Innovative leader takes aim on the creation of knowledge

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It is fashionable these days for business school professors to beat their breasts and question the value of the MBA.

Are business schools relevant to the companies they serve, they ask; are academics more concerned with statistical research than how to manage a business?

There are only a few professors, and even fewer deans, who have ideas about how management education should change.

Certainly one of the most thoughtful is Yash Gupta, who was appointed dean of the Marshall school at University of Southern California in July last year.

Prof Gupta, previously dean at the University of Washington, and before that dean at the University of Colorado at Denver, believes business schools took a wrong turn back in the 1960s when they decided to become research institutions and aligned themselves with the methodologies of the departments of arts and sciences.

Instead, he believes, they should have aligned themselves with medical school practice. Now is the time to change.

“All medical schools have hospitals, so [doctors and students] can easily make the transition between the hospital and the university,” he says. “We need to do the same thing with business schools. At USC we want to create a hospital for the school: knowledge companies should be our hospital.”

As more production work and lower-skilled jobs move offshore to low-wage economies, Prof Gupta argues that knowledge creation will be the basis on which developed nations compete and that this has huge implications for business schools. “The piece which is the jewel is the creation of knowledge – successful companies will go on creating knowledge. For business schools to compete, they will need to help these companies create knowledge.”

Part visionary, part successful marketeer, Prof Gupta is persuasive in his argument that creating stronger links between the business school and the business community is something Marshall can do particularly well because of its Los Angeles location. “Future business schools are all about innovation and you must have some context in which to create it,” he says.

While London has a strong financial context, Los Angeles has a “mosaic of cultures” and obvious strengths in the entertainment industries – film, television, data. However, it is a sector that has faced increasing competition in the past few years. “When Hollywood created movies they had virtually a monopoly on the leisure time of people round the world. We now compete for their leisure time.” Being based in California brings further local advantages, he believes.

One hundred miles to the south is San Diego, a centre for the biosciences; 400 miles to the north is San Francisco and Silicon Valley, the centre of the high-tech and software industries.

The entry barriers to the first are very high, with huge up-front costs. The entry barriers for the software industry, by comparison, are very low. “There is a different kind of risk in the north and the south,” he says.

He has a further card up his sleeve, though, and one much closer to home. The alumni of the university are some of the most loyal around and very supportive of the school. “The network is so close. I’ve never seen anything like this,” he says.

This is reflected in the donations received by the university, which is by no means short of cash. In its last fund-raising campaign USC raised $2.9bn, with the business school raising $160m of that.

The Marshall school is now initiating its next campaign with a plan to raise a further $400m.

With such strong views on management education it is not surprising that Prof Gupta is already spearheading changes in the Marshall school’s MBA curriculum. And it will be a complete change, he says. “We have no interest in patching it [the old curriculum] up.”

The curriculum will be introduced in the autumn and will follow much of the new dean’s philosophy. In particular the school will create more formal and informal links with business organisations. “It will be a true partnership between our learning environment and their [the corporations’] knowledge creation environment.”

Prof Gupta characterises the learning on the new Marshall MBA curriculum as a “very large-scale simulator”; that is, groups of MBAs will have to work through crises and management scenarios. “When you’re learning to fly a plane, nobody gives you a plane, you go to a flight simulator. As a manager, how do you deal with rare events – this is what simulation teaches you.”

New team structures, already commonplace in medical schools, will be introduced. For example, in most business schools teams are set up by groups within each cohort. At Marshall teams will comprise students from both years of the MBA to form both horizontal and vertical teams.

Changes in subjects taught will bring topics such as intellectual property back on to the agenda. “Business schools have not taught R&D and intellectual property for a long time. But how can we encourage companies to understand their intellectual property? How do we create a valuation of a company before products are available?”

To encourage faculty to introduce ideas on an ongoing basis, and to promote a culture of continuing innovation, the school budget will be allocated not just on course demand. Funds will be given to those who propose ventures or initiatives, says the dean.

By appointing Prof Gupta the Marshall school chose a dean with truly global experience. He earned his bachelor degree in engineering from the Punjab University in India and a masters degree in production management from Brunel University in the UK. His PhD in management science also came from the UK, the University of Bradford.

As a professor he has worked in Canada as well as business schools across the US – Kentucky, Colorado, Washington and now California. What they will now be hoping is that this helps the three-time dean give Marshall the impetus it needs to become a truly global school.

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