‘I am not comfortable with the MBA oath’

Gita Piramal, chairman, Ergo, and business historian (left), spoke with Andrew Likierman, dean,  London Business School, on the status of business school education after the financial crisis, the MBA oath and the quality of business books. Excerpts from the interview:

Following the financial crisis, there are questions over the role and responsibility of business education and the way it is dispensed. What are your views?
The key to this question is, what was a school doing before the crisis, and what, therefore, would need to change in order to respond to it. As far as business schools are concerned, they vary quite considerably in the way they have approached the financial system. Some schools clearly had a more institutional view about the way capital markets worked. And a lot of the faculty was involved in transmitting messages about the capital markets. I think those are the schools that have had to rethink the way they see these things. At the London Business School (LBS), we didn’t have a corporate view, we had many different views and we allowed students to make up their own minds about it. Therefore, we have somehow not felt that the financial crisis meant we need to change what we do because we have always adapted to circumstances.

What do you think of the MBA oath?
I am cautious about it because I am concerned about the question on what is it that one is committing to that can then provide the basis for any kind of follow up or the implications of any action that they take? Simply to say I will behave ethically is not in contention. The question is, what is the nature of the commitment that is being made here? I am cautious about suggesting that people should take such oaths. Certain people will not always behave as well as we wish them to, and in that case, what kind of reflection does that have both on the individual and the institution? So by allowing ourselves to commit in an institutional way, the institution lays itself open to the possibility of being deemed culpable if individuals fall short.

Tell us something about the free-for-all that happens at the London Business School…
Let me give you an example of what we mean by free for all. I am a director of a bank and this bank believes there should be universal banks that combine investment banking and retail banking and I feel, together with the rest of my directors from the bank, that’s the way we ought to be proceeding. And we believe that there is huge strength to be derived from a universal bank. One of my colleagues, a senior colleague who I respect hugely as an individual, believes that banks should be broken up and investment banks should not be in the same league as a retail bank, and we have argued about this in public. So we are clear that we put forward each of our views and then people can make up their minds on who they think has the right answer. It is a free for all of ideas and we believe people who come to us are mature people who are able to make up their own minds, and we then provide them the raw material for the arguments not assuming that they ought to believe this as a matter of course in terms of the way in which things ought to be done.

Recently, Nitin Nohria, the dean of the Harvard Business School, made a very public statement saying he is no longer convinced that the case study method is the only way to teach. What do you think?
As far as the teaching methodology is concerned, we have always believed that one cannot teach by cases alone. The notion that somehow it is all doable by cases is not applicable to a well-run MBA course. So we have a combination of text books and case studies. We believe that people should be involved in experience. For example, in the two-year MBA, the huge advantage is having a summer internship, where people get a very different kind of experience, probably one in which they would want to carry on working once they complete their course. And they bring that experience back to the second year. So here you have got three things — the textbooks, the case studies and the actual experience. And if that allies with all the ways in which technology can help to provide a richness of learning experience, the evidence seems to be that students believe this is the logical way to learn, and provides granularity in learning.

People going for an MBA see it as a good opportunity to network. But unless you have some kind of way of failing people…
We do fail people.

How do you do that?
One reason is they fail their exams so they don’t get their degree. You see, people arrive after a very, very careful screening. We try and make sure people who come in are going to get out from the other side. And I think all major schools have the same experience, which is, it is incredibly wasteful to bring somebody in, give them a scarce place and then to fail them. But we do fail people.  On the networking point, one of the nicest things about my job is that I meet people all the time who say that they have been changed by the experience of coming to a business school. And it isn’t just a question of networking and then meeting somebody and getting a better job, and that’s not absolutely what we are about. For networking, you don’t have to come to a business school. There are better ways. Going to a business school is a very odd way of getting into a network.

All B-schools differentiate themselves in some way: Kellogg for marketing, Harvard for leadership, and the London Business School for the global manager. Where does the global part come in?
Our students, faculty and content are actually global. Our courses are not British courses for British people with a few extra people added on. Many courses in the American universities are admirable but they suffer from the problem of huge American dominance with some additional international dimension to them. We don’t have that approach: 90% of the faculty are not British and they come from 30 countries. In terms of the global nature of what we teach, this diversity goes into the content and is something that many schools do not have. We don’t believe that physical presence is the answer to a global issue.  Also, we feel our faculty should be together as a group. That’s what makes LBS a special place for the people who come there. I am hesitant to split the faculty in the way some other schools have done. The danger is that faculty can feel a little isolated and they don’t have the intellectual stimulus and buzz if they are a part of some outlying campus. Look at this autumn’s intake at LBS. We have just brought in nearly 900 students for seven different degree programmes. They come from more than 100 countries, and, as it happens, India is the third-largest group in that.

The first two being?
The US is the largest group followed by the UK. There are more Americans than British coming to the LBS.

Why don’t people read business books?
It is a very, very good point. Many business books are not very good. A lot of them appear to provide instant solutions to very, very complicated problems, which we know is not applicable. The fact is, life is not that simple. Secondly, a lot of them are not very well written and so are difficult to read. Many people don’t write naturally well and the editing is not very good. So the result is you have poor
quality books. The difference between a good book and a bad book is really a difference between a good academic and a poor academic. If you are simply repeating the same stuff all over again or you are simply making wild claims, one doesn’t pay much attention to that. If somebody has got something that is
well-grounded in the work they have done, then they are presenting original ideas; that is good research. And if you can
communicate good research, that’s fantastic.