Archive for the 'Leadership' Category

Learning Leadership in the Face of Rising Tuition

A recent comment on Orange County MBA brought to light the challenges prospective MBA students face trying to apply and enroll at CSUF.  Matias shared a recent experience from the Mihaylo MBA Prospective Student Information Session, and had learned there that CSUF won’t be accepting new MBA applicants for Spring 2013 due to California’s budget constraints.  The sad part is that this is only the tip of the iceberg.  The outlook for prospective MBAs won’t be improving anytime soon.

Increasing tuition is nothing new, but in recent years certain state university systems have imposed greater tuition increases than others.  California is one of the worst examples.  The average tuition increase for in-state students around the country was 8% last year.  Compare that to California’s increase of over 20% for that same period.  And public tuition has been increasing at a faster rate than private tuition.  Granted, the average private university tuition still exceeds the average public university tuition ($24,000 vs. $8,000 per year on average), still arguably making the public degree an excellent value.  But that may not last for long; California public tuition nearly doubled over the last 5 years!  At that rate, it won’t be long before public and private educations are similar in price!

CSUF faces its own budget challenges.  Tuition could increase again next year, and it all depends on whether Governor Brown’s November tax initiative is approved.  If the tax initiative is not approved, students will face an additional 10% tuition increase for Spring 2013.  The increase will help cover a budget shortfall estimated to be between $250 to $375 million.  The shortfall may force the university to slash salaries and benefits, reduce enrollments, and eliminate jobs.  Since 2007-08, California budget deficits have cost the CSU system approximately $1 billion in budget funding.

Here’s the major problem, and it was highlighted in Matias’ comment.  CSUF announced at the Information Session that it would not be accepting applications for Spring 2013.  Now folks either have trouble getting into CSUF, or once accepted they face the risk of paying ever-increasing tuition.  The CSU system administrators aren’t showing they feel their students’ pain, which only worsens the situation.  Just recently, the Board of Trustees approved pay raises for 3 university presidents.  The initiative raised salaries by as much as 10%, and were approved on top of the car and home allowances the administrators are already receiving.  CSU administrators say the raises come from funding sources separate from the universities’ operating budgets.  And that’s where the problem lies – these actions (whether warranted or not) send mixed messages to students.

How are students and prospective applicants going to believe CSU administrators when they say they “feel their pain” and “have their best interests at heart?”  The pay raises and tuition increases don’t seem to be affecting those administrators.  Now it may be true that the money for the raises came from sources outside the CSU system operating budget, meaning it couldn’t be spent on services or tuition reduction anyways.  But that’s beside the point – it’s sending a mixed message.  Students see their tuition increasing and the universities’ services diminish.  They need someone to blame, and who better to blame than the mixed-message administrators receiving pay raises while cutting enrollment and increasing student fees?

Despite this heated situation, this mixed-message issue can serve as a lesson for MBA students.  Leaders need to lead, and leading often requires sacrifice.  Students are sacrificing their finances; prospective students are sacrificing their education plans.  Administrators need to demonstrate that same level of sacrifice.  Some of the firms that survived the recent economic downturn had executives who cut their own pay and curtailed their perks in order to save employees’ jobs.  I’m not saying leadership is easy, and I’m not saying I have all the answers for this education challenge.  But times are difficult, and leaders need to demonstrate they are fighting for their employees (or students) while keeping those peoples’ best interests at heart.  The solutions to the CSU system’s budget woes won’t appear overnight.  So maybe the politicians and administrators should toss these challenges to the MBA students at these universities.  Maybe the students can offer some solutions the administrators hadn’t even considered, while learning lessons about the challenges of leadership in the process.

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A Brave, New MBA World

Every year, employers receive surveys from various organizations asking questions about the companies’ MBA employees they have and those they will be recruiting.  And I am always fascinated to read what skills employers feel their MBA new hires are lacking.  In 2011, the University of North Carolina partnered with the Graduate Management Admission Council (GMAC) and conducted one of these surveys.  One section of the survey listed skills employers had identified as most valuable in MBA’s, but the firms were reporting the lowest satisfaction with these same skills in their MBA’s.  Those skills included:

  • Ability to adapt/change to new situations
  • Creative problem-solving skills
  • Oral communication skills
  • Written communication skills
  • Ability to think strategically
  • Ability to make decisions with imperfect information
  • Interpersonal skills
  • Leadership skills

Business schools have a difficult challenge finding ways to teach these skills to their MBA students.  But Harvard Business School is attempting to implement a new graduate business curriculum that could do exactly that.

Harvard Business School recently undertook a bold revamp of its MBA curriculum.  Instead of focusing the majority of its course-work on case studies, the school has developed a program titled FIELD (Field Immersion Experiences for Leadership Development) for first year MBA students which exposes them to the trials and tribulations of creating a start-up.  First-years formed approximately 150 teams that were provided impressive resources to launch their start-ups: $5,000 in seed money and help from lawyers (for drafting legal documents) and professional programmers (for app and software development).  Students created their company and pitched their idea to fellow classmates.  Then, those classmates were provided with $100,000 in “monopoly money” to buy and sell shares in the start-ups using a software program developed for the course.  The idea behind this being that the market (in this case, the students) will determine whether a team’s business has the chops to succeed based on how well it is trader by the market.  After the initial trading occurs, teams then revamped their pitches or repositioned their start-ups before presenting one last time to their classmates.

