May 9, 2011 12:11 am

Time for business schools to leave their comfort zone

One of my favourite episodes of Friends, the now-defunct US television sitcom about a group of twentysomething New Yorkers, is the one where Ross, the palaeontologist, rushes into the coffee shop where the friends congregate and announces that he has got tenure.

Clutching a bottle of vanilla-flavoured Israeli champagne (I suspect that is a hangover from a different story line), he says: “I got tenure … This is the single greatest day of my professional career. You know what the best part about this is? I can never be fired. I have job security for life. I never have to worry.”

Tenure is the Holy Grail of academia, making it arguably the only profession these days where you can be guaranteed a job for life – provided you are not caught with your hand in the till and don’t run off with a student.

The argument for retention of tenure is sound: it allows teachers to conduct research independent of commercial or political pressure. Yet because of the economic crisis affecting business schools over the past couple of years, it has rightly been called into question. How does it fit into the daily life of these institutions, many of which have had to slash support staff and reduce expenses to stay afloat?

And how does the research-based tenure system sit alongside the need for many top business schools to earn cash through offering short corporate programmes – the topic of this magazine? Peer-reviewed research is great, but in the short term it does not pay the bills. Yet although most professors are required to teach a number of degree classes and conduct a certain amount of research every year, the majority of institutions do not require them to teach short courses.

Of course, even if professors have a job for life, this does not guarantee their loyalty. Carol Stephenson, dean of the Richard Ivey School of Business in Canada and someone who joined the business school world after a successful corporate career, once told me about her puzzlement when she was advised about the different sets of academic loyalties. Professors’ first loyalty is to the faculty members with whom they conduct research, regardless of institution. Their second allegiance is to their students, their third to the other faculty at the institution, and at the bottom of the list is loyalty to the institution itself.

All of this means that at most business schools, professors can choose whether to teach these short courses. As a result, the number of tenured faculty who do so varies extraordinarily from institution to institution. Some schools boast that their executive education programmes are 100 per cent taught by their own faculty, while at other institutions it can be less than 10 per cent.

Of course, these numbers fluctuate depending on the economy. As a general rule, tenured faculty at top business schools are allowed one day a week to do their own highly paid consultancy work. An executive education director from a top US business school told me a few years ago that when such work dried up, faculty would scuttle back to business schools to take on additional paid teaching there.

But there is a much bigger question that needs to be addressed: if business schools are teaching companies how to organise and manage themselves, and how to be more innovative and competitive, should they not follow their own advice?

Those deans who believe all faculty should teach on executive programmes argue that it is the best way for academics to understand the needs of business, and so informs all research and teaching. Nonetheless, highly academic institutions are particularly condescending about outfits such as Duke Corporate Education, which sells its services on the grounds that it brings in the most appropriate faculty or staff member, from whatever institution, to respond to client need. But businesses love it – Duke has been ranked number one in the FT rankings for the past nine years.

As companies move out of recession and increasingly turn back to individual professors for research and consultancy, and to teach in their corporate universities, many business schools will once again face a huge dilemma: how to persuade faculty to teach their executive programmes.

Western companies are ever more demanding in what they need from business schools. In particular, the recession has taught them to move beyond their traditional markets to sell their goods and services. Business schools that want to work with these multinationals need to move outside their comfort zones too. If they do not, there are plenty of high-quality business schools in developing economies that will happily take their place.

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