Warren Buffet once said that only when the tide goes out do you find out who has been swimming naked. The downturn is here, and business schools look very exposed.
The value proposition for business schools was already looking shaky. Students often pay $200K+ while taking 2 years out of the workforce. However much they may be learning, networking, or branding, that is a very steep price.
With this pandemic shutting down most in-person classes and limiting access to international students, many business schools face falling off a cliff. Students won’t want to pay full price for distance learning, and schools have bills to pay.
I suspect the ones that survive will be the strongest brands and the most innovative organizations. Shorter programs, part time classwork, hybrid online and in-person course work, new kinds of networking opportunities . . . I’m not sure what the solutions will be, but the system faces major changes.
It’s ironic that institutions designed to train leaders have been slow to innovate and are largely unprepared for this crisis. Universities responded to sky high tuition by creating more degree programs. This oversupply has been years in the making, and a strong economy covered up a weak business model. Now the pandemic means a reckoning is here.
As a business owner, I look for smart, hardworking, team-oriented people to add to my team. An MBA is supposed to signal these traits, but it’s no guarantee. Over the years, I’ve hired MBA graduates who didn’t work out. Personally, I have an undergraduate degree in business but choose not to pursue an MBA. Learning on the job worked quite well for me.
The vast array of online courses available today only make the MBA value proposition weaker. There is certainly still a place for business schools in the education landscape. But the market is calling for fewer MBA graduates and new innovative approaches to training business leaders. The pandemic is forcing some long overdue changes, and I look forward to seeing how this plays out.