Some of the ideas were hits, and could potentially spin-off into brand new businesses.  Others start-ups that weren’t so successful were relegated to the “failed business track” and their teams analyzed why their ideas didn’t completely pan out.  Everything in the program is a learning experience, according to Professor Alan MacCormack: “The going-to-market track is about selling and going to customers and proving your idea.  And the other is understanding that failure is a very natural outcome of entrepreneurship.”

So how does this course relate to the employer survey mentioned earlier?  This bold revamp of Harvard’s curriculum dramatically addresses the skills employers feel MBA graduates lack when they enter the workforce.  The students must leverage their creative problem-solving abilities and work together as a team to create a business from scratch.  They have little time to waste, and must act using limited information and their experiences each brings to their team.  Interpersonal skills and leadership become extremely important if the students wish to develop an effective team that can implement the group’s vision and business strategy.  Oral and written presentation skills are honed in the pitches to the student “investors.”  And the teams must adjust on the fly to the reactions of the market to ensure their start-up remains viable and competitive.

I personally find this new approach to the MBA curriculum extremely exciting!  I love the idea of taking the information learned in the classroom (P&L statements, marketing strategies, production scheduling, etc.) and augmenting it with the communication and soft skills needed to sell an idea to an investor.  This program gives students the opportunity to fully utilize the skills and knowledge they’ve been taught in their MBA program in order to better experience what the business world is really like.  Now, I realize this program cannot be implemented by every last MBA program – the cost alone is a huge roadblock for most schools.  But the skills these students learn and develop in a program like this will go a long way towards helping them grow into effective MBA graduates.  Creative MBA program modifications like Harvard’s start-up course should dramatically help bring MBA programs graduate students who are skilled and experienced in 21st century business strategies.

What do you think of Harvard’s new start-up course?  Do you think it will help mold MBA graduates into employees that firms will want to hire?  Share your thoughts in the comments section below or tweet me at @orangecountymba.

MBA Events, Mental Traps, and a Little Manliness

When I originally drafted this blog post, I intended to write about one of my major complaints with the CSUF MBA program.  After researching my complaint a bit though, my vision for this post changed.  I want to share the insights that led to my change of heart.

I receive emails almost daily from CSUF reminding me of upcoming MBA events and activities.  I opened an email Wednesday morning titled “Attend the 2-Hour Job Search Workshop!”  Intrigued, I read the email about the upcoming event but was disappointed to see it was scheduled for a Friday at 2:30pm.  Considering I work during the week, I realized I couldn’t possibly make it to the event and deleted the email from my inbox.

Frustrated that I couldn’t attend the event, my mind started stewing over the following thought: “CSUF always seems to schedule events during my work hours.”  And the more I stewed over the though, the more frustrated I became.  I enrolled in the MBA program with every intention of getting the most I could from my experience.  To me that meant attending workshops, learning from my professors and peers, making new contacts, and developing new skills.  My mind began stewing over the following question: “How was I supposed to do that when every event was scheduled during my work hours?”

So I decided my post this week would target CSUF’s poor scheduling.  I started going through my emails and write down the times for all the past couple months’ MBA events.  I was convinced that I remembered most of those events were scheduled during my work hours.  I couldn’t help but wonder, “What kind of a business school, with lots of part-time students who work 40+ hours per week, would schedule events during work hours?  How do they expect students to be able to attend?”

My brilliant plan backfired though the instant I began reviewing the events – of the 12 I reviewed from March and April, only 5 were scheduled during work hours.  I was stunned.  I could have attended 7 of those events!  Why had I thought so many of them had been scheduled during work hours?  I came to realize I had fallen victim to a common mental bias called the “availability heuristic.”

What is the availability heuristic? I guess the best definition comes from a post I read 2 days ago from one of my favorite blogs, The Art of Manliness:

“…we tend to believe that the easier it is to pull something from our memory (the more available it is to us), the larger the category and the more frequently the thing happens.”

The above quote is describing the availability heuristic.  In plainer terms, we tend to fall into the trap of believing that things at the “forefront of our minds” occur more often than they actually do.  And I fell right into this mental trap.  I assumed that because the last few events I received emails about were doing work hours, all of them must have been scheduled during work hours.  I was obviously proven wrong by my brief email experiment.

So now the obvious question is, how does my email experiment and the availability heuristic fit into this MBA blog post?  I think awareness of the availability heuristic is extremely important for managers.  The mental trap is easy to fall into (as illustrated by my poor line of reasoning), and managers have a responsibility to be as fair and unbiased as they can towards the people they manage.  For example, it may be tempting to think that because an employee recently made some mistakes on a report that he or she frequently makes those mistakes.  But as was illustrated by my experiment, those assumptions can often lead to incorrect conclusions.

It is important therefore, that managers avoid making these potentially costly assumptions.  I believe one way to do so is for managers to keep track the accomplishments of the employees they lead.  A written record or tracking sheet summarizing employees’ accomplishments (and mistakes) will provide the manager with (ideally) objective information about their employees’ activities.  Managers cannot let traps like the availability heuristic cloud their decision-making.  I know I would be mortified if I allowed such a simple mental trap trick me into not granting an employee a raise, for example.  This, and similar mental tricks, are extremely important for managers to be aware of, and they need to work diligently to avoid falling into these traps.

How would you recommend managers deal with the availability heuristic?  Leave your suggestions in the comment section below.

As for my interesting reading this week, I highly recommend the Art of Manliness blog.  This blog has provided me with endless informative and entertaining posts since I started reading it last year.  And it’s definitely not just for guys either.  The blog is written and maintained by the husband and wife team of Brett and Kate McKay, and I sincerely believe anyone can a post or 2 to their liking on the site.  I think you’ll find yourself going back to the blog over and over again for new posts and manly information.