A telling omission in the MBA curriculum

I am so weary of having to teach and reteach organisational leaders the basics of reputation management that I can almost feel my hair greying. But I understand the inherent helplessness even the most successful chief executives seem to have in successfully managing a company’s reputation. Despite being their companies’ chief reputation officers, they commonly have almost no education in this critical responsibility.

Most MBA programmes are deficient in this regard. Consider a typical MBA curriculum. How much content is devoted to strategic communications/reputation management – the strategies needed to communicate effectively, build trust and enhance reputation? The weakness of most MBA programmes in this area is exposed nearly every week as business executives and their organisations make egregious communications errors and are rightly pilloried in the media (see BP, Toyota, Goldman Sachs, Tiger Woods, etc).

Getting bad press is not the problem; all large entities experience some. What is at risk from this deficiency in graduate business education is company reputation, stock price, product sales and various executives’ jobs.

In this time of economic turbulence, trust in companies and their leaders is at an all-time low. Peter Peterson, co-founder of the Blackstone Group, once observed: “What matters is what the public thinks and the public trust is what has really crashed.”

Yet ethics and communications strategies, essential to trust, are often absent or relegated to elective status in MBA programmes.

MBA programmes and their graduates suffer from a blind spot in the science of leadership communications for several reasons. Business schools have focused on understanding the numbers rather than communicating their implications. The “soft skills” suffer from a lack of respect and inclusion in business education or fall between the silos that separate the higher education departments that could collaborate to expose students to ethics, social responsibility, public affairs communications strategy and interpersonal dynamics, but do not.

Hence, we have CEOs who have never deeply considered their responsibilities with regard to reputation and communications and do not understand them. Note how many duck important questions from the media, employees, community groups, shareholders and other constituencies, then wonder why they deal with suspicion and a lack of support.

CEOs are typically smart and experienced. But even communications-savvy CEOs are less astute about strategic communications than they are about finance, marketing, product development, operations or strategic planning.

Business schools should take more responsibility in providing this vital leadership component. Their failure to address the importance of strategic communication – communication that affects organisational behaviour and changes business outcomes – means their graduates may be well prepared in other core management skills but lack an essential competence.

Exposing business students to communications planning models and case studies – such as Toyota’s clumsy handling of news reports detailing faults with some of its vehicles – is critical and would provide the grounding needed before an unprepared executive uttered “no comment” at a pivotal moment.

If future leaders – today’s MBA students – learn what influences reputation and manage accordingly, value is realised.

Research by Paul Argenti, professor of corporate communications at Dartmouth’s Tuck School of Business, has shown that well-regarded companies command premium prices, pay lower prices, entice top recruits, have more stable revenues, face fewer risks of crisis, are given greater latitude by constituents and enjoy higher market valuation and reduced stock price volatility.

Current business students and CEOs who do not think something is amiss should ask Tony Hayward, former BP chief executive, if he wishes that he had been better prepared.

Anthony D’Angelo is co-chairman of the Public Relations Society of America’s MBA Initiative