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Business schools are no longer fit for purpose.
They were found wanting in the 2008 global meltdown — look at articles on “business schools to blame for financial crash”. But this is nothing compared with the crisis now brewing in business, and the complete lack of understanding or leadership from business schools to manage it.
There has been much media coverage in the past year on artificial intelligence and the fate of humankind. Intelligent automation is already in the workplace, yet few leaders have the skills to understand or manage it strategically.
I am concerned and so carried out my own research with business leaders: March of the Robots . . . Into the Boardroom, which examines the issues and corporate responsibilities of technology, from executives to human resources to professional advisers. It struck me that business schools are partly to blame for this complete lack of technology management skills at the most senior levels.
According to my research 58 per cent of UK bosses admit their boards are not good at understanding or managing technology; 47 per cent have not looked at the impact of automation on jobs and only 19 per cent think automation will hit managerial jobs and just three per cent leadership positions — yet already an algorithm sits on a board in Hong Kong with an equal vote.
Business schools have taught core modules on strategy, finance, marketing, people and economics for the past 50 years. There may be optional extras such as leadership, mergers and acquisitions or not-for-profit, but IT has barely had a look-in on a typical MBA programme and technology certainly does not feature as a core.
A new discipline is needed, call it “Future Technology”, looking at new robust strategy processes and the impact of technology on every area of business.
Why is this needed? In my research I interviewed 30 board directors, including a very senior partner at a global professional company. When I asked if and what the company was automating, he explained the company’s wholesale automation of tasks — typically those done by juniors. I asked how this was affecting graduate recruitment and there was silence. They had not connected automation through to the thousand or so graduates taken on every year.
Put like this it sounds blindingly obvious. But it sums up the problem. Few executives are interested in technology or IT. They delegate its management to project teams and do not look at it as a business issue, thinking through the knock-on effects. They do not probe or know the questions to ask in comparison with, say, a black hole in the finances.
Look at the story of Jeremy Clarkson, the ex-Top Gear presenter who will front Amazon Prime’s motoring show with Richard Hammond and James May. According to news reports his contract had a typical non-compete clause — he could not work for another UK media company for a year after leaving the BBC. Presumably lawyers and HR professionals failed to imagine competition would come from an online bookseller, Amazon, prepared to pay the presenters £160m.
Lawyers and leaders need to understand technology and disruptive businesses — think Uber, Airbnb, 3D printers and more. My concern is few do and they will see wholesale loss of jobs, profitability and global names in the next three to five years, bigger than anything we have seen from the internet.
Business schools need to shake up everything they do. Analysing trends of the past 50 years is no longer useful. Course content is outdated. Academics themselves need new mindsets to look at technology impact in every discipline, and also business-wide.
Business leaders need help. As business schools face increased global competition themselves, this could be their opportunity for new relevance and markets. It will be interesting to see which schools can walk the talk and not just adapt to new challenges, but take the lead in this challenging area.
The writer has built, run and chaired technology companies and mentors FTSE chief executives and directors