22
Mar

system_is_normalYou can disregard the underlying conclusions of Noam Chomsky and Edward Herman’s book Manufacturing Consent. But you have to admire their ability to delineate between systems and conspiracies.

The media, from my layman perspective of Chomsky and Herman’s central point, is a business. Like any business, it operates to generate a profit. Anything that acts against that fundamental premise isn’t tolerated within its system. Like an ecosystem that works to destroy a threatening virus, stories that dissent against the media’s main drivers of profit (thus the elite that gain the most from its prosperity) simply aren’t tolerated.

Chomsky and Herman are saying that it’s simply a systems issue with the media: resources are funneled toward their prime purpose. It creates a set of filters that allow or disallow stories to be told. Again, disagree with their findings. But the idea that there isn’t a backroom group of people that make decisions based on political agendas is helpful when looking at governing systems in general.

Like any enterprise, business schools are governed by a system. We can split hairs about the exact nature of their system, but one thing is certain. For many business schools, rankings help define it.

Rankings create a set of criteria that business schools must pay attention to. They play an influential role in determining where a b-school’s scarce resources are funneled. I’ve played the rankings game as a marketing professional for a business school and I have no ax to grind with the process. I remain convinced that activities related to garnering a ranking aren’t altogether antithetical to an educational mission. Especially in a business school, where things like understanding customer needs, returning fair value, and demonstrating measurable results are taught as keystones for successful enterprise management.

But I’ve come to wonder about one very important ranking criteria, and if it helps define a system that is opposed to empowering success among students who wish to exit as entrepreneurs or free agents: Placement and salary data.

To one degree or another, all major b-school rankings factor exiting placement and salary data in their evaluations. For Forbes, it’s just about everything. For Business Week, it’s about 10% of the calculation. (Entrepreneur magazine is one obvious exception.)

So it reasonably follows that business schools place a strong emphasis on post-graduation placement of their students. Without a definable job, there’s no salary data. And the higher the average salary, the higher the ranking.

You could argue that a career services function is also a response to what most students want from their school in the first place. Which is true. But if serving students is the pure motivation behind these staffed services, you’d see equally resourced advice centers for going it on your own.

Which you don’t. Even Babson – the gold standard for entrepreneurship education – doesn’t seem to offer much beyond the typical career services. I could certainly be wrong, but research during my tenure as a marketing professional for a b-school didn’t turn up much differentiation.

I’d argue that up and down the decision chain, business schools allocate resources, design degrees, craft curriculum, and hire faculty and staff in service to helping their graduates get jobs. Measurable and definitive, high-paying J-O-B-S’s. And in my experience, rare is the person within the b-school halls forthcoming with advice to not be tempted by a steady paycheck. To start your own venture. To break out on your own and work as a free agent.

So I wonder to what degree a b-school’s system—in no small part defined by rankings—contributes to their inability to teach entrepreneurship. Is this important in the larger dialog? Is it as much, more, less a factor than Saras D. Sarasvathy‘s work on the inherent difficulties in delivering codified knowledge about something as contextual as entrepreneurship? More than the specific topics on which they focus? The inability of left-brain directed institutions to embrace the entrepreneur’s most critical strength: creativity?

I’ve shot a few emails out to some folks involved in this world to chime in—I hope we hear from them. What do you think?

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8 Responses to “Are b-school systems accommodating for entrepreneurship?”


Jody Shepherd March 24, 2010

I think the b-shool’s “system” is part of the problem, but also the non-textbook type of learning that would need to be offered should also be considered a culprit… There is no course on “the best way to fund your startup,” since there really is no “best” way and more of “whatever way you can”… I would have loved for the Daniels program at DU to have offered classes (or even extracurricular “talks”) on ways to win at negotiation, term sheet 101, and small company strategy planning. Instead our financing class was more about how large companies can re-leverge and go on road shows to raise more capital – not how to fight the SBA and other gov’t agencies for grant money while begging your family to give you 20 years worth of Xmas presents early in the form of a check…

The fact is, most of the things you need to know to successfully start and grow a startup are learned in the trenches and not easily taught in a classroom, which makes it tough for schools. Kenan-Flagler at Chapel Hill has a unique approach, they require students to spend at least one sememter interning for one of the local VC’s portfolio companies… That way they get that hands-on experience that will never be found inside a book….

