program, for example, was created and is taught in conjunction with the university’s engineering school and results in joint MBA/MS degrees. Boston College, meanwhile, leverages the college’s highly regarded divinity school to offer a joint MBA/MS in church management and pastoral ministry.

Emergence of the Techno-MBA

But, with all this diversity, we have begun to see the emergence of another cross-disciplinary specialization that is beginning to sweep across all types of universities and MBA programs. This is the emergence of so-called techno-MBAs that integrate business and technology training. Although many such programs are outgrowths of information management specializations within an MBA program (how to manage and effectively use IT to deliver business value), a growing number of programs are intended to prepare managers to run technology-based businesses. The effort generally began in the mid-1990s when Queen’s University School of Business (Ontario, Canada) created a program intended to transform career scientists and managers into managers.

Many other B-schools, including those of Boston University, Northeastern, University of Washington, Purdue and University of North Carolina at Chapel Hill have followed suit, often by integrating work across their business, engineering and science schools. Some tailor these programs to the technology of and unique business needs of specific industries. University of Pittsburgh’s Katz school, Carnegie Mellon’s Tepper School and MIT’s Sloan school, for example, all offer programs build specifically around bio-tech.

University of Pennsylvania (through a combination of its business and engineering schools) goes even further with its Executive Masters in Technology Management (EMTM) program. It offers specialties in areas including biopharm and biotech, IT and telecommunications, nanotechnology and materials science and energy, sustainability and the environment.

Tier-One Specialization Programs

Those who recall back to my previous post may remember the generalized dictum that it is primarily tier-two and regional business schools that are offerings specialized MBAs. Most of the tier-one schools are redefining their curricula to provide broader, more holistic educations. But, as I mentioned in the previous section, some of these schools (such as Penn and MIT) do offer specialized techno-MBA and joint-degree programs. These schools and programs, however, are not alone. Northwestern’s Kellogg, Berkeley’s Hass and MIT’s Sloan schools now offer specialized MBAs, majors, or dual degree programs in areas like real estate, sports management, biosciences, electronic commerce, and health care.

University of Michigan’s Ross School, although it does not offer any specialized MBAs, works closely with other schools within the university to create specialized electives and dual degree programs that are tailored to the needs and desires of the student. It, for example, currently has 20 such programs that combine MBAs with degrees in disciplines including area studies (China, Russia, Middle East, etc.), engineering (construction, manufacturing, naval and so forth), education, architecture, medicine, music and urban planning.

University of Chicago’s Booth School, meanwhile, is taking its own, very individualized approach to specialization. Although it does not offer specialized degrees per se, the school has leveraged its deep analytical and quantitative capabilities to create world-class reputations in fields including economics and finance. It is now applying similar quantitative methodologies to other fields—especially marketing. Although Booth has long taken a data-driven approach to marketing, it recently reached an agreement with Nielsen, under which Booth will become the academic clearinghouse for the company’s Homescan and ScanTrack databases and gain exclusive academic access to its MonitorPlus database. Its goal is to use this unique access to effectively reinvent marketing and to establish Chicago as the leader in and home of the next generation of data-driven marketing.

So, B-school specialization appears to be here to stay. But what will it mean to schools, to students and to the companies that recruit these budding specialists? That is the focus of my next blog.

The Trend Toward Specialized MBAs

Sunday, November 7th, 2010

Business schools have traditionally been aligned and have traditionally taught students along functional lines. Departments have been formed and managed, case studies designed, curricula defined and courses taught around relatively discrete disciplines, such as marketing, finance and international business. Students selected concentrations and mixed-and-matched courses from each discipline in accordance with their particular interests. These specializations, however, have traditionally been taught within the context of a broad management framework that was intended to provide students with the type of integrative perspective required to make complex, multi-faceted decisions.

Many mid-tier schools, particularly those with regional, rather than national/global reputations, saw a big limitation in this model. The vast majority of their graduates would not become the type of top corporate executives that would make full use of these integrative frameworks. Most companies were looking to these schools to provide specialists who could immediately contribute demonstrable value to their companies.

Rapidly growing numbers of mid-tier schools, therefore, are working to increase and demonstrate their graduates’ relevance to these employers by restructuring their programs around increasingly focused disciplines. Many offer MBAs that are targeted at preparing graduates for specific jobs or for work in specific industries.

