E-M8 Entrepreneurial Management for Eternal Mission

Intro

The satisfaction with the quality of training that is being provided by business schools has been dropping. (CITATION) It is commonly reported that graduates of business schools and university MBA programs lack the requisite preparation to lead the industry forward. (CITATION) Many organizations have turned to certifications, on the job leadership programs, in house training programs and other approaches to rectify the apparent shortfalls in the quality of business education. (CITATION)

Yet, I submit to you that there is nothing wrong with the business schools. Colleges today use more innovative teaching methods and are employing more rigorous curriculums than they did twenty years ago. The instructors today tend to have more training and experience than those twenty years ago. Schools are better equipped, better funded and are experiencing higher levels of competition. An average business graduate today has far more valuable skills than a graduate of twenty or forty or sixty years ago.

There is nothing wrong with the business schools. Yet, they are the educational vehicle of the industrial age (the age of mass production). Today, when the Western world is on the verge of fully embracing the information age (the age of mass customization), mass production approach, no matter how fine tuned simply cannot suffice.

There are plenty of places where mass production is just now becoming common place. Those places can stand to benefit tremendously from our business school model. Enrollments in to the MBA program in China are skyrocketing, for example. Yet, right here, at home we must innovate, if we are serious about advancing our civilization in to the next age. The management training of the assembly line simply will not do in a world of flexible systems. Just as the first half of the twentieth century served to transition our economy from informal apprenticeships to formal business schools, today a new form of training must emerge and be embraced by the industry and the government, in order for us to be able to actively contend for leadership in the business world of tomorrow. 

There is a tremendous value in the formal liberal arts college education. Colleges are here to stay. The new system has to strive to augment and suppliment the college system.

Change of the Ages

The world has gone through a number of transitions to get to where we are today. To understand why the change in the educational system is necessary we must first understand the shift from craftsmanship to mass production and mass customization. Only then can we talk about the changes that have to happen in the educational system in order to accommodate this transition.

Pre-Industrial Age

Until the middle of the nineteenth century the craftsmen accounted for most production. The quality varied with the craftsman and came at a substantial cost. Every product was one of a kind, since they were manufactured one at a time. It rarely made sense to assemble the product from parts, since the parts had to be fitted together to make them work.

In the age of craftsmanship, to learn a trade one simply found a master craftsman and asked to be their apprentice. Just as with the crafts they produced, the quality of training was highly varied and the investment of time tremendous. The availability of training opportunities was limited, the cost often being a life in a near slave conditions for the period of apprenticeship. The skills learned were often industry specific and did not transfer to other businesses well. Often, the individual had to figure out on their own all of the really key aspects of running a business.

Industrial Age

Industrial society, replaced the craftsmanship guilds with the assembly line production. In this way less educated labor could be used to produce highly consistent inexpensive products. The resulting system undermined the whole system of apprenticeships for most trades, since no amount of time spent working on the assembly line would make the person qualified to manage the entire organization.

However, the industrial factory had a greater need of management and supervisors. It also called for establishing many other specialized functions that required advanced training through its division of labor. The industry needed a supply of consistently trained people that could easily fit the roles within the organization. Business schools, colleges and Universities came to be the source that could satisfy this demand. Business schools, with their standardized testing were able to quickly mimic the mass production environments to mass produce sufficient numbers of business graduates and MBAs. By providing standardized classes, in a standardized program, the schools graduated students who were perfectly designed for the mass hiring process.

Schooling became more available and affordable. Training could now be completed in a set period of time by walking through a conveyer of classes where the instructors, specialists in the subject area, could focus on providing lots of information to a large number of people in a predetermined format. Since the schools trained managers for many different businesses, the education had to become more standardized and theoretical. This allowed the graduates to apply their newly developed skills in many areas. It also allowed students to move across industries, if necessary. The government mandate to include general education courses in the curriculum only increased the breadth of awareness of the business graduates.

After graduation the young managers could take their time to learn the specific tricks of the trade as they sought to work their way up the corporate ladder. Their primary responsibility was to manage exceptions and insure things are happening according to the plan that has been handed down from the management. Ability to strictly adhere to guidelines and follow the rules, which has been instilled throughout their college education, insured their success within the large and faceless corporation of their era. Traditional college education, coupled with working up through the corporate ladder, was sufficient in the industrial age, yet it is fundamentally insufficient in the age of information.

Information Age

The end of the twentieth century was a witness of the beginning of the transition to the age of flexible production. It is not enough to produce inexpensively and consistently, but the product has to actually meet the customer’s needs. The balance of power shifted to the buyer in the transition from push to pull environment. Time in the process is now regarded a shadow of waste and the batch size of one became the ultimate process improvement goal. We are still in the early stages of this revolution, which may well take us to the world where objects are produced instantly, upon customer desire, using some advanced nano-technology.

