Soft Skills Training Central to Value of an MBA

Financially speaking, the value of an MBA is well established.  MBA jobs offer lucrative rewards. Depending on the business school, as well as the graduate’s chosen industry and geography, starting salaries can stand at anything between US$30,000-120,000, according to the QS Global 200 Business Schools Report.

Unlike the majority of graduate-level courses, MBAs focus on general business principles and aim to build upon the foundation of the candidate’s professional experience rather than their academic background.

However, despite this requirement for practical experience, the value of an MBA has been questioned in some quarters for being overly academic and consequently divorced from reality. David Garvin, current C. Roland Christensen Professor of Business Administration at Harvard Business School and author of Rethinking the MBA discovered that a lack of practical understanding was one of the main weaknesses of graduates identified by industry while researching his book.

“A criticisms of MBAs for many years has been that they know a lot, but they just don’t know how to put it into practice. They are a little weak when it comes to understanding how to get things done,” posits Garvin in a video posted to YouTube by the Harvard Business Review.

In a way the MBA’s status as the leading degree of business and management education and attendant popularity has almost served to work against its ability to provide the real-life learning which might address this issue. Professor Richard Thorpe, pro-dean for research at Leeds University Business School, highlights in a piece for the Association of Business Schools, that at prestigious UK schools like London Business School and Manchester Business School, the ability to give students an education squarely rooted in real-life experience has almost been impaired by their success, as they have grown and have come to attract a  greater number of students.

“Practitioners more regularly experienced a learning process that involved them going out into organizations and working on real life problems and this reinforced the close link between theory and practice…[but] the constraints large numbers place on resources…[began to emerge]” says Thorpe.

Garvin believes that in order to the value of an MBA to be retained, curricula must be based around the cultivation of three essential areas: “Knowing/knowledge, doing or skills and being/a sense of identity.” He foresees a greater balance between theory and practice in the future, although achieving this comes with its own challenges. “How do you run a performance review, and also what are the roles and responsibilities of a business leader today?”

From Harvard Business School in 1908: The evolution of a degree

However, this is not to say that MBA has not changed. Ever since Harvard Business School introduced its first MBA in 1908, the ability and propensity of business schools and other stakeholders to incorporate criticism and adapt the MBA to meet modern challenges should not be understated.

Two 1959 reports that questioned the qualifications and caliber of staff and students triggered a raising of admissions requirements and an improvement of the quality of teaching. This strong academic focus, while effective in the American context, drew criticism from Europe and in response, companies and organizations, rather than academic institutions, set about starting their own business schools. INSEAD, IMD, Henley and Ashridge Business Schools were all started by companies and reflect the strong European commitment to industry.

New business challenges are continually emerging, ergo the MBA must continue to evolve. The willingness of European business schools to work with industry allowed these institutions to compete with their American counterparts and put pressure on them to strengthen the practical element.

Globalization has naturally forced business schools across the board to internationalize their purview. Developments have also meant that the range of professions to which MBA study is relevant is no longer by any means limited to financial services and management/strategy consulting.

Soft skills come to prominence

Alongside these developments, the understanding of what management skills are have changed, with soft skills becoming increasingly valued in MBA jobs over the past 50 years.

We see this reflected at business schools. Stanford Graduate School of Business’ interpersonal communications class (nicknamed ‘touchy feely’), has been around for 40 years. Columbia Business School has also been pursuing the development of students’ soft skills in its own way, encouraging students to learn the art of meditation as a means of managing stress, while the UC Berkeley Haas School of Business has taken the approach of reigning in overconfident ‘type A’ personality traits in students.

However, despite the growing focus on and awareness of the need for soft skills, business schools have faced and continue to face hurdles in their implementation. Indeed, it remains the case that employers are somewhat unsatisfied with the soft skills possessed by MBAs, though in some departments – leadership being a key one – the picture is a little more positive.

A study by DePaul University, referenced in the Wall Street Journal, reveals two key soft skills, ‘the ability to manage people’ and ‘decision-making’, which managers themselves identify as essential, were only covered in 10% and 13% of required classes respectively. Skepticism from students can also be a hurdle: “Having a professor that's never led an organization teach me leadership out of a book, really doesn't do anything for me," Mike Marchack, program manager at Google and a 2008 Columbia Business School alumnus states in the same article.

The demands of MBA jobs mean that business schools must continue to improve and build upon the soft skills training they offer. Top employers such as BASF Global and Deloitte have trained professionals and sophisticated strategies to identify soft skills in candidates. For business schools, it’s not just a question of how to incorporate soft skills into curricula, but in what the future value of an MBA will lie.

Professor Garvin’s book Rethinking the MBA, the idea for which originated during the Harvard Centennial, deals directly with this issue: “We had a number of workshops…one of them was about the future of business education…one of my colleagues asked me if I would be the one to lead that process, and that’s what got us started.”

Conducting case studies and focus groups across all the major institutions, Garvin discovered a positive response from most business schools, despite their competitive nature: “Once we got started, the first thing we heard from business schools was; thank goodness you’re doing this, we all need to take a closer look at business education.”

The research reinforced some old criticisms of business schools, such as the need for a greater balance between the academic and the practical. However, after the Great Recession deans and business executives emerged with new criticisms and called for further adjustments; to expose students to the roles and responsibilities of business leaders early on, while simultaneously providing them with a deeper understanding of the risk of uncontrolled market capitalism.

When it comes to providing the soft skills training necessary to meet the demands of MBA jobs, the same challenges as ever continue to face business schools – how to impart such personal capacities?

 “At the end of the day, it's relatively easy to teach people how to run financial models…what's challenging is to lead change, to manage," explains Eric Hirst, associate dean for graduate programs at McCombs School of Business at the University of Texas at Austin.  Similarly, employers themselves also recognized the challenges in equipping students with these skills outside of the work context, “Those are tough things for an MBA program to teach," says Kelly Marchese, a principal in Deloitte’s strategy practice. "Some of it you just have to learn through experience.” (see the WSJ article linked to above for quote sources).

Schools it seems are willing to rise to the challenge, reinforcing curricula changes with more practical experience, incorporating various social and cultural norms to induce long term change.  The ‘Hippocratic Oath for Management’ proposed by HBS dean Nitrin Nohria is an example of the desire to effect profound change, even at the most prestigious institutions.

“An oath is a public commitment,” reflects Garvin. “In that sense people are more likely to stay committed to the values they own up to publicly in front of others”.

When it comes to systematic change, says Garvin, one of the main obstacles is simply the fear that change is impossible. However, practice has shown that this is not the case. “We have examples from countless institutions where these practices have been put in place.”

As the idea of a Hippocratic Oath suggests, it can be looking to other disciplines that could provide business education with the inspiration it needs to deal with both its own internal challenges, and those posed by the world beyond. “Every entering class at Harvard Medical School consists of 600 students and the faculty numbers 10,000, including all of the doctors in the 17 affiliated hospitals who run clerkships, lead tutorials and run small group sessions,” Garvin reflects. “The same model could be applied to business…Harvard Business School could mobilize its alumni to help lead projects in the field.”

It is clear that if the value of an MBA is to be retained, it must constantly evolve to meet the challenges of the worlds of business and management. But it is also clear that leading institutions, like Harvard Business School, are acutely aware of this – and where these schools lead, others will no doubt follow.