Fear, Loathing, and the MBA

In the wake of the bear market and financial crisis of 2008, we've experienced a bull market in tougher situation. But where has all the research and analysis gotten us? Not far. The markets are on the path to recovery, but we've done little to address the underlying causes of the crisis, one of which is what and how we teach in our business schools.

Most of the people point to business schools as a part of the problem. MBA is by far the leading degree in American postgraduate education, where it represents more than a quarter of all students. The standard criticism lobbed at MBAs is that they're arrogant, brash, and brimming with unearned confidence in their own abilities. That criticism misses the point. The real reason that our MBAs contributed to this financial crisis, and the crises that preceded it, has less to do with arrogance than with fear.

MBAs are taught frameworks and models that are meant to give them ways of thinking about the world. The problem is that we don't teach those models in ways that encourage students to actually think critically about the world. Too much of business education is about edutainment, takeaways, absolute answers, and universal tools. We show students how to value a company, how to price an option, how to manage away risk through securitization. But we are largely silent on the limits of those models, the patterns of assumptions that underlie them, and, most important, what to do when those models stop working.

Model Dependence

The result is that we produce graduates who are capable of dutifully applying the models they were taught, but who are unlikely to question them and largely incapable of adapting them and building new ones. As such, MBAs cling desperately to their models out of fear. If the models they have don't work, there is nothing to replace them and no way out of the problem. That is why I don't believe that arrogance drives MBAs to hold steadfast to their models as they fail; it is paralyzing terror.

MBA graduates hew close to their old models even as they lead deeper into crisis because they can't see what else they can do. That is the predominant shortfall of MBA education; too many outputs with too little process, too much about results with too little about causes, and too many conclusions with too little reasoning. It is no wonder our graduates don't leap confidently and decisively to build new models when the old ones start to fail.

To build new models, MBA students need to be taught to deeply examine the models we present to them—not just to the end of regurgitating them on an exam, but with the aim of understanding how, why, and when the models work. Students need to actually play with the models, testing, challenging, breaking, and rebuilding them. They need to imagine and explore, as a designer might, what could be true, as much as what is true. They need to learn to seek out and listen to the naysayers, to seek to understand what those in opposition to conventional wisdom see about the world that the rest of us do not.

Integrative Thinking

Our MBA students need to be integrative thinkers. Integrative thinking, on one level, is simply the ability to use the tension of opposing models as the root of a new and better choice. Integrative thinkers, rather than choosing between marginal or less-than-appealing options, will seek to create a new model that contains elements of the existing models but that is better than each of them. On another level, integrative thinking is a specific application of a broader and more impactful way of being in the world: a way of being that says my job is not to choose but to create. This mode of thinking encourages wide exploration and deep reflection, creativity, and analysis. It is a mode of thinking that dismantles the fear response when our models start to go off the rails. The failure of a model isn't a cause for panic; rather, it is a marvelous opportunity to understand the limitations of that model and to build a new and better one.

Only when we commit to an MBA based on integrative thinking will we produce graduates who innovate new and better models rather than get trapped and limited by models that we teach; who will contribute to resolving crises rather than contributing to their creation in the first place.

Read more...

MBA Job Outlook Improving

Recruiters are skittish and the job market is more competitive than ever, but career services directors say 2010 may be the year of the turnaround

This year's class of MBAs arrived on campus in September expecting a challenging fall recruiting season and now many are bracing themselves for an even tougher spring ahead. 

With uncertainty about the economic recovery looming, students trying to secure full-time offers are entering a job climate that looks eerily similar to last year's brutal MBA job market, career services officers say. Compounding the problem, fewer second-year students came back this fall with full-time job offers from their internships, they say, making an already tight job market even more competitive.

