10 Years After The Global Financial Crisis: The Purpose Of Business Schools in 2018

Many of the world’s most esteemed deans, MBA program directors, and business leaders will gather in Stockholm, Sweden this May 14-16 for the Association of MBAs Global Conference 2018. On the agenda? A diverse range of topics spanning everything from how to attract more students to innovation and digital delivery -- all within the context of the post-global financial world.

One word that appears again and again -- both for business schools and in the business world at large? Purpose. Here’s a closer look at this exciting new era in the business school landscape, and why purpose matters so much.

Social Responsibility Takes Center Stage

Today’s b-school students have a very different collective outlook than those of a decade ago. While they may once have been driven largely by money and status, another factor is increasingly important to the next generation of business leaders: Social responsibility.

According to the Financial Times, a mere third of b-school students who completed year-long MBA programs at the height of the financial crisis in 2008 said that the topic of the financial sector’s social responsibilities was integrated into their curricula. Just two years later, a full two-thirds of b-school students said the topic was formally addressed in their programs. Not only that, but nearly half said their schools had placed “significant” emphasis on social responsibility compared to just 25 percent in 2008.

The takeaway, according to Michael Grote, a professor of corporate finance in Germany, “Today we are handling [business ethics] in a much more structured way.”

According to Ruth Bender, a reader in corporate financial strategy at a UK b-school, the shift is student-driven fallout from the financial meltdown. “You have a more questioning student body these days. Students today are much more skeptical about the role of [the financial sector],” Bender told FT.

In fact, a staggering 83 percent of the class of 2010 said that the financial industry should take steps toward transparency, including making small and medium business loans more accessible and enhancing community engagement.

This sentiment has only continued to grow. Earlier this year, UK b-school executive dean Peter Moizer penned a FT editorial in which he maintained, “Business schools have a role to play in helping companies meet the challenges of social responsibility and ethics in ensuring that their well-intentioned commitments are not disappointingly unfulfilled.”

At the heart of the matter, according to Moizer? Emphasizing personal accountability while also exposing students to ethical issues viewed through the lens of philosophy. “This has been very successful: philosophers offer a different perspective on ethical dilemmas and deepens the students’ knowledge of ethical reasoning,” he continued.

Preparing Students for the Next Financial Crisis

The 2008 financial crisis was made immeasurably worse by the fact that so many people -- from economists to the big banks themselves -- were blindsided by it. Unfortunately, history tends to repeat itself, and some say it may be sooner than we think -- so much so that a session January’s World Economic Forum Annual Meeting in Davos was dedicated to the question, “Could 2018 be the year of the next financial crisis?”  While none of the panelists could say without a doubt that another crisis is imminent, nor could they conclusively rule it out due to complexities across everything from lingering debt from the last crisis to a crippling cyberattack.

And while we may not be able to predict when the next financial crisis is coming or to prevent it from happening, today’s b-schools are taking steps to ensure that students are prepared for what might come. A major part of the process? Risk management training focused not on quick financial success but instead on corporate sustainability and long-term organizational financial health.

What Does All Of This Mean for Recruitment?

Today’s aspiring business leaders have made clear that the promise of high salaries and prestige is no longer enough. So what are they looking for?

This brings us back to purpose. An American business school dean told FT, “Banks still hire people but they have to up their game. If you are going to attract the current generation of students you have to give them something that has meaning and purpose, not just the opportunity to make a lot of money.” This applies to business schools as well as to businesses themselves.

Specifically, students are looking for interesting work that challenges them and has meaning. They’re also placing greater importance on quality of life issues, including everything from more vacation time to the opportunity to work overseas.

Furthermore, factoring in the entrepreneurial and interdisciplinary mindset of the current generation of young people, MBA programs that support a variety of careers in a breadth and depth of industries -- particularly STEM fields, given rapid technological advancements and the opportunities they facilitate -- also have the inside edge.

And then there’s the shift in focus from theory to practice. Contends Elie Chachoua for the World Economic Forum, “Schools will have to move from a one-size-fits-all education model based on theory to one that is individualized and based on experience….The challenge, of course, is to ensure that the skill-set each student develops is at an adequate level of mastery.”

Perhaps Johan Roos, a professor of strategy and managing director and dean of a b-school in Sweden, put it best in proposing, “When circumstances change, doing the same thing is a bad strategy.”  B-schools which keep this in mind will best positioned to take the lessons learned from the past and to apply them most successfully to the future -- both in terms of recruiting students and preparing them to lead.