Soapbox

January 10, 2011 12:02 am

How much will you pay? The growing culture of consulting for money

Increasing numbers of professors are merely repeating their classes when visiting a company

“Excuse me, professor, but I need you to teach six sessions on a programme for chief executives.

“How much will I pay you? Well, I thought you could do it as part of your workload with the school. You won’t? You suggest I talk to your agent and pay you $24,000?

“I know you are a brand but our school is also a brand, you work at the school and you owe your renown to our brand.”

 
Beale cartoon

Conversations such as these occur regularly in many business schools. There are many professors, or “how muchers”, whose “consulting” is remarkably similar to their classroom teaching. Companies secure the services of these professors, who then organise their own programmes and, although the professors are paid handsomely, the companies still find themselves saving money.

Business schools typically subsidise their MBA programmes, research and sometimes even the programmes they offer in poorer countries with revenues generated in executive education. However, professors can shortcut their business schools by going to the market either directly or through agents.

Business schools encourage their professors to do consulting as part of their workload. Consulting can include helping to solve problems such as becoming more innovative or entering an overseas market. These experiences can enrich faculty research and make faculty more relevant in the classroom.

Peter Drucker, the “father of modern manage- ment”, compared good professors in a business school with good doctors in a medical school: they develop medical knowledge, bring it to the patient’s bed, structure it, deliver it in the classroom and ultimately publish it in good medical journals.

But, for a growing number of professors, consulting means merely repeating their classes when visiting a company. Some even advertise their availability when teaching in their business school (even giving information about their rates). Some have “consulting companies” that they use as vehicles for this
activity and some issue invoices from companies they have established in tax havens.

We also see cases of business schools hiring another type of “how mucher”. These are specialists in publishing articles in referee journals. These publishing how-muchers can be “purchased” on an article-by-article basis, as co-authors or as “wholesale ublishers” for the school (not teaching or doing any other academic activity, just adding value to the school in evaluations for “rankings”).

Undoubtedly, such practices exist. If they grow, is it possible that we at business schools, immersed in this culture of consulting or publishing for money at the expense of our schools, may be producing dishonest executives or MBAs?

Today in business schools we teach ethics, corporate social responsibility and social entrepreneurship more than ever before. But could it be that some people are teaching these topics on the basis of “how much will I earn?”

There seems to be an inconsistency. Values such as generosity and hard work are important. But business school rankings, including those of the Financial Times, do not measure most of these things. Schools should not allow such rankings to dictate their strategy alone and should make an effort to benchmark these intangibles. Perhaps schools should establish a set of regulations and make them public.

Companies may also want to ask themselves, when putting a management development project out to tender, whether they would find it acceptable for a consultant with one of these companies to do the job privately for a lower fee. If this raises ethical questions, then perhaps these companies should ask themselves why they allow professors from leading business schools to repeat their teaching in the company, bypassing his or her business school.

Is this corporate best practice? Companies and schools must do more work in this area. It is not enough for faculty and business schools to teach ethics and accountability, they must also be seen to behave with integrity.

Pedro Nueno is professor of entrepreneurship, Iese, and president of Ceibs

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