The authors of this piece have worked in the industry for more than 25 years each and are currently teaching at IMT Ghaziabad. This combination of actual industry experience and academics places us at the centre of a common debate – Does the MBA program create professionals who meet industry requirements? Elon Musk recently queered the pitch when he said “As much as possible, avoid hiring MBAs. MBA programs don’t teach people how to create companies.” On the other hand, the Harvard Business School Mission states ‘We educate leaders who make a difference in the world.’

An iconoclastic leader. An iconic educational institution. Is there a point of convergence?

Peter Drucker equated corporate success with being an Effective Executive. In his view, some of the best CEOs were essentially effective because they asked what needs to be done and what is right for the enterprise, they developed action plans, took responsibility for decisions and for communicating, were focused on opportunities rather than problems, ran productive meetings, and thought and said ‘We’ rather than ‘I’. These traits have assumed greater importance in today’s Volatile, Uncertain, Complex, and Ambiguous (VUCA) world. 

Against this background, we return to the original soul-searching questions – What should the MBA program deliver to the industry? What are the skills and capabilities that freshly minted MBAs should learn and bring to the party? Our MBA programs structured to create Drucker’s Effective Executive and equip them with the capacity to function in the new, VUCA world? When we assess the present MBA program, how do we fare on these dimensions and what should change, if at all?

Companies that regularly hire MBAs from B-Schools view this process as an important first step in building a long-term leadership pipeline. Getting the right talent into the firm at the entry-level therefore assumes critical importance. What companies look for in their MBA recruits is strong technical skills with the right personality traits and attitude needed to manage in unpredictable times.

Running a business requires hundreds of activities functioning in sync, akin to a world-class orchestra. Sales forecasting, brand promotional planning, customer relationship management, procurement of raw and packaging materials, handling receivables, to take just a few examples, must mesh together in a never-ending cycle that brings goods and services to customers when and where they want them, and at prices and costs that create customer value and satisfaction while turning a neat profit for the firm. 24/7.

So how do MBA programs fare on these criteria?

In most B-Schools, the year one core courses, and the more specialized elective courses, build a strong technical foundation. Good companies add hands-on exposure in the early years on the job, which creates capable front-line managers with the potential for bigger things in future. The best MBA programs blend conceptual knowledge of theories and frameworks with the challenges and pressure of application in real business situations, achieved through case studies, internships, project work and assignments. This forces the student to think through issues with a structured approach that is robust yet flexible enough to account for reality.

While the above is the core of the recipe, the secret sauce is actually the high pressure of tight project deadlines, frequent evaluations, case-study competitions, multiple assignments and submissions and interacting with and competing against highly talented peers. These unquantifiable experiences are what develop the skills that hold the candidates in good stead throughout their careers - adaptability, ability to handle pressure, emotional maturity, building long-lasting relationships, empathy, and most importantly, the learning ability that will enable them to survive, and hopefully thrive, in an ever-changing world. 

When done right, this results in high-quality MBA graduates who fit the Drucker definition of an Effective Executive. This brings us to a point of divergence between industry and academia. Corporates often question the job readiness of new MBAs, citing a lack of understanding of the realities of the business world. ‘Too theoretical’ is a common refrain. This is a serious charge and needs fresh thinking.

Many B-Schools struggle to balance the course composition between pure academics and corporate reality. The industry requirement of Job Ready MBAs creates pressure at both extremes. 

In our experience, premium B-Schools, like IMT Ghaziabad (where we teach), are cognizant of this dilemma. In an effort to keep getting this formula right, for example, IMT Ghaziabad has created partnerships with multiple companies that bring their executives on campus to co-teach specific courses and topics. Students get to see first-hand how the theory works in practice and what managers do to adapt the frameworks in the heat and dust of the trenches.  Expert sessions with industry-leading lights, often drawn from the Alumni Network, provide a multi-category perspective. Faculty also work on a diverse range of consulting projects and facilitate MDPs, grappling with the skill development and training needs of corporate executives.

We also foresee some other adaptations to the standard MBA. While the average age for US MBAs is 28 years with 3 to 6 years of work experience, in India the average age is 25 years with correspondingly less work experience. Is there merit, for example, in creating a slightly different program for freshers who would benefit from greater corporate exposure delivered through longer / more frequent internships? Needless to say, a more active role for industry executives in partnering with B-Schools will only improve the real-world grounding of the graduates.

In conclusion, we revisit our questions raised earlier. The MBA program must deliver Job Ready candidates who understand the principles of Business Management both in theory and in practice. As educators, we have the responsibility to create functionally sound executives whom the industry can quickly deploy in mainstream roles. We may not be currently turning out the perfect, Drucker defined, Effective Executive, and that is an area of improvement. But certainly, a fresh MBA has the skills and knowledge that companies can mould to create the next generation of their leaders.

We respectfully beg to differ with Musk.