The Birth and Growth of Specialized MBAs

The trend toward specialized MBA programs began in 1990 after the Association to Advance Collegiate Schools of Business International (AACSB) changed its accreditation guidelines to encourage schools to develop innovative curricula. The University of Wisconsin at Madison was one of the pioneers in this practice, launching its first specialized program that same year. It has since gone further than virtually any other university in its embrace of such programs. In fact, it eliminated its general MBA program altogether in 2004, opting for a program that consisted of 14 specialized programs including applied corporate finance, market research, real estate and urban economics.

Such specializations provided a convenient way for mid-tier schools to differentiate themselves from, and change the terms of competition with larger, better-known and better-funded schools. Then, as some of the early specialists began to improve graduate placement rates, the trickle of specialization grew into a flood. AACSB figures, for example, show that 298 U.S. business schools now offering specialized MBAs.

These schools often begin by introducing specialized programs in established management sub-disciplines, such as human resources, project management, information technology management, supply chain management and nonprofit management. A growing number of schools have created new specialties in areas that hold the promise of particularly attractive or rewarding careers, as in business analytics, asset and wealth management and brand management. New programs have since begun to emerge around currently hot fields including entrepreneurship, sustainability, corporate social responsibility, global management, innovation, social media and risk management.

Such programs are also proving to be popular among students. AACSB, for example, estimates that more than 20% of all MBA students are now enrolled in such programs and that this enrollment continues to grow at about 4% per year.

A Global Phenomenon

Nor has the trend toward specialized MBAs been confined to the United States. European B-schools, especially in France, were also early adopters of the specialization model. The ESSEC Business School, for example, launched its first specialized MBA program (in international luxury brand management—with sub-specialties in fields including fashion, fragrances, jewelry and cars) in 1995. It now offers a couple such programs, including one in hospitality management. The BEM Bordeaux management school, logically, offers its Wine MBA, built around a curriculum that is intended to prepare managers for careers in different aspects of the wine trade. France’s HEC School of Management, meanwhile, now offers 12 specialized master’s programs in areas including law and international management and entrepreneurship. U.K.-based schools, such as the Cranfield School of Management, offerings specialized degrees in areas including innovation leadership, international human resources management, logistics and supply chain management.

Asian universities have begun to follow suit. MBA India, for example, lists about two dozen schools offerings specialized degrees in fields such as real estate, construction, bank, travel and tourism, pharmaceutical and even rural management. The Hong Kong University of Science and Technology Business School, meanwhile, offers master degrees in e-commerce management, investment management and information systems. China, which has so far authorized about 60 universities to offer MBA programs, is following suit. The Beijing Institute of Technology, for example, offers MBAs in manufacturing and government management and Beijing University now offers an Aviation MBA. In fact, according to AACSB, more than 140 schools outside the U.S. now offer such specialized programs.

In other words, worldwide, 438 out of 599 AACSB-accredited graduate business schools already offer at least one specialized program—many offer multiple programs. Other schools are introducing specialized programs or integrated multi-disciplinary programs every semester. But while such programs may well differentiate these schools from those that offer more generalized MBA programs, how can schools differentiate their specialized programs from those offered by others? That is the topic of my next post.

Preparing B-Schools for the Challenges of the 21st Century

Sunday, October 24th, 2010

If student interest and enrollment is the criteria for the success of business schools, B-schools are on a role. Business, which has been the most popular college major for the last 15 years, continues to grow in popularity. It accounted for more than 21% of all bachelor’s degrees conferred in 2007–2008—twice the percentage of social sciences and history, the second most popular major. The MBA, meanwhile, has become the second most popular masters degree, accounting for 25% of all those conferred in 2007-2008. MBAs trail only masters in education, with no other discipline even close. And that was all before the recession—a condition that typically lead to a surge in college and especially graduate (particularly B-school and law school) applications.

B-Schools’ Growing Identity Crisis

But for all the student interest in B-schools, these institutions are facing something of an identity crisis. First, even business degrees are not protecting graduates from the ravages of the recession. Many graduates cannot find jobs at all and many of those who can are forced to take low-level positions far outside their desired fields and without the career or salary tracks they anticipated. They are struggling to repay big loans and, according to a study by Yale economist Lisa Kahn, most are unlikely to ever catch up with colleagues who had the good fortune to graduate in better times. Worse, the longer a new grad goes without a career-track job, the more difficult it will be to compete with more recent graduates for new positions.

