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Home arrow Environment arrow The Future of Leadership Development: Corporate Needs and the Role of Business Schools


Causes of the problem - and what needs to change

Making changes that would make business schools more effective in their mission of leadership development requires an understanding of what gets in their way or diverts them from this task, and then working to change those things. The list of potential problems is long, but here I focus on three of what I believe to be the most important: (i) the fact that business schools are measured and evaluated using criteria that are at best unrelated to leadership development and at worst are antithetical to that goal;(ii) because of competitive dynamics and the ranking game, business schools have tended to market themselves and create identities that would be unlikely to attract the right people for the right reasons; and (iii) the evaluation of faculty is, for the most part, either orthogonal to or inconsistent with producing an emphasis on leadership development.

Measurements and rankings

Khurana (2007) argued that business schools were originally founded to educate a professional class of managers and have subsequently retreated from that task, leaving the professionalization of the management project largely uncompleted. Others, such as Howell (1984), have argued that business schools have always been vocational or trade schools with a limited, careerist orientation and few professional aspirations or accomplishments. But regardless of what business schools may have set out to do, there is little doubt that under various institutional pressures - including pressures in some instances from their universities to become not only self-sustaining but also cash cows - business schools today face an identity crisis as to how much they want to emphasize the “business” and how much attention they pay to the “school” part of their name. Or, as Dipak Jain, the dean of the Kellogg School at Northwestern University, put it so nicely during one conversation, business schools and their students struggle with the tension between “earning” and “learning”.

In this navigation of their social and institutional environment, most business schools are quite concerned about their position in the various rankings or league tables published by ever more newspapers and magazines. Such concern on the part of business schools leaders is quite rational. Fee et al. (2005) found that the turnover of deans increased following a drop in a school’s BusinessWeek ranking, and following deterioration in the student placement score as assessed by US News and World Report. Recruiters, potential applicants and alumni all pay attention to where schools rank and to changes in these ranks, and are quick to voice concerns should there be any negative publicity involving school rankings. There is therefore little debate that such rankings are important and have influenced business school curricula (Morgeson and Nahrgang, 2008). Indeed, many writers have expressed the view that there is too much attention paid to the rankings (see, for example, Gioia and Corley, 2002; DeAngelo et al., 2005). Unfortunately, there is also evidence that the rankings, as measures of school quality, are not necessarily very good. Dichev (1999), for example, found that there was little correlation between changes in the BusinessWeek and US News rankings, and that business school rankings had a tendency to revert to what they had been earlier. Morgeson and Nahrgang (2008) also observed that school rankings were highly stable over time and that some of the best predictors of school rankings were stable characteristics of institutions that were difficult, if not impossible, to change.

One of the oldest findings in organization studies is that measurements affect behavior - that what gets measured gets done, and this effect holds in settings ranging from medical practice (McGlynn, 2004) to education (Wilson et al., 2006). What the various rankings measure primarily are indicators of job market success and “customer” (student) satisfaction, along, in some cases, with indicators of school selectivity. Morgeson and Nahrgang (2008) found that recent business school rankings were driven largely by student perceptions of placement results. Such measures focus both students’ and business schools’ attention on outcomes emphasizing brand-building and job-finding, and ignore learning and character development. They are therefore, at best orthogonal to the mission of leadership development.

So, for example, the Wall Street Journal’s ranking of executive MBA programs assesses the increase in salary on completion compared to the cost of the program in an effort to measure return on investment. BusinessWeek bases its rankings on the survey responses of students and recruiters, with a small weighting given to faculty research output. The Financial Times includes both recent salary level and the growth in salary in the three years following earning the MBA degree, among other factors, and Forbes also assesses the additional salary earned over five years after the MBA compared to the cost of tuition. US News incorporates starting salary as a significant component of its rankings (DeAngelo et al., 2005).

Maximizing income or increases in income favor some industries and jobs over others. In the recent past, consulting and various financial services firms, ranging from investment banks to private equity to hedge funds, have paid the highest salaries. Consulting and financial service jobs invariably offer more money than line management positions, or government or social sector jobs. There is at present little evidence on the question of whether the rankings, with their emphasis on salary, affect students’ career preferences or what business school placement offices do to encourage higher-pay job placement. But there is also little doubt that large economic offers to people who may have both overhanging graduate school and college debts will affect job choice to at least some degree. So, career dynamics and the concern with placing students in high-paying positions work against job placements that are likely to provide as many opportunities for the development of leadership skills.

Furthermore, the rankings do not follow students over their whole career to see to what extent they achieve leadership positions and how well they perform in those positions. Nor do the various league tables measure values, leadership skills or ethical behavior, including cheating. Assessing these other, possibly better measures of leadership development requires more time and resources than the publications - which are, after all, mainly interested in selling copies and advertisements - want or need to expend. Indeed, the overemphasis on starting salary and salary increases after graduation as the primary criteria by which business schools are evaluated has prompted the Aspen Institute, among other organizations, to try to create alternative measures that could assess other dimensions of the effects of business education and its social impact. But the business publication rankings dominate the media as well as the attention of deans and the schools’ various constituencies. Unless and until such rankings concern themselves with schools’ performance in developing leaders rather than job candidates, it will be difficult for leadership development to gain much additional traction.

Some observers have noted correctly that nothing can be done about the rankings, and that only a few, very high-status schools can afford to opt out of the process. While it is certainly true that various media have free rein to do and to measure what they want, it is important to recognize the extent to which the business schools have, collectively, made the problem worse. If, instead of endlessly complaining that the various publications use the wrong measures often inaccurately or incompletely assessed, the schools - through one of their associations such as the Graduate Management Admissions

Council or the AACSB - promulgated their own, more desirable and more accurate assessments, there would at least be a competitive alternative to the various rankings published by the newspapers and magazines that currently control the rankings game. The point is that, in the absence of better, more accurate information, any information is going to receive attention. If business schools are serious about their mission of leadership development, they should measure this activity and their effectiveness, and make such assessments public.

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