More and more, the managers are called upon to innovate and initiate. They are asked to step outside their fields of expertise and try something new. It is a proactive place, which requires an entrepreneurial mindset, which requires taking calculated risks. This environment values ability to learn quickly and function cross-functionally, rather than being a specialist in a narrow field. It encourages ability to think and listen. Competition does not allow for mediocre management at any level of organization. Often, the whole model of moving up the ladder is no longer applicable. The proliferation of smaller, more networked businesses causes us to operate on the basis of partnership, rather than hierarchy.

As a result of this shift, the business schools cannot produce the management of tomorrow. Mass production training is largely counter productive in a flexible mass customization environment, just as training of a craftsman became largely useless in the world of mass production. 

Mismatch

Vast majority of today’s business school graduates are unqualified to manage businesses. Even fewer are qualified to start them. The few that are, most likely had an opportunity to acquire these skills outside school. The world is changing at an ever increasing pace and modern educational vehicle is no longer able to keep up. Every day managers are told to do more with less, and frankly the conventional methods that are taught in the business school are vastly insufficient to do that consistently.

It’s not the people

Deming’s famous saying that 94% of problems are due to the process and only 6% is due to the people is just as true in business education. The vehicle of Universities and Business Schools has served us well through industrial society and provided the talent that has to take us to the next phase in the evolution of business education.

There are many excellent instructors, advisors and administrators who make a difference in the lives of millions of students. Yet, the system no longer works with them, but rather prevents them from helping their students succeed. The collegiate system is simply not flexible enough to withstand the world where quantity of available data doubles every two years.

Like any well established system, University system is working hard to preserve status quo. Much of the time and money is spent on developing more and more barriers of entry in the form of accreditations, approvals and registrations. The king is naked. Unfortunately, the millions of dollars spent on accreditation process and compliance have no correlation with the improvement in ability to innovate by the graduating managers.

 Just as with the advent of the factory and mass production apprenticeship had to give way to management schools, the business school has to give way to a form of business education that is a better fit for the world of information.

Business is not a liberal art

Learning for the sake of learning, the aspiration of the liberal art education, is simply unacceptable for the subject of business. The managerial success or failure of the students is of paramount importance. It can prosper or destroy our entire way of life. It can create and destroy many things we hold dear. Business is no longer an art, but a craft, with predictable rules and principles. A good manager is a master craftsman, who is creative, but who does not need to be artistic. Function and substance in business comes before form and outer beauty. Yet, generations of liberal arts business graduates are taught how things ought to be, with complete disregard to the way things are.

Jigsaw puzzle

The business schools teach each subject independently of the other subjects or greater context. We study accounting, without understanding the relationship to marketing, marketing without seeing how it affects operations, operations without regard to human elements of business and all the disciplines outside the greater context of the legal and practical realities. Humans learn by associating new material with existing knowledge. Yet, in a typical business class the information is presented without regard to other related disciplines. 

The college program typically tries to mix a little bit of this and a little bit of that, some accounting, some marketing, some finance. There is no consistency or continuity in the program. The training results in discombobulated, disconnected knowledge with vast majority of graduates not being able to tie the information together in any applicable way. The heads are randomly filled with disconnected concepts.

The Instructors

Hierarchical environment by default places the least qualified people closest to the process. Just as in the mass production factories, as the instructor is getting to be good, they end up in the management or as private consultant, no longer having any time or often even a permission to teach.

Full time professors, who typically have limited experience outside of academia, but nevertheless have the theoretical training, do some teaching. But mostly, professors are involved with administration of the program and research, thus relegating teaching to the Teaching Assistants. Teaching Assistants, who typically lack the work experience, theoretical training and teaching experience, nevertheless usually work hard at their task. That is until the time when their own exams and assignments start coming due. At that point, typically students are left to fend for themselves.

Many programs, particularly evening programs, recruit part time on call instructors. While these instructors may be able to bring valuable experience to the classroom, with a limited time to prepare, the pre-made curriculum and the books reign. The curriculum is commonly prepared by curriculum specialists, who are not likely to be the experts in any of the subjects for which they design curriculum, since their specialty is curriculum design. So, the well meaning, experienced instructors are left to work with resources that are often pushed on them by the school. Needless to say, that for these adjunct instructors, their day job comes first. Should any such instructor choose to work for the school full-time, in all likelihood the job would end up in a role of counselor, administrator, recruiter, or anything but instructor.

More fundamentally, vast majority of today’s instructors are products of the same schools. Most of the experience they bring comes from highly fractured mass production organizations. On occasion, the entrepreneurial managers, who have seen the big picture and have the ability to teach make it to the classroom and get immediately frustrated with the inability to really teach within the bounds of the classroom. Highly debilitated by the classroom setting, disconnected, randomly chosen classes, they struggle to add value to their audience.