With a recent Businessweek survey finding that only 38% of college seniors majoring in business having job offers, B-schools are going to incredible lengths to help their graduates find jobs. For example, they are scouring alumni networks, distributing tips via Facebook and Twitter, counseling students on resume writing and search and interview techniques and even teaching business dinner etiquette. The schools’ challenges, however, go deeper then the needs to address the immediate challenges of the recession. They are, for example, simultaneously struggling to retain their relevance, as by ensuring that:

  • Their educations remain relevant in an era where the nature and requirements of virtually all jobs—and therefore of education required to prepare graduates for them—are being fundamentally transformed by forces including technology, globalization and demographics (see a number of my previous blogs for fuller discussions of these new skills and education requirements);
  • Their pedagogies adapt to the rapidly growing need for managers and executives to think globally, transcend cultures, contribute to the success of teams and embody inter-scholastic, as well as inter-disciplinary perspectives;
  • The schools retain their attractiveness in an era where growing percentages of applicants —both foreign- and U.S.-born—are applying to increasingly credible European and Asian schools to prepare for overseas postings and increasingly global careers; and
  • The fundamental nature of a B-school education is being called into question by the ethical lapses that contributed to the financial crisis and growing calls to establish management a “self-policing profession”, like medicine and law.

So, in a period in which B-schools might otherwise be celebrating their popularity, they are instead being forced to rethink the entire nature of business education and their role in preparing graduates for a very new age. Not surprisingly, different schools are coming to very different conclusions:

  • Some B-schools, especially local and regional schools, are effectively narrowing their focus and converting traditionally broadly-focused programs into highly specialized curricula intended to prepare students for specific jobs;
  • Others, especially many of the world’s leading B-schools are redefining their curricula to provide much broader, much more holistic educations that are intended to prepare aspiring executives for a totally new era of management.

My next two posts provide overviews of each of these two trends and their prospects for addressing the challenges that are facing business educations in general and B-schools in particular.

Occupational Opportunities for the Next Decade

Sunday, July 25th, 2010

In my June 27 blog, Payoffs of a College Education, I discussed that the Department of Labor’s Bureau of Labor Statistics (BLS) 2010 Occupational Outlook Handbook portrays particularly strong growth in jobs for college graduates. These jobs will grow at a faster rate (15% versus 10%) than those that typically require less education and yield higher weekly and lifetime earnings and greater job security. In fact, every step up the educational ladder, from high school diploma, through some college, bachelor degree and professional degree (with a small exception for PhDs), tends to improve virtually every aspect of a person’s career path.

But the level of educational obtainment is a pretty high-level view of the job market. Although it does emphasize the value of graduating from college, it does not, in and of itself, provide much guidance as to which occupations offer the best employment opportunities, the highest earnings potential and the best opportunities for advancement.

Tomorrow’s Largest Growth Occupations

In 2006 (the study’s benchmark year), about half of all jobs (see Chart 3 of the handbook) in college-level occupations were concentrated in three broad categories—education (21%), healthcare (14%) and computers (13%). Adding two others, management (12%) and business and financial operations (11%) covers more than 70% of all college-level jobs.

A nice start, but still too macro a view to provide meaningful help in career planning. Medical jobs, for example, run the gamut from physician assistants to surgeons. Management jobs run from education administrators to CEOs. Jobs within each category have very different educational requirements (from bachelor or below through post-graduate) and are likely to produce vastly differing numbers of total job openings through 2018 (from 66,000 physician assistants to 1 million registered nurses) and growth rates (2% for CEOs to 50% or more for some IT jobs).

The tables supporting the Bureau’s conclusions provide details for multiple occupations in each of these categories. As one would expect, the greatest number of projected openings are concentrated in the three largest college-level job categories: education, healthcare and computers. The first two categories share a few similarities.

Both, for example, are:

  • Being driven largely by population growth and demographic trends;
  • Characterized by especially strong growth in one very big class of occupations;
  • Consist of a large number of moderate and relatively low-paying jobs, and more modest numbers of higher-paying (especially in healthcare) jobs that typically require a minimum of four years of graduate school.

Health care growth, for example, is driven overwhelmingly by the growth in need for RNs, which is projected to grow at a 24% rate and account for almost two-thirds of all listed healthcare openings. Although there will be big needs for teachers at all levels, the demand for K-2 teachers is growing at only a 10.8% rate, while that for post-secondary teachers (and some small specialty teachers) is tracking at 23%.

IT Professions

IT-related job trends are very different. First, although the handbook profiles only five distinct occupations (out of ten that BLS specifically tracks), all four of the specialized, high-skill occupations (network systems and data communications analysts, computer software engineers, systems analysts, and network and systems administrators) are slated for hyper-growth through 2018, at rates ranging from 28% to 53%.

