A countermeasure to business school education

Global temperatures seem to be rising, but it is still cold in Boston in the winter, and I am getting old. So, a few years ago, I gave some thought to the problem of being cold and being old and decided to do something bold: I became a temporary professor during the Boston winter at business schools in warm places with emerging economies. It was fun, and I learned a lot (and I hope the students did too). By going to the gemba of the great industry that is the MBA, which began in the United States in the 1880s and is still spreading across the world, I had the chance to grasp the situation, deepen my understanding of the problems and even try out some countermeasures.

Perhaps the most surprising discovery, which is what usually happens when we encounter the gemba for the first time, is that business schools don't actually teach management. Instead, they teach functional skills, based mainly on tools: strategy, financial analysis, accounting, marketing, purchasing, etc.

Even in operations management courses, the small part of the business school world I can take part in, what they really teach is mathematical operations: queuing theory, economic order analysis, bottleneck analysis, variation reduction (using tools from W. Edwards Deming's kit for six sigma). And note that “operations” are restricted to transactional activities - production in the factory, claims adjustment at an insurance company, patient flow through a hospital emergency room. In the real world, every value-creating activity in any organization is an “operation,” and each one needs to be managed for stability and improvement.

General management is sometimes touched on superficially in business policy courses, where students may learn about the organization chart as a channel of authority and about the tools of modern management: setting objectives through key performance indicators (KPIs) as part of a top-down annual plan and budget, direct reports reporting on their KPI promises, distributing rewards for good performance and punishments for bad, and delegating problems and improvement activities to specialists. But these points are covered quickly in a few lectures with no opportunities for students to actually practice management. The assumption in the business school world seems to be that graduating students will find jobs in organizations with “complex pre-existing management systems” and that students need to adapt quickly to the practices in their new environments. Training them in a different and rigorous way to manage might even be a disservice that threatens their career progression!

The little that business schools teach about management is taught in classrooms: theory by PowerPoint and practice through case analysis, the Harvard Business School innovation at the turn of the 20th century. Their notion of going to the gemba is the quick “study” trip to see the tools in action, followed by a discussion back in the classroom.

The dynamics of case teaching are particularly interesting. The student has all the available information written in the case - no deeper investigation at the gemba is possible to check whether the data are what Taiichi Ohno wanted: facts. Accurate, timely and relevant (for me, getting to the facts in order to clarify the problem is the hardest and most rewarding part of management - the left side of the A3).

So the goal for the student is to quickly define the problem and quickly find the solution, using the data and the tools taught in the course, and to look as confident as possible while developing a PowerPoint presentation to share the conclusions. Is it any surprise that the world is full of business-school-trained managers - the ones who give lean practitioners headaches every day -, who work in conference rooms far from the gemba to quickly define the problem and prescribe the solution while displaying absurd self-confidence? (See Professor Henry Mintzberg's recent article on how this has worked out in practice when business school students become CEOs and perform worse than CEOs who have never been near a business school - MBAs as CEOs: Some troubling evidence - in English).

Let's imagine an experiment: Suppose business schools didn't really think their practices were effective or the best way to create good managers. What could they do then?

One should begin by asking what “management” actually is. In our lean world, we believe it is (1) reaching consensus on what is important for the organization to achieve (through hoshin planning involving all employees at all levels), (2) taking initiatives to tackle important problems or deploy important initiatives A3 by line managers) and (3) creating and sustaining basic stability in every “operation” (through daily management). And, most important, we need to agree that management is not a theory but a social practice that can only be mastered through repeated cycles of daily management, A3 analysis and hoshin planning with the help of a teacher (or coach or sensei, if you prefer) who engages with frontline value creators and lower-level managers.

This suggests that the heart of any management teaching must be at the gemba, directly engaging the people who do the real work of value creation. So, instead of analyzing problems and jumping quickly to solutions without knowledge of the gemba, business schools need to find the gemba on an ongoing basis for each student and take all students through extended cycles of hoshin, A3 and daily management. The students would win, so would the organizations that hire them, and - I believe - teaching would become a more satisfying occupation.

Doing this would require business schools to develop long-term relationships with the organizations that provide the gemba experience and to become, in effect, their management training centers. This seems like something hard to achieve, but I don't think it is crazy. Modern management - with its functional tools - was spread around the world by business schools after World War II and continues today in new business schools created in the emerging economies where I teach. What is needed now is the courage to try experiments along a different path. Any volunteers to do an A3 analysis for business schools?