Make belief projects

A business student reads many books and case studies. They likely wrote many long academic papers. If they were lucky enough to get instructors that did more than lecture, it is likely that they completed some projects that simulate some of the business situations. But they have never actually completed anything that was battle tested by the real world. The papers they wrote, no executive would waste time reading. The projects they completed were class specific, with the presentation often being the culmination of the project. But in the world of business, there are few problems that can be addressed by meeting once a week for a semester; the presentation, if it even happens, is often just the beginning. Thus, the students have the false illusion that they know what they are doing.

Irrelevant System of Performance Measurement

Not only do the colleges produce unqualified managers, but we make them feel good about the process by providing grades, which have no correlation to actual effectiveness of the graduates as business managers. Fortunately, some time after the graduation, when the students realize the lack of their education, there is always an opportunity to invite them back for a Masters program.

Colleges teach a tremendous amount of valuable data. But, like all mass producers they wash their hands of the student’s inability to do anything with all the various facts upon graduation.

Lack of Behavior Modeling

Business is fundamentally about relationships, yet we teach it in the environment that consciously strips the students of any possibility of their development. When the only meaningful student interactions happen in a frat house, the meaningful relationships and mutual trust built through accomplishing common goals together cannot take root. Interactions with instructors are even less common, with some schools actively discouraging the faculty from fraternizing with the students. Not that the instructors should go to the bar with their class, but a setting where students have an opportunity to observe healthy relationships is crucial for the healthy development of the entrepreneurial managers of tomorrow.

Knowledge not wisdom

Traditional university was created for the purpose of transferring abstract knowledge, with little regard to practical application. As such, modern university serves to teach concepts and facts. In the business world, knowledge and theoretical concepts are often of less consequence than common sense and wisdom. Learning common sense that was at the heart of the apprenticeship has unfortunately been lost in the mass production world of the business schools.

The result is that the graduates are not ready to manage anything, much less start something new. This may be acceptable in a mass production environment, where we are pigeon holed in to pockets of disconnected and therefore often irrelevant activities, but this is simply not acceptable in the world of mass customization.

A New Way to Train

Lean training system has to capture the best of both collegiate and apprenticeship systems. It should be effective in taking a person with limited experience and transitioning them to being highly successful as a graduate in the least amount of time possible. The success of this system would be largely determined by the success of the graduates in creating value in the business setting. Actual practical business results, not arbitrary grades, are the only real measure of the quality of training.

Just in time training has to touch on all aspects of business, shows the big picture and the details. It has to create a team with strong relational bonds and complete real world projects, which are judged by their actual performance in the industry, rather than arbitrary grades.

In a lean environment each student is given the tools for their individual and unique success. The students are not molded in to job roles, but rather their innate talents and abilities are discovered and fostered.

Flexible conveyer that, trains as part of the actual business process and delivers the knowledge at precisely the needed time, is the wave of the future. This training system focuses on behavior, relationships and understanding, not just knowledge. As a result, a team with a broad background and big picture understanding of all aspects of business can emerge.

 

Foreshadow

 

In many ways the Montessori teaching method has foreshadowed the shift from mass production to customization in children’s education. Just as Toyota can build a large variety of makes models and trims on the same assembly line, Montessori schools have been able to develop a cost effective method for fostering high quality children’s education in a setting of fostering, rather then squelching the individual.

Capturing the teaching moments, allowing students to pursue their own projects, but providing fostering and training as it is needed, are the hallmarks of Montessori. Yet, it takes more than applying Montessori model to adult business education to truly maximize the value to the students. It is required to uncover the individual goals and passions and synergies within the team, as well as steering the team toward the needs of the market to truly unleash the organizational potential. To be truly groundbreaking the new educational model should be self supporting and self reproducing. It has to provide the best tools in the right order. The order of study of various disciplines becomes even more crucial in this self paced, but directed environment.

E-M8 training system

E-M8 training program is our experiment with the truly mass customization training. While the basic structure, with clear checkpoints, is strictly defined, the students pick the business that they will start, develop and operate as they go through the program. The instructor, with a strong entrepreneurial and managerial background, walks each team through the individual steps necessary to research, plan, operate and improve the business. Training is delivered in small chunks before and during each individual step. It consists of working together with the students on their projects. The instructor has a financial interest in their business success, since the compensation is directly related to the success of the student’s ventures. So, rather then grading the students, the instructor is part of the overall business team, acting as ongoing business advisor. As a result the graduating students have an actual working business when they are done. Should they choose to go on to more advanced training, they soon find themselves building bigger businesses and eventually becoming business trainers, thus insuring a supply of well qualified instructors.

The only negative side effect of this program is that those who have experienced the freedom of working together in such liberating environments become pretty much useless to the world of mass production. After all, people who have discovered their talents can no longer easily fit in the confinement of predefined roles that companies of the last era have to offer.