These jobs, most of which require “only” bachelor’s degrees, also provide some of the highest salaries—more than twice the median for all occupations. Many, even during the depths of the recession, are already characterized by strong levels of college hiring, rising salaries and shortages of qualified applicants at all levels of experience.

Moreover, the need for IT skills is being driven not by demographics, but by the rapid, increasingly critical need to incorporate IT into virtually every business, every process and every “machine” (from PDAs and televisions through office buildings and jumbo jets). And this is just the start. Business decisions increasingly require real-time analytics and seamless, real-time collaboration tools. The Internet, meanwhile, is creating new businesses and new job requirements every minute of every day.

This being said, not all IT jobs are created equal. As I mentioned, four of the five listed categories are growing at hyper-rates. The number of openings for the fifth—computer programmers—is actually declining. This is not at all surprising. The demand for the lowest skill IT occupation, data entry clerks, has been plummeting for years. BLS now anticipates similar (albeit slower) declines in the number of openings for computer programmers. These positions, as I’ve discussed in a number of previous blogs, will be increasingly replaced—and compensation reduced—by a combination of:

  • Technology, including more automated development and test processes, software reuse and tools that can be used by non-IT professionals; and by the
  • Rapid growth in the availability and use of lower-priced, offshore IT professionals.

Moreover, while these forces are initially felt in relatively low-skill IT professions, they are already beginning to be felt in ever more demanding occupations. Increasingly sophisticated, policy-based IT management software, remote diagnostic tools and a growing trend toward the delivery of IT as an outsourced service will slash the number of people required to maintain an application, manage a given number of servers or support a given number of users. Moreover, as I have discussed in previous blogs, the number of offshore IT professionals is exploding, their education and training is getting much better and they are moving rapidly up the IT value chain, providing increasingly sophisticated services—including services that integrate IT skills into other college-level occupations.

So, while highly demanding technical specialties may offer promising opportunities for the next decade, IT professionals, like sharks, must continually move forward—or they will die. They must continually evolve their skills to address the most promising career opportunities. Most importantly, they must learn to apply these skills in ways that deliver not just “IT value”, but true “business value” to their company’s line-of-business constituents and especially their customers.

But as the number of opportunities for dedicated IT professionals is large and rapidly growing, this does not even scratch the surface of the need for IT skills in tomorrow’s job market. Virtually every college-level job in America is becoming, to one extent or another, an IT job.

This is not to say they must develop, manage and maintain their company’s IT infrastructure or applications. They must, however, be able to integrate a broad range of increasingly sophisticated IT tools into every aspect of their work. And I don’t mean that people must use word processing and email. Those are yesterday’s skills. Today’s professionals must also be fluent in Internet search, in computer-based collaboration and in social networking. Tomorrow’s professionals must seamlessly incorporate sophisticated information access and analytics tools into their day-to-day tasks and learn dozens of new tools and techniques that most of us can barely identify.

Over the next decade, virtually every professional will have to be an IT professional, as well as a professional in his or her own specific field.

Is College Still the Best Road to the American Dream?

Sunday, July 11th, 2010

My June 27 blog examined some of the high-level findings of the Bureau of Labor Statistics (BLS) recently released Occupational Outlook Handbook. Among the primary findings—university graduates have much better employment prospects, earn significantly higher weekly and lifetime earnings and suffer much lower unemployment rates than those with without these degrees.

The blog ended with the question: Given the economic advantages of higher education, why would anyone not get a college, or even graduate degree? This blog briefly reviews some of the reasons.

It is sad do say, but some people are simply not up to higher education. A good portion of those that are, are either too turned off by their experiences in primary and secondary schools, or have not received the type of education that will allow them to continue. This is prompting many educators and foundations, including the Gates Foundation, to look to community colleges as the lynchpin to improving higher education.

Although I will specifically discuss community colleges in future blogs, let’s focus on some of the reasons people do not, cannot or should not go to four-year universities.

The Cost Equation

One of the first and most frequently cited arguments against universities is the cost. According to BLS, college tuition and fees have soared 92% since 2000—almost double the pace of healthcare. And the rate of increase has accelerated thanks to the Great Recession, as the value of university endowments and government funding has plummeted. Tuition at some private universities now exceed $40,000 annually and even some state universities now charge more than $10,000. By the time you add in room and board, costs can exceed $50,000 per year for private universities and $20,000 for public universities. And this does not even begin to account for the opportunity costs associated with going to college—much less graduate school—of 4-10 years of earnings that students forgo while in school.

These costs are making it all but impossible for lower-income families to foot the bill, unless their children qualify for very generous scholarships or find particularly remunerative part-time and summer jobs.

