Educating the B-School of Tomorrow

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Seven years ago, Sally Blount, dean of Northwestern University’s Kellogg School of Management, arrived in Evanston, Ill., and announced a seven-year plan to transform the school. The campaign focused on a goal no smaller than reinventing management education as we know it, including a $350 million fund-raising effort that would culminate with a state-of-the-art “global hub” facility. Every new dean likes to make such headline-grabbing promises. These actually happened.

In all, the school raised more than $330 million. It began offering dozens of new courses, and expanded its global partnerships and degree offerings. Several new senior leaders joined the team, and a new branding campaign was created.

All of which has been a result of savvy timing, because in recent years, few other forms of higher education have needed as much change as the MBA. To be sure, despite some recent softening in applications, the MBA is clearly among the most successful education products of the past 100 years, surpassing a degree in education as the most popular in terms of graduating students. But you only need to ponder all the gyrations in business—a new global economy, digitalization, the gig network—to understand the challenges the MBA has faced to keep up. And then there’s higher education itself: Would anyone have guessed the true impact of online options a decade or two ago?

“The MBA is a tremendous success story. It is also the focus of tremendous change,” says John A. Byrne, founder and editor-in-chief of Poets & Quants, an influential website that covers graduate business schools.

Indeed, just take a look at the changes at the so-called Magnificent Seven business schools, which includes Kellogg as well as Harvard, Wharton, Stanford, Booth, Columbia and MIT Sloan. In addition to a continued commitment to academic research, many of these schools now focus on the more modern skills needed for innovation, entrepreneurship and team leadership, all with a more international flavor. High-level executives can step out of the corner office and spend a year updating their trade. And the top B-schools are big into building, erecting gleaming complexes that mirror the high-tech, high-paced environment students will face in the job market.

But of the M7, only one has Dean Blount. For starters, she’s the first woman to become top dean at any of them, a milestone that can get lost when comparing her accomplishments, which include serving as undergrad dean at NYU’s Stern School of Business, where she helped open an Abu Dhabi campus and secure the school’s first $15 million gift. Not surprisingly, you’ll find her name tied to places like the Aspen Institute (advisory board), the World Economic Forum of Latin America (regional summit co-chair) and a huge conglomerate (Abbott Laboratories board member).

Byrne describes her as a master strategist with a long-term vision, a deep intellectual and world-class fund-raiser who understands the value of barnstorming at alumni events. All these traits, he believes, were critical toward steering Kellogg into making the kind of changes most tradition-bound institutions take decades to do. “When you consider the constraints of academic institutions, her work is even more remarkable,” he says.

Yet with all this hyper-success comes nagging concerns that, at least in the B-school world, will never be enough. In our chat with Dean Blount, we intended to focus on the future of MBA programs, but couldn’t resist asking for her insights into the corporate world, the global economy and how academia can shape them both. It was quite an education.

Let’s talk about the difference between being in business—in your case, the administrative side of running B-schools—versus studying business.

Dean Sally Blount: What’s really clear when you work with professors is that it’s quite frankly an IQ business. How smart are you? What kind of taste do you have for good questions and how to answer them? But in administration, you learn that leading an organization isn’t about IQ, it’s about things like social intelligence, emotional intelligence and what I call “organizational intelligence.”

What do you mean?

Blount: Social intelligence is how you manage relationships, especially one-on-one and in small groups—how you coach people and bring people along. Organizational intelligence is the ability to see flows among human systems—to understand that when you move this piece it’s going to have an effect down there. When you’re leading at 50,000 feet, which is what I do as a dean, you’ve got to understand when you move one piece other pieces move, and be able to predict how that’s going to happen.

B-schools are in a state of flux. What kinds of changes are happening?

Blount: We’re seeing a transformation of many industries in the 21st century. And education has not been immune. With the whole development of online content, we are seeing a democratization of knowledge that probably hasn’t been true since the printing press.

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There is an opportunity now for people in the farthest reaches of the world to get access to course content from the world’s greatest universities for free. That’s amazing. Even if you live out in Mongolia and you’re far from any college or university, you can actually see some of the best minds teaching and have access to that. That’s profound, that’s powerful, and it’s exciting for the future of humankind.

So we’re in an era of online versus face-to-face education and some serious price competition.

Blount: Face-to-face face education is expensive because it’s not highly scalable. You’re putting 60 people in a classroom to deliver a course fresh each time. But people are going to be less willing to pay for low-quality face-to-face education if they can get high quality online, and in the long run that means a complete restructuring of the higher education market, where over time we’re probably going to see a reduction in the number of face-to-face organizations that deliver education and a separating of great online content. There’s going to be a group of more elite schools that continue to provide the face-to-face environments, like the degree programs that we do here at Kellogg.

But in your mind, can technology here enhance the classroom brand of teaching?

Blount: Yes, we’re better able to tailor learning to different kinds of minds. It used to be if you were not good at listening to a talking head in a classroom—if that wasn’t how you took in learning—it was harder for you to excel at school. But now, if you’re more visual, there’s PowerPoint to help you track a verbal argument. Or, if you are better able to listen while you do something else (you have a different kind of attention span), you can listen to the content over and over again. At some schools, people frequently go back and forth between going to class and relistening to content online.

How do you balance the need to be current—keeping up on all the disruptions in the business world—with the need to teach core principles?

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Blount: Well, let’s be clear, the foundational truths that social scientists have been uncovering for the last century haven’t changed. The foundations of microeconomics haven’t changed. So where we do our innovation in education is in the electives, after you finish the core courses.

Tell us your theories on the “wormhole decade.”

Blount: The first decade of the 21st century was one of profound change, and everybody was acting like it was just normal. Change is normal, but this was fundamentally disruptive change. In the course of 10 years, for example, the so-called BRIC countries, which hadn’t even been named at the beginning of that wormhole decade, were accounting for maybe 5 percent to 6 percent of world GDP, and by the end of the decade they were nearly 20 percent.

Big change.

Blount: This is a world where we don’t know the new rules yet. Who would’ve guessed that the start-up app called Uber would disrupt the taxi industry around the world? It happened in such a very short period of time. In fact, Uber was founded during that wormhole decade, in 2010. It’s industry after industry after industry. So what we have to think about and what we’re talking to our students about is this profound decade has led to a decade of disequilibrium, which is what we’re in.

Can you talk about what that all means for leadership?

Blount: We have to remember human organizations can only change so fast. We talk about all the speed and rapidity, but the reality is, large human organizations move relatively slowly. One of the things we have to remind people is that there is time. And the thing that we need from leaders is a calmness, a confidence that there will be time to solve the problems and address the challenges, as long as you’re forward-facing and clear.

What else should leaders of the future know?

Blount: You have to have a clarity of purpose, which always begins with the customer. Why is your organization here? Every organization, no matter the sector—government, not for profit, business—has a customer. They exist to meet somebody’s needs.