And closer working relationships between education and large corporate businesses – and a stronger culture of entrepreneurship in education – will be key to help accelerate economic growth, a leading banker at Santander will say today.
Steve Pateman, Head of UK banking, will also say that only greater collaboration between education and big businesses will allow entrepreneurs to flourish.
Speaking at the National Association of College and University Entrepreneurs (NACUE) student enterprise conference at Sheffield Hallam University, the head of Santander’s UK operations will also tell delegates that small businesses often struggle to find top talent. This signals that job prospects for MBAs keen to enter start-ups remain prosperous.
But there needs to be wider-reaching and significant cultural change to ensure firms have access to the brightest graduates, and likewise make sure graduates have access to small business employers, he will say.
His concerns reflect criticism that MBA programs can be long on theory and sometimes short on practical experience. An initiative was recently launched to address these concerns and close the gap between business schools and frontline managers.
A new service from the Institute of Equality and Diversity Practitioners aims to bring together the best academic thinking from leading schools – including Stanford, MIT and Oxford Said – to find practical applications for MBAs to use the knowledge they have acquired. In other words: work experience.
The Association of Business Schools (ABS) also published a report that highlighted areas of b-school education that need improvement. Chief among the recommendations was to design more practice into courses.
Over the past six years, as the MBA jobs market in Europe has experienced changes, practical experience is even more important for MBAs, says Mark Davies, Employer Relations Manager at Imperial College Business School.
“Businesses have been less willing to take a chance on MBA recruits with potential, looking instead for those who have the practical skills and experience they are sure can deliver value from day one,” he told BusinessBecause.
Lu Han, an FTMBA student from Cass Business School, agrees. “Teaching theory alone is never enough... you can't learn to cycle with the manual. You need to get out there, fall a few times and reflect on what works. Theory might help you understand the bike, but it will not help you ride it,” she says.
Imperial, for example, hold the Imperial Innovation Challenge, an intensive week that brings together theory and practice for MBA students. The school also works closely with leading companies including Microsoft, Cisco and Shell – as well as high-tech start-ups in London.
Students should look out for this “added value” on MBA programs, says Dr Sionade Robinson, Associate Dean of MBA Programmes at Cass, part of City University London. “The application of classroom knowledge in group assignments and projects for companies helps embed learning in skills and capabilities,” she says.
It is not just the traditional functions of a business such as finance, operations management and marketing that MBAs need to apply to real projects, says Anthea Milnes, Head of Marketing, Graduate Programmes at Cranfield School of Management. “Employers need MBA students who can ‘hit the ground running’ – who know how to apply their knowledge and understanding,” she says.
“However, employers often value soft skills such as management, leadership and team working as highly as functional understanding, quantitative ability or analytical skills.”
Cranfield was one of the first UK business schools to respond to the demand for more practical business skills and has five leadership modules built into the MBA program. Students also participate in a year-long leadership development programme to equip them for careers post-graduation.
Schools in the US, too, are more conscious of the need for closer ties with businesses. Tuck Business School, for example, has stepped up its on-campus recruiting opportunities. Around 900 companies now recruit Tuck students directly, and the school sourced approximately 2000 unique job opportunities last year.
It is an opportunity for businesses to benefit as well as MBAs, says Professor Richard Thorpe from the University of Leeds Business School. “Businesses have a major opportunity to benefit from closer engagement with an easier-to-access and refocused business and management academic community,” he says in the ABS report.
Closer recruiting ties will also benefit the schools themselves, says Richard Rawlinson, Vice-President of Booz & Company. “Schools that engage with business and innovate in pedagogy will better compete for students,” he said.
It is not just the corporate ties that can benefit MBAs, however. Entrepreneurship is increasingly popular and a record amount of graduates shunned traditional job functions for it last year in the US. According to a report by QS Top MBA, 26.8 per cent of MBA candidates worldwide want to start their own companies.
Entrepreneurial MBAs at Cranfield benefit from start-up support, says Anthea. “We give them support to set up and grow their own organisations through activities such as business plan and venture capital competitions, modules on new venture creation and entrepreneurial finance, and our annual VentureDay event,” she said.
Most business schools, Imperial and Cass included, now have incubators that connect students with start-ups and investors. Cass, for example, has The Hangout, a working space for start-ups in the City of London which is free for all the university’s students and alumni who have graduated within two years. And in some cases, schools offer their MBAs funding.
Access to cutting-edge start-ups and established companies helps foster relationships with the business school, says Dr Sionade. “It's clearly central to our approach and being located in the City of London puts us at the hub of the most important city for global business in Europe. Our location has helped us create a network of corporate relationships that we provide Cass MBA students with,” she said.
While it is important to develop these connections with businesses, practical experience itself does not guarantee you a job after graduation.
Those with more practical experience are not necessarily better equipped than more theoretical MBA students, says Dr Anjali Bakhru, Director of the Full-Time MBA at Imperial.
“We recognise that more practical experience in itself is not intrinsically more beneficial. After all, we know that the best managers are not necessarily the ones with the most experience of managing,” she told BusinessBecause.
What is equally important, she says, is developing creative and problem-solving skills in ways relevant to businesses both now and in the future.