I have heard from a lot of people in the past month. Many of them ask me about the job market for our MBAs, our endowment, our executive education business and about our alumni whose jobs are at risk. But there are some who ask what are you doing about this? What is your role now and in the future as a business school?
I don't presume or pretend to have all the answers, but I do have some thoughts. Firstly, I believe a lot of today’s troubles have been driven not just by greed, but by a lack of confidence. I think the average employee, maybe a business school graduate, lacks the confidence to ask the tough questions. We saw it in Enron when fast-talking finance chief Andrew Fastow got his way and no one challenged him. We saw it at WorldCom as well. That past era of trouble is all too recent I might add. Now we have seen it with structured products that most people didn't understand.
Where, I ask, were the bright, well-educated and especially confident young employees who should have been challenging the logic of this stuff? They were not confident enough, I say. It is uncomfortable to ask for an explanation of an acronym like CDO. What does it mean? What is its real value? Is it sustainable? These are tough questions because they expose the questioner to the smirk of the all-knowing creator of the product. Someone like Fastow maybe.
The other problem I see is one of self-perpetuation of leaders. When we look at the credit crisis, many of the firms now in trouble were led by people who had been in place for many years. They had built great teams perhaps, but were they too cosy to challenge each other -- or challenge the person at the top?
I said I don't have all of the answers. The one thing I do know is that as business schools, we need to teach the basics, but we also need to convince our students to be sceptical and to challenge conventional thinking. MBAs need to have the confidence to ask the tough questions and not be satisfied with the answers until they get the facts.
We also need to instill a confidence that makes people eager to do new things and not just hang on to a job because it pays well. The confidence to reinvent oneself periodically creates opportunities for innovation and entrepreneurship, and ensures that teams don't become too entrenched.
There are lessons as well here for boards of directors. How many boards accepted valuations and management assurances without really asking the tough questions and understanding the answers? How many boards allowed leaders to remain in place without much of a succession plan?
Well, when the dust settles, and I hope it does, there will be lots of blame to go around. I am sure I will continue to get some of the same tough questions. As for me, I intend to focus on the future and make sure our students learn from the past. There is too much to ignore.
Frank Brown’s book ‘The Global Business Leader’ is published by Palgrave Macmillan.