This fall, recruiters continued to shy away from campus and many are being cautious about hiring, according to a recent survey of 78 business schools by the MBA Career Services Council (MBA CSC), the umbrella group for business school career placement officers. Recruiting remains down, with 79% of schools reporting a decline in on-campus recruiting for full-time MBA jobs in the fall of 2009, the same number as the previous year. To assist students, career services officers are using many of the same tactics they used last year to dig up jobs. They're cold-calling recruiters, adding executives in residence to counsel MBAs, and tapping into alumni networks. Meanwhile, they're preparing students to seize on what they believe could be a last-minute flood of job opportunities that they expect will emerge closer to graduation. 

Encouraging Signs

At the same time, there are a number of signs that the MBA job market could improve, albeit slightly, in the coming months and a growing sense of optimism prevails among career services officers, says Kip Harrell, president of the MBA CSC. According to his group's survey, full-time MBA job postings appear to be rebounding; 34% of schools reported an increase in full-time postings this fall. And, perhaps even more important, fewer schools are reporting declines, with 48% of schools seeing a reduction in full-time postings, as compared with 70% of schools last year.

The still-shaky job market is a bitter pill for many MBA students, who came to B-school 18 months ago in the hope that the recession would be long gone by graduation and are now finding that it isn't. The surge in B-school applications at the start of the downturn was one of the biggest on record, as many fled the uncertainty of the job market for what they viewed as a surefire career boost and six-figure salary. Today, that all seems like a cruel joke, but on campus a fragile optimism prevails. "We are seeing signs that the economy is turning around, so the mood at business schools now is that everyone is waiting with lots of hope," says Harrell.

Another bright spot is that internship opportunities for first-year students may be bouncing back. In the survey by the MBA CSC, 31% of career services officers say they expect internship recruiting activity to be down, while 33% expect it to be up and 36% expect it to be flat. Last year at this time, 62% of career services officers said they expected internship activity to be down.

Read more...

Biometric data to be used as a part of GMAT exam

For the first time in its history, the French National Commission for Data Protection and the Liberties (CNIL) has granted approval to a private testing company -- the Graduate Management Admission Council (GMAC) -- to collect biometric data as part of its efforts to ensure the highest level of security for the GMAT exam. No other private examination has obtained this permission.

GMAC is the international organization of business schools that owns and administers the GMAT exam, used by almost 2,000 business schools worldwide as part of the admission process. In consideration of the guarantees taken by GMAT to protect privacy, the CNIL authorized GMAC's use of the new PalmSecure biometric device to authenticate the identity of individuals taking the GMAT. In the near future, data collected from this device will be used to match candidate information across a central database that includes biometric data from individuals sitting for the exam at other test centres around the world.

The GMAT exam is currently the only examination that utilizes the new PalmSecure palm vein identification technology. PalmSecure features a near-infrared light that captures a palm vein pattern, generating a unique encrypted biometric template that is matched against the pre-registered candidate's palm vein pattern, thus ensuring the test taker is that candidate. It offers a highly reliable form of authentication because it utilizes no trace technology, no image is ever stored, and the data cannot be read by other devices. The CNIL noted in its approval, "It is not likely to be captured without the knowledge of the person concerned and therefore presents very little risk for the civil liberties and fundamental rights of the individuals."

"We want to express our appreciation to the CNIL for reinforcing, in its decision, our commitment to leadership in protecting personal data and complying with international data privacy laws," said David A. Wilson, president and CEO of GMAC. "We want to ensure the highest level of security to protect the interests of schools and of honest test takers."

Wilson noted that leading business schools around the world have relied upon the GMAT as a proven predictor of a candidate's academic success for five decades. "The CNIL's action in granting approval for the collection of biometric data only to the GMAT exam reflects the importance of the high priority we place on vigilant security."

In 2005, GMAC notified the CNIL of other security measures under the Data Protection Act to protect the GMAT exam against fraud, including audio-visual recording in the test room and photos of candidates. However, France and some other countries did not accept the collection of fingerprints, which was also a part of GMAT exam security measures. GMAC then began a search for alternatives to fingerprinting that would comply with international data privacy laws. The CNIL received a letter of support for the value of the palm vein technology in guaranteeing the security of the test from the HEC School of Management in Paris.