Without even getting into the ways in which escalating education costs are likely to exacerbate already high levels of income inequality, these costs are throwing many students into debt, before they even get a chance to begin their careers. Statistics compiled by Credit.com show that students graduate from college with an average of $20,000 in student loan debt, plus an additional $4,100 in credit card debt. And then there’s graduate school. According to the AMA, 87% of medical students graduate carrying educational loans and graduate with an average of $156,456 of debt.

Starting out with high levels of debt is bad enough. But if these students have the misfortune of graduating into a deep recession, they may not be able to find a job that will allow them to pay off the debt. Or if they do find a job, it is likely to be a minimum wage position that has little to do with their chosen field, and may make it difficult to ever get onto a true career ladder. Even the lucky graduates, who do get jobs in their field, often must settle for lower-level positions and lower salaries. A study by Yale of Management economist Lisa Kahn, for example, found that new graduates who join a company during a recession (1981 for her study) not only start at lower wages, but generally continue to earn lower wages and find it difficult to compete with younger, more recent graduates when normal hiring patterns resume.

Education Quality Compromises

That is for those who graduate. The sad fact, according to Harvard economists Claudia Goldin and Lawrence Katz, is that while the U.S. sends a higher percentage of high school graduates to college than any other OECD country, it is second to last—ahead of only Italy—in graduating these students. About half of all students who enroll in four-year universities—and two-thirds of those in two-year colleges—do not graduate at all. They forego income, pay tuition and room and board for 1, 2 or 3 years and never earn a degree. And, according to the William Bowen and Michael MacPhearson book, Crossing the Finish Line, this drop-out rate is even higher for lower-income students. And since college drop-outs typically earn 30% less ($33,000 compared with $47,000) than do grads, they are unlikely to recover much of their investment.

And this does not even consider one of the central premises of the Bowen/MacPhearson book, that many colleges—and especially many of those attended by highly-qualified lower-income students—do a better job in “producing dropouts” than in educating and graduating students. Education quality—not to speak of availability—is likely to further decline as a result of the state funding cuts, college endowment losses and alumni contribution shortfalls engendered by the recession.

University of California budget cuts, for example, are forcing schools to increase tuition by 32%, lay off and cut salary of faculty and staff, cut programs and classes, increase class sizes. California State University, meanwhile, is being forced to stop accepting applications for the 2010 spring term and cut total system-wide enrollment by 40,000 students over the next year. Students who are already enrolled are finding it increasingly difficult to get into oversubscribed classes that are required to meet graduation and major requirements.

Some prospective students, especially those from lower-income families, are being foreclosed from higher education altogether. Those can afford the cost will find it more difficult to get required classes and may have to postpone graduation. Meanwhile, the limited availability of jobs is prompting many who would not otherwise seek higher education to go back to school. Dropout rates can be expected to increase over the next few years and more students will graduate with more debt.

The Education-Job Market Disconnect

What is a new high-school or college graduate to do? With jobs scarce—especially for young adults—graduates are increasingly choosing to go back to school. Schools, however, are cutting back on the number of students they can accept, increasing tuitions and reducing course offerings.

A relative handful of students will get into (and be able to pay for) the best schools, major in the fields most likely to qualify them for attractive, well-paying jobs and graduate into a robust economy that will value and pay for their skills. The vast majority, however, face less attractive options. They can:

  • Skip higher education and possibly relegate themselves to a life of less desirable, low-paying, low-security jobs; or
  • Go to school (if they can afford it), accumulate more debt and risk graduating into a still slow economy.

Luckily there are more attractive alternatives to each of these fates:

  • A number rapidly growing fields, in industries including health care and higher education, still offer attractive, relatively well-paying jobs that do not require bachelor degrees (some registered nurse positions, insurance agents, police, medical assistants, etc.) or to a lesser extent, even associate degrees (cooks, welders, truck drivers, carpenters, etc.). In fact, of the 30 jobs projected to grow at the fastest rate, only 7 typically require a four-year degree;
  • Those who do go to college or graduate school can pursue fields of study, especially in finance, accounting and STEM-related disciplines (science, technology, engineering, math) that lead to jobs which companies currently have trouble filling and are expected to produce large numbers of well-paying jobs in the future (physicians, pharmacists, post-secondary teachers, software engineers, accountants, etc.).

My next blog post will drill down into findings for some of these bachelor-and-above-level jobs, examining categories and specific jobs which offer the best employment opportunities, the highest earnings potential and ideally, good opportunities for intellectual and psychic fulfillment.