Data will surge through business like the earlier tsunamis of personal computers, the internet and smartphones, predicts Alwin Magimay.
The partner and head of digital and analytics at KPMG says: “We are entering the fourth wave of digital value creation. I think data scientists are going to be to the present time what computer programmers were in the 1990s.”
If Magimay is right, then a generation of school-leavers and university graduates must think very hard about how they learn the skills for an era when digital platforms and data are at the heart of every economic and administrative activity. Many will ask just how relevant is the MBA, long seen as a passport to leadership, in an era of teenage coders and start-ups?
Madhav Rajan is senior associate dean for academic affairs at California’s Stanford Graduate School of Business, close to Palo Alto, the focal point of Silicon Valley — home to cutting-edge technology companies. Unsurprisingly, he believes an MBA from the university that educated Bill Hewlett and Dave Packard in the 1930s is an ideal preparation for a digital career.
“The US tech industry was created and stimulated by the university,” he says. “We have the best computer science and electrical engineering schools on the same campus as the business school and the students are able to take advantage of all the synergies.
“The other factor is that we have so many alumni who are in this area, who have been incredibly successful and who give back. Many of the courses . . . are taught by alumni, who act as mentors and advisers,” he says.
Stanford continually recasts its MBA programme content. This year’s electives include digital competition in platform markets; business intelligence from big data; data-driven decision-making; and a slew of courses focused on creativity and entrepreneurship.
As business reshapes, business schools are striving to stay ahead of the game. Prof Annabelle Gawer of London’s Imperial College Business School, says: “The MBA that used to be taught maybe 15-20 years ago in more traditional schools — a bit of strategy, a bit of finance, a bit of accounting — that was appropriate in a different time.
“Today, business is not just transactional,” she says. “It is about engagement. We need to design experiences, not just produce and sell things.” That requires a very different kind of business education.
In the digital economy, start-ups, professional firms and big companies alike need founders and decision makers with multi-layered skills. KPMG’s Alwin Magimay points to the importance of the Ds: a (specialist) discipline, data, design and digital delivery. The would-be entrepreneur or business leader needs a core area of expertise, a discipline that may well be acquired at undergraduate level. In addition, he or she needs design skills (the core discipline for some may be design), mastery of data and the ability to manage digital delivery, Magimay says.
Stanford’s Prof Rajan takes a similar view. “Going forward, having an MBA alone may not be what you want. Almost a quarter of our MBA participants now do a three-year joint degree. That spurs this kind of multidisciplinary mindset.”
Dörte Hirschberg is senior vice-president for venture development and organisation at Rocket Internet, a Berlin-based group building a stable of online businesses. When Rocket recruits people to head its start-ups, she says, “we expect an outstanding degree from a top university and work experience in high-performance environments such as consultancies”.
She adds that “deep technical competency with business knowledge is a rare combination that we value a lot. An MBA is one way to reach this”.
But an MBA is not the only way in. Rocket also hires specialists and runs training programmes. “We highly appreciate entrepreneurial spirit and candidates who have already started their own business.”
As data-gathering snowballs worldwide, understanding fully the story behind the numbers is vital in every field.
Imperial College is at the forefront of MBA teaching for a digital era and teaches data science as a discipline. Its KPMG Centre for Advanced Business Analytics is underpinned by £20m of funding from the advisory firm and its Data Observatory, featuring an enveloping circular wall of monitors, is intended to enable visualisation of data in ways to help encourage new insights.
Digital entrepreneurship can also be taught, it seems. Stanford says 65 of its 2015 MBA graduates, 16 per cent of the total set out to found a business. Stanford’s entrepreneurial alumni include Nick Hungerford, founder of Nutmeg, an online investment management service; Sam Yagan, founder of OKCupid and now chief executive of Match Group; and Pooja Sankar, creator of online learning platform Piazza.
Critics note that many of today’s most successful digital entrepreneurs, such as Facebook’s Mark Zuckerberg, are college dropouts. “But everybody isn’t a Steve Jobs or a Bill Gates,” says Prof Rajan. “I think for most of us it is important to understand the general management foundations, before you go into the digital economy.”
Tech skills now a core requirement
MBA programmes must prepare students to run digital businesses because today almost every business is digital, says Annabelle Gawer, associate professor in strategy and innovation at Imperial College Business School.
“The fusion of business and technology is at the heart of where the economy is going. I think our MBA participants understand that, corporations understand that and entrepreneurs and investors understand that.
“A large proportion of our students go on to work in start-ups. During their MBA they meet people with whom they will form their team — sometimes from the business school, but sometimes from other parts of the college which are developing the technologies,” says Prof Gawer.
Other MBA graduates go to big, established companies, often in finance and consulting but also in businesses ranging from engineering to the law. “Companies have realised they need people who are very good at technology, good at business and good at working together,” she says.