Charles Handy, the management thinker, argues that in management we have forgotten what a business is for. Look around and you will see a business community untrusted, under scrutiny and seemingly without vision. But let’s be honest, business leaders are simply applying what they learnt in management school 15 years ago. People such as the writers and academics Henry Mintzberg and Rakesh Khurana have been arguing for years that we have a problem in business schools and that the problem is not only a matter of curriculum; the whole system is a vicious cycle. Success is determined by revenues; the media ranks MBA programmes on their capacity to increase earnings and business schools design programmes to provide students with the tools to maximise returns. The result is that top-ranked business schools are those capable of placing the most graduates in high-paying jobs, particularly investment banking.
Ask any chief executive and they will tell you that most companies are not currently managed based on their most important competitiveness factors. Companies list their top factors as employee talent, long-term vision, corporate culture, stakeholder management and quality or capacity to innovate, yet they tend to manage the company based on factors such as productivity, sales, growth, cost savings, stock price or market share. Perhaps the reason is that most top factors are difficult to measure, and therefore to manage. Ironically, their intangible nature also makes them very difficult to teach. The result is a System where businesses manage themselves admittedly not based on their most strategic assets, and where management schools train students to continue using the same system. Read the rest of this entry »