David Wilson, President and Chief Executive Officer of GMAC, presented a lecture at the EFMD 2013 Annual Conference titled “Fasten Your Seatbelts.” Higher education is facing an uncertain environment with differing approaches in pedagogy and turbulent markets. Wilson discussed the state of higher education now versus what it was like five years ago, and he gave his vision for higher education in the future.
Wilson outlined his 18 years working at the Graduate Management Admission Council (GMAC), and described his term as ‘coming to the top of the roller coaster and about to go down in a quick ride.’ Clearly, his duration as the leader of GMAC has had its trials and successes, and is presently on the brink of a big change in higher education.
Amongst the pool of candidates taking the GMAT, there are two major pipelines for the programs these candidates aim for: MBA programs and Masters programs. In the former, there were a record number of GMAT-takers in 2012- 540,000 scores, and this was primarily due to the growth in Asia. However, besides this, there was also an increased growth in non-MBA Masters programs- 240,000 scores in 2012. In Europe, in particular, there is an ongoing demand for these types of programs. MBA programs in the US are also becoming less popular in place of the increasingly preferred non-MBA Masters programs, showing a growth of 61% already.
MBA programs, generally taking two years to complete, are beginning to be viewed as a burden time-wise. Traditionally, American schools would give their MBA students long summer breaks to give them time to go home and do farm work for the family. This has now become irrelevant.
Due to the falling demand for MBA programs since 2008, universities are becoming more responsive by creating new (specialized) non-Masters programs, which is starting to have a huge market in Asia, an increase of 55% from 2008. The characteristics of this new Masters pool of candidates include more women, younger aged candidates, and more undergraduate business degrees, in contrast to the MBA applicants, which still have more diverse undergraduate degrees.
Additionally, while perception senses the falling popularity of MBA programs nowadays, the hiring numbers show otherwise. GMAC figures demonstrate that employers are still hiring MBAs, despite the lower ROI.
For 2014, the vision ahead depends on the state of the economy. Newspaper headlines indicate an economy that will not be favorable for new graduates from the higher education industry, where the “employed are the underemployed.” He paints a picture of this by mentioning the aeronautical engineer who pours him his coffee every morning.
Certainly, the higher education industry will be facing challenges next year, and higher education institutions will have to adapt their education models, to address the fragile job market, the rising growth of massive open online courses (MOOCs), and the recruitment of talent, both domestically and from overseas.
For many years, the US has excelled in exporting its education model and bringing global talent to the country; however, this is now becoming the opposite, with the UK also following this (negative) trend. Additionally, it has become impossible to distinguish the good students from the pool of university graduates. The challenge is figuring out a standard way to measure a “good” mark, spanning numerous institutions. In 2008, 43% of students were given A grades; yet, how to adequately measure what this actually implies?
Adding to the difficulty in measuring the quality of grades across institutions, the higher education industry also has to address the emerging student population that is going online. UNC Kenan-Flager Business School is starting to respond to this digital trend by offering an online MBA. Although viewed as negative by fellow institutions that consider traditional brick and mortar institutions to be king, UNC is at least adapting to respond to candidates who are digital natives. However, it will be difficult in the next few years to generate a profit on online programs, aka MOOCs, and many institutions will indeed struggle with this. Without a margin, there is no mission.
MOOCs are a controversial topic. While many faculty and institutions are fascinated with the possibilities of offering online programs to students, hence opening up its international body of students without the administrative hassle of visa and country entry requirements, there are still a lot of unanswered questions. Will MOOCs create any knowledge? There is a difference between sending out course notes by email, versus an in-class discussion about a good case study, allowing students to engage with each other and problem solve through face-to-face interaction. Digital interactions are not the same. What do you do when you have 150,000 students in seven countries and 24 different time zones? How do you give out one standardized exam?
The statistics also show that only 7% of people taking MOOCs actually complete them. This brings the question as to why that is, and how to identify the students who cannot complete these online courses. Another issue for MOOCs is the one of authenticity. This is the one Achilles heel in this online education model, and certainly will pose a challenge for higher education institutions in their course planning.
The reality is that CVs in the future will no longer be degrees, but a group of courses that one specializes in, targeted towards specific career aspirations. Therefore, while MOOCs has its issues, we cannot fight this trend, and we need to embrace it. MOOCs can provide the ideal platform to enhance recruitment, offer groups of specialized courses, and many other advantages.
With regards to all challenges facing the higher education industry, it is key to remember that focus is the first victim of success. Business schools have been successful in adapting to the trends of the industry thus far, so this momentum has to be kept up in facing the challenges in the future.
David A. Wilson talks about diversity in the MBA classroom
Dr. David A. Wilson has been the Chief Executive Officer and President at Graduate Management Admission Council Inc. since 1995. From 1978 to 1994, Dr. Wilson served as the Managing Partner and National Director for Professional Development of Ernst & Young LLP. He served as an Audit Principal of Ernst & Young LLP since 1981 and Audit Partner from 1981 to 1983. He has been a Director of Barnes & Noble Inc., since September 2010 and CoreSite Realty Corporation since September
BOOK REVIEW: “Promises Fulfilled and Unfulfilled in Management Education” by Howard Thomas, Lynne Thomas and Alexander Wilson (2013)
Commissioned by EFMD and Emerald, this book is an analysis of thirty-nine interviews of key stakeholders in management education. It sets out some of the major issues and talking points, taking the reader through the history of management education to ongoing challenges. Many of these issues are not new, such as the role and value of research, the relevance of teaching done in the classroom, and links to the corporate world. Criticisms of business schools have been ongoing over the past ten years, most notably from within the industry. In 2005, Chris Grey of Warwick Business School argued that they have become just finishing schools for elites to prepare them for well-paid positions in finance and consulting.
Peter Lorange has had one of the most illustrious careers in academia. Having begun his career teaching at MIT Sloan School of Management and Wharton, he then went on to become President of BI, Oslo and then IMD, Lausanne. He retired from this last position in 2009 but instead of dedicating his time to golf he bought the GSBA, Zurich and renamed it the Lorange Institute of Business. You might conclude that he has quite a bit to say on leadership and you would be right. This is an excellent book.