GMAC will now implement PalmSecure and file requests for its use with other European countries. Portugal has already authorized it. GMAC expects to use the PalmSecure technology in all test centers by the close of 2009.

About Graduate Management Admission Council

The Graduate Management Admission Council (www.gmac.com) is a nonprofit education organization of leading graduate business schools worldwide dedicated to creating access to and disseminating information about graduate management education. GMAC is based in McLean, Virginia, with a European office in London. The Council owns the Graduate Management Admission Test (GMAT), used by approximately 4,600 graduate management programs at some 1,900 business schools around the world to assess applicants. The GMAT -- the only standardized test designed expressly for graduate business and management programs worldwide -- is now available at more than 450 test centers in 110 countries.

For more information about the GMAT, please visit www.mba.com.

Read more...

How heavy is the Internet

Using publicly available information, for the first time in the world,the weight of the internet has been calcuated precisely and scientifically. Obviously this information is only really useful to someone attempting to work out the cost of posting the Internet somewhere, perhaps to North Korea. Still, the casual reader -- hi there! -- may still enjoy learning just how damn heavy the thing is.

Around 570,937,778 computers are believed to be connected to the Internet, according to the Internet Systems Consortium. That's an awful lot of heavy hardware jacked into the idiot pipes. In fact, at an average of around 40kg per machine, including your monitor, it all adds up to a staggering mound of electronics. Obviously some of these machines are laptops. Many desktop machines will have printers or scanners plugged into them though, offsetting the difference.

Servers are the place where all your 'Internet' is stored. Picture them as electronic lending libraries, only your book is never on loan, or smeared in sick. Instead, servers serve up the pages you ask for when you type those addresses into your browser window. As you can see, there's a fair number of them. Netcraft estimates there are 175,480,931 servers worldwide.

This is one of the few definitive figures available on the weight of cabling that makes up the Internet. It's the approximate weight of the 15,000km TAT-14 cable that links the US to France, the Netherlands, Germany, Denmark and the UK. The cable weighs 5.8kg per metre.

Quite a lot of iPhones have been sold, 42 million in total, and all of them connect to the Internet. Collectively they weigh an absolutely mindblowing 6 million kilograms.

BlackBerry: the iPhone for people who like to 'do business'. The 'business people' have spent a huge amount on BlackBerrys. RIM has sold over 50 million of the critters since the gadget was first introduced. The weight soon adds up!

These viruses don't actually weigh anything, but they're a huge part of the Internet you know and love. There are over 287,524 viruses available on the Internet for free installation on your Windows PC.

Web sites are also an important part of the Internet experience, but they don't really weigh very much either. Most of them are electrical impulses, magnetic stripes on hard disks, or electrons floating about the place, giddy with excitement. The Internet Archive stores over 85 billion pages, and that's just the tip of the iceberg.

There you have it, ladies and gentlemen. The Internet is very heavy indeed. To give you some idea of just how heavy the internet is, imagine an absolutely enormous tower of computers and servers and cables reaching up into the sky like the evil fingers of some apocalyptic demon. Now imagine sparks, thunder, electrical storms. And, on top of it all, an otter screaming pointlessly. That is the closest you are likely to come to visualising the Internet.

Read more...

MBAs Consider startups

Business Schools have quietly become the back door to starting your own business. Once considered merely the hallway to a high-salaried career with an investment banking or consulting firm, business schools are now drawing attention from those tinkering in their garages and hoping to find the next big thing. Through virtual and traditional business incubators, business schools are helping students launch startups with everything from fund-raising and networking to finding office space and interns.

During the economic crisis, many people took shelter in graduate programs, while many others who had been pursuing careers at companies large and small sought opportunities to become their own boss so they won't have to worry about the next round of layoffs. These ingredients have come together in a recipe that has graduate business programs cooking up entrepreneurial ideas like never before—from RecipeKey, a reverse search engine that has visitors to its Web site typing in ingredients to get recipes, to WallStreetOasis.com, an online community for finance professionals.

Read more...