How Columbia's B-school is teaching MBAs to make decisions based on incomplete data
Shortly after R. Glenn Hubbard took over as dean of Columbia Business School in 2004, he began hearing rumblings from executives about the quality of MBA graduates. They were undoubtedly smart but often unprepared to handle the most crucial of managerial responsibilities: quickly solving problems with less than perfect information. Among those wanting more from new hires is Henry Kravis, co-founder of the private equity firm Kohlberg Kravis Roberts. "I want to see MBAs who can jump in and make decisions, not jump in and learn to make decisions," he says.
Hubbard made his own executive decision. He devised a new twist on the case study—the teaching format invented by Harvard Business School almost a century ago and used by most B-schools. Hubbard's so-called decision brief offers less information about a situation than the case study, and it doesn't present the solution until students have grappled with the issues on their own. "We want our students to be used to dealing with incomplete data," Hubbard says. "They should be able to make decisions out of uncertainty."
Even Michael J. Roberts, the executive director of the Arthur Rock Center for Entrepreneurship at Harvard and author of more than 100 HBS case studies, acknowledges the potential benefits of Hubbard's approach, which was introduced to Columbia students last fall. "Framing problems and finding the data to analyze those problems is a skill that MBAs need and that the classic case doesn't fully exploit," Roberts says. Hubbard expects such endorsements, as well as those of companies, will encourage other business schools to make room one day for Columbia's decision briefs in their curriculums. Hubbard, at least initially, doesn't plan to sell the decision briefs but to use them to tap into faculty research.
Hubbard isn't giving up on the traditional case study altogether. As part of an initiative called CaseWorks, Columbia will produce cases designed to reflect contemporary issues (which other schools do already), while also creating decision briefs that do away with the Harvard formula (which no one else has done). To help guide the program, Hubbard has turned to two people familiar with the deficits of the old methods: Stephen P. Zeldes, who has been at Columbia for more than a decade and is now chairman of the economics department at the B-school, and former Harvard case writer Elizabeth Gordon.
TOO MUCH INFORMATION
The stock case study presents a tidy narrative arc, with a protagonist and a clear story line. One of the more widely used HBS cases focuses on Intel's (INTC) former marketing vice-president, Pamela Pollace, as she decides whether Intel should extend the "Intel Inside" branding campaign to products other than computers. In 24 pages, students are provided with information on Intel and the history of microprocessors, as well as details about market share and segmentation. Pollace's major concern, they learn, is brand dilution; the potential reward is likely worth the risk. In effect, the students are guided along the decision-making process.
If this case were a Columbia decision brief, students might see a video interview in which Pollace describes the challenge. They would also be given a few documents on the background of the campaign itself—the same data a manager at the company would have, but no more. Then, students would discuss possible solutions. Afterward, the group would see a second video of Pollace explaining how she handled the issue before debating whether or not she made the right decision.
So far, Columbia has produced six briefs that take on of-the-moment business challenges: Among them is one that focuses on General Electric's (GE) business-process-outsourcing division in India. Given increased competition, the company needed to consider a bigger investment, as well as the possibility of serving non-GE customers. With just a little more information than that, students are asked to come up with various strategies. "The idea is to try to simulate what it will be like in a real workplace," says Gordon. "There is uncertainty, things aren't predigested, all the information won't be there."
The first field test for the new teaching technique will be this summer, when the MBAs head out to their internships. At Goldman Sachs (GS), which hires more Columbia interns than any other company, the co-head of campus recruiting, Janet Raiffa, hopes to encounter students who are more independent thinkers. As for Kravis, his firm doesn't employ summer interns.
Chief Executive magazine ("Fixing the Flawed MBA," July/August, 2007) says MBAs have a sense of entitlement and weak practical skills. Schools are responding. Stanford and Yale have overhauled their curriculums; others are sending students abroad for global experience. "In two or three years I think we'll see some very interesting changes," said Richard L. Schmalensee, dean emeritus of MIT's Sloan School of Management.