Aaron Templer March 24, 2010

Thanks for the thoughts Jody. I have a hunch that you’d find the Forbes article I linked to interesting (with “topics on which they focus” in the second-to-the-last last paragraph).

Jody Shepherd March 24, 2010

Awesome article – key point to me was:

“Because entrepreneurship education is still relatively ‘new’ as a discipline, what schools offer is often reflective of the faculty involved in creating the programs.”

The earlier Forbes article was also interesting.. The grad school ratings focus on the amount of money earned and the % graduating with a job.. There is no good way to track it, but what if they instead evaluated them on the “Value their graduates create”; be that in jobs created from their efforts or successful (profitable) business ventures (startup or within a corporation) based on good decision making… The current system seems analgous to rating your investment advisor based on how low you get his fee to be and how quickly he gets your money deployed across investment – not on the return he generates…

Aaron Templer March 25, 2010

Jody – yes. They could use a more broad definition of value – value created for the professional, an industry, or even our world.

Love the personal advisory analogy.

Bill Silver March 27, 2010

Many are the articles or blog posts that offer a perspective on what is wrong with business schools. They have been blamed for the Great Recession and accused of promoting decision making that leads to malfeasance, greed, and ethical lapses in judgment. In this post they stand accused of not encouraging entrepreneurship.

I am sure there are examples of schools where this may be the case. But business schools programs are not homogenous, and there are some very exciting business school programs that are relevant, market responsive, and are graduating students who are turning innovative ideas into new business ventures.

At Sonoma State University, our students receive a hands on curriculum which can prepare them to be entrepreneurs (if that is their desire). In our Small Business Consulting Class students work with real businesses to help them solve problems and pursue new market opportunities. Many students participate in our internship program which gives them on the job experience in a professional environment. Through our Mentor program, students are paired with business leaders and learn the ins and outs of running a business. In our capstone business plan class, students integrate all they have learned and prepare a plan for a new business venture which is evaluated by a panel of angel investors.

Does this experience produce entrepreneurs? It can. Some of our recent graduates now reside in a business incubator where they are growing the very same businesses they developed as part of their business plan class. Some have gone on to further education. And many have chosen to find jobs. The choice is the student’s – we encourage and support many avenues for career and life success.

So I believe a business school can teach entrepreneurship effectively. As in any industry with many competitors, some do it better than others.

Aaron Templer March 28, 2010

Bill – thanks for pointing out the broad brush with which I was painting. Indeed – some schools do it better than others and none two are alike. The so-called top-tier schools that focus on rankings and traditional metrics of reputation (publishing, mainly) are, I think, the ones under the microscope in this and many of the posts and articles you allude to. It seems to me that it should come as no surprise that schools like yours with a focus on individual attention, teaching as a scholarly pursuit, and deep integration with their communities more successfully develop entrepreneurs.

Thanks also for your perspective on people like me “blaming” b-schools. That’s good fodder for another post, to be sure.

Bill Silver March 29, 2010

Collectively, as an industry, business education still has a long way to go. Your post and other articles identify some of the flaws in the system. I concur that the rankings don’t measure the most important results from a business school eduction. But could we establish a consensus on what those results should be? Quality of life index of alumni? Businesses launched by alumni? Impact of graduates on businesses and communities? Surely all of these are more important than average starting salary.

Aaron Templer March 30, 2010

Bill – seems to me we’ve had this conversation before. Glad it’s reared its head again.

Quality of Life would be an outstanding ranking taxonomy in my opinion. Isn’t that why most people work after all? And doesn’t measure outcome, which is what business schools teach?

So any idea what the Gaap equivalent of Quality of Life is?



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