ostriches and birds
© James Ferguson

It was just two days into the short executive programme that the German directors announced they wanted to go home. The course, they said, designed to help senior engineers learn from successful young entrepreneurs, was not for them.

Yet by the end of the week these same executives wanted more. “They said they wanted to stay working in that way forever [as entrepreneurs],” says Jörg Rocholl, president of ESMT, the German business school running the course.

The anecdote, says Prof Rocholl, reveals that it is not just ambitious young business students who have a thirst for all things entrepreneurial. “At first it may look at odds but these companies are very interested in getting entrepreneurship expertise.”

Trending courses

With both students and corporate recruiters demanding curriculum changes to drive entrepreneurial thinking, every school worth its salt is increasing the number of courses on the syllabus. Chicago Booth has almost doubled the number of entrepreneurship courses in a decade, for example.

The combined forces of supply and demand are proving unstoppable in developing other changes in the curriculum too, in technology and innovation, cyber security, regulation, leadership, and especially big data and analytics — two topics that were hardly thought about just five years ago and are now some of the trendiest sessions around.

“Analytics and big data have to be a bigger part of the story,” says Geoffrey Garrett, dean of the Wharton School at the University of Pennsylvania. “Better leaders are people who make better decisions, and that means better-informed decisions.”

1Entrepreneurship is the number one elective at the Wharton School in 2015

Most business schools are first introducing new topics in their elective, or optional, courses and it is here that student and corporate demands are really being felt, according to Bernard Garrette, the associate dean in charge of the MBA at HEC Paris.

Responding to the market

“In the past 10 years there has been a shift to adapt to market conditions. The catalogue of electives used to be a choice of the courses that the faculty wanted to teach,” he says. “There is a shift much more into what the companies want and what the students want.”

It is a similar story in the US, says Sally Blount, dean of the Kellogg school at Northwestern University. “The headline is that we are seeing a lot of changes in the electives.” Kellogg has introduced 55 new electives in the past three years.

For her there have been two drivers of corporate change since 2000: smartphones and social networks; and globalisation and the growth in emerging economies. “There is a shift in where we can make money.”

Both trends have meant faster time to market, increased amounts of data and a reduced benefit of scale. “There are huge seismic shifts that we’re all still trying to understand,” she says, in particular in marketing. “I think that you can’t be alive right now and not notice. How many stars you get on Amazon is more important than brand equity.”

The trouble with finance courses

But as the elective courses change there are still lingering concerns that, even after the financial crisis of 2008, the core courses have not moved on, particularly those in finance.

55The number of new electives the Kellogg school has introduced in the past three years.

Claire Preisser is associate director at the Aspen Institute Business and Society Programme, which has long lobbied to see business schools take a more nuanced view of the role of the corporation. She believes there have been some shifts.

“We are increasingly seeing professors from the top schools asking: ‘What do I teach students in instances where there is a mismatch between corporate profit and social good,’” she says. But there is an addendum. “I don’t have a sense that finance has shifted that much.”

Franklin Allen, a former Wharton finance professor and now executive director of the Brevan Howard Centre at Imperial College London, is less generous. “Corporations don’t do a good job of taking society’s interests into account. It’s a really important issue,” he says. “I think shareholder value is very important but it shouldn’t be the only approach we teach and research in. It works well in a perfect world, but we don’t have that.”

Finance academics, unlike management professors that teach many different approaches, are more narrow minded in their attitude, he asserts. “I wrote a paper in finance on stakeholder approaches and it was very difficult to get it published. It took forever. ”

Yet Germany’s resilience in the financial crisis demonstrates that their system of co-determination works well, he says. “Finance academics are not interested in this. It’s just not there.”

He is not optimistic. “It’s not going to change any time soon.”

Shareholder value

At the Haas school at UC Berkeley, the topic of shareholder value versus stakeholder value is something “we don’t let go without some discussion”, insists Rich Lyons, its dean.

While at Wharton, Prof Garrett, a political economist by training, points to an expanding brief on the topic. “For me the bigger story is the mismatch between rising social need and stagnant government capacity.”

He cites India, where the biggest challenge is the lack of infrastructure, a challenge that needs public and private financiers to work together to meet the costs — governments alone cannot fund these projects. “Social impact investing is not an oxymoron today,” adds Prof Garrett. “It’s possible to be good by doing well.”

What to watch for

Looking to the future, deans are quick to point to new courses on the horizon. Kellogg has plans for additional electives in human and machine learning and in visual problem solving. “We think business schools have underestimated visual problem solving,” says Prof Blount. “I think we have got to do much more on the visualisation of data.”

At Haas, more emphasis is being put on aspects of behavioural economics.“What if we got superintentional about certain behaviours?” asks Prof Lyons.

One behaviour that Prof Lyons highlights is the sharing of information with colleagues. The natural inclination of most managers is to keep information secret, he says, but research confirms that companies that share information between colleagues outperform their rivals.

Recruiters could be told to look for these patterns of behaviour when they employ graduates, he adds. “When I talk to people in great firms, one of the [hallmarks] is teamwork. They share information, they don’t hide it.”

Top elective courses: The more things change, the more they stay the same

Despite business school protestations that the curriculum is changing, there is often little evidence of that in the popular electives at the top schools.

At Kellogg, business strategy and leadership in organisations topped the table of the most popular electives in 2005 — and in 2015. It is a similar tale at MIT Sloan, where finance theory was the most popular course in both 2005 and 2015 (the title has changed to managerial finance).

Meanwhile at London Business School, the most popular course this year was negotiation and bargaining. At Insead it was your first 100 days (about managing a company) and at HEC Paris, big data and business analytics. At the Tuck school at Dartmouth, The CEO Experience topped the table.

The two schools where there has been significant change are at Stanford and Wharton. A decade ago at Stanford, investment management was the elective of choice. Today, interpersonal dynamics and managing growing enterprises top the list.

At Wharton in 2005, the three most popular electives were in advanced corporate finance, business history and corporate valuation. This year they were in entrepreneurship, venture capital and private equity, and managing decision making.

Indeed entrepreneurship, the most popular elective this year at Wharton was only 17th on its list in 2005.

Other features in the “Reinventing business schools” series:

Academic rigour makes room for industry expertise

A variety of students is the spice of classroom life

Industry savvy teaching keeps courses in the game

Poor finances threaten business schools

Short tenures signal leadership void

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