Everyone is looking to start-ups in Silicon Valley to find the next big thing in the business world, but what if the next big thing in business education isn’t coming from a start-up or even a big name school in the US, but from established institutions in Europe.
I was fortunate to run a session at the latest EFMD conference in Grenoble on how business schools are facing global challenges. The session, and the conference itself, gave me the chance to talk with business school directors and administrators about what is keeping them awake at night and where the future of the sector lies. The message was clear – the real excitement is not about the future of the MBA, nor conventional executive education. Instead, their focus was on the growth potential of pre-experience Masters Programs, and in particular the Masters in Management.
Why a pre-experience Masters degree, and why now?
Many practitioners are concerned that open enrolment executive education, for example, is under serious threat from MOOCs and providers outside the business school community. The announcement of a partnership between the Financial Times and IE Business School to provide custom education for executives is an interesting twist on this, and leaves me wondering if the FT will soon feature as a participant in it’s own rankings.
At the same time research from GMAC suggests that demand for the part-time MBA is declining, with 53% of surveyed programs reporting applicant numbers down last year. And while the world’s top business schools continue to thrive, many are wondering whether the conventional, full-time MBA market is reaching saturation point.
While this all paints a pretty glum picture for the future of business education, GMAC statistics are pointing towards consistent growth in other categories – namely that 58% of Masters in Management programs are reporting increasing applicant numbers, following a 61% increase the year before. Could these programs constitute the long awaited rescue like the cavalry riding over the hill at the last minute in some old Western?
At first sight this does seem perfectly credible. The number of GMAT test takers aged under 25 is up almost everywhere apart from in North America, the UK and, for some unfathomable reason, Portugal. But why?
The reason may be a simple and compelling one – the growing popularity of early career programs among major corporate recruiters. In Europe MiM hiring has overtaken MBA recruitment, although it does still lag well behind in the MBA’s traditional home of the USA.
The European School of Management and Technology (ESMT) in Berlin, whose full-time MBA ranked #3 among international business schools in the latest Bloomberg BusinessWeek ranking, launched an MiM last year after an intense design phase with German corporates. Program Director Nick Barniville explains, “We found that companies have the most trouble finding analytically-minded graduates from the sciences and technology who have an understanding of the principles of management, so we designed the program to address this need. We included languages and internships, and are hitting a sweet spot with recruiters in Europe who are often better structured to hire early career graduates than MBAs.”
The CEMS alliance of 29 schools has added 11 new corporate partners in the past year, and now counts over 70 companies from Airbus and McKinsey to Facebook and Dropbox, supporting and recruiting from its Master’s in International Management program. Phillipe Louvet, former HR Director of one of the CEMS Corporate Partners, L’Oreal, indicates that a big part of the attraction of MiM graduates is their flexibility and openness to new ideas. “MBAs often come with a certain pretension and an unwillingness to learn new business models,” he explains, “whereas MiM graduates have a freshness coupled with some hard experience which means they are ideally placed to develop the flair and feeling they need to truly understand the customer.”
The MiM is also a great way to attract women into the corporate talent pool. In 2014, over half of the applicants to MiM programmes were women and this is drastically increased in Asia. The graduating class at HEC Paris SEM is 60% female, while at Tsinghua SEM, 65% of the MIM students are women, rising to 80% at HKUST SEM.
And then there is the issue of mobility and willingness to take risks. “It’s understandably more difficult to embrace these when you might have a family and almost certainly have a large debt left over from you MBA than when you are younger,” explains CEMS Executive Director, Roland Siegers, “And the more you discover mobility when you are young, the more you will be mobile later in your life.”
The sweet spot for MiMs and MIFs
And it’s not just the pre-experience MiM that is in high demand. Jacques Oliver, Program Director of the Msc in International Finance (MIF) at HEC Paris, says that the recruiting indicators are very good, despite the slow recovery of the financial services jobs market for MBAs. “M&A is picking up like crazy, after under-hiring in past years. Employers are drawn to our graduates because they know exactly what they are going to get, and while much of the demand is coming from the UK and the rest of Europe, we are seeing increasing activity in the Middle East and Asia.
For those willing to embrace the MiM and MIF model with enthusiasm, the future may be looking very bright. And if they do fulfil its promise, it may even swing the balance of power from the US dominated business education market to Europe. We are regularly reminded that the likes of Tuck and Wharton invented the MBA as we know it, but long before the first students took their seats at these august institutions the Chambers of Commerce in France had created Ecoles de Commerce such as ESCP, EMLYON and HEC Paris, the first as long ago as 1819 when James Monroe was in the White House. And in the UK a school as well-respected on the international stage as the London School of Economics (LSE) has always focused on this area, refusing to offer a conventional MBA. HEC Paris launched the first MIF back in 1986 at the time of London’s ‘Big Bang’ of financial deregulation, while they and three other European business schools, Spain’s Esade Business School, Italy’s Universita Bocconi and Germany’s University of Cologne created the cross border CEMS MiM back in 1988, a year before the fall of the Berlin Wall.
However nothing is ever perfect, so let me raise one challenge for the MiM which might hold it back. One which, in my view, needs to be addressed with some urgency and a combination of imagination and good, old-fashioned practicality.
Despite its many critics, spear-headed of course by Henry Mintzberg of the Desautels Faculty at McGill, the MBA has done a fantastic job on its own branding. Unless you are a professional mortgage broker or a close follower of African footballers, the three letters have come to mean just one thing in even the most obscure corners of the world. However, so far the pre or early experience masters is at the opposite end of the branding spectrum. The problem seems to lie in the sheer range of terminology employed by providers at the moment.
Take the MiM, for example, which typically refers to a pre-experience degree that provides general management knowledge for recent graduates with relatively little work experience. While most of Europe refers to this as the Masters in Management (MiM), the likes of Duke’s Fuqua, USC Marshall and Melbourne in Australia talk about a Masters in Management Studies (MMS) for what is essentially the same thing. And to make matters worse Yale SOM has further muddied the waters by creating a Masters in Management for people who already have an MBA!
Masters in Finance don’t fare much better. While MIT Sloan and Princeton refer to an MFin, HEC Paris, LSE and LBS use the term MIF, while NYU Stern has a Masters in Global Finance and St Gallen in Switzerland has a Master of Arts HSG in Banking and Finance.
Of course I am all for personalisation and nuance, but this plethora of titles is simply confusing the market. It’s bad enough to confuse potential students, but the most important thing is to deliver clarity and simplicity to those tasked to recruit into the world’s best companies. Find me a business school that doesn’t think it can teach the importance and effectiveness of good branding and I will eat my proverbial hat.
Chase the dream – not the competition
So perhaps it’s time for business schools to listen to their own lessons before the opportunity is lost. MiM programs don’t need to chase the market of existing GMAT test takers – this is their chance to go out and create a new market. Let’s hope they don’t let this ‘next big thing’ slip through their fingers.
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