Will Smart Machines Disrupt MBA Education?

Edward D. Hess and Carlos Santos

It is no secret that technology has transformed the creation and operating of businesses and that coming technological advances in the areas of smart robots and artificial intelligence (“smart machines”), the “Internet of Things,” big data and 3D additive manufacturing could accelerate that transformation.

Darden Professor Ed Hess believes that “we are on the cusp of a Smart Machine Age that could transform how most businesses are staffed, operated and managed.” Hess believes that most businesses of the future will be staffed by some combination of people and smart machines, with people doing those things that technology cannot do well.

Leading researchers at MIT, the University of Oxford and IBM concur that in the near future, humans will only be needed to do jobs that require higher order critical, creative and innovative thinking, the making of moral judgments or high emotional engagement with other humans. If they are correct, then business of the future will require people who are very good critical and innovative thinkers and who have high emotional and social intelligence. That also means that in many businesses the human component could be reduced, with big displacements occurring in many service businesses (retail, logistics, hospitality, construction, commercial services and distribution) and even in some professional fields: accounting, legal, journalism, finance, management, architecture, and medicine. For example, researchers at the University of Oxford have predicted that up to 47 percent of the U.S. workforce has a high probability of being displaced by technology in the next 10–20 years. If this magnitude of displacement happens, how many MBAs will be needed to manage the businesses of the future?

For Hess, that raises some fundamental questions: “Do existing MBA programs produce individuals who excel at critical and innovative thinking and who have highly developed emotional and social intelligence? What type of professional training — business, engineering, law, the hard sciences, architecture, liberal arts or education — best produces individuals with those needed capabilities? What type of pedagogies — the case method, small team project-based learning, scientific experimentation, personalized developmental coaching or personalized experiential learning — best develops those capabilities?”

A big challenge for MBA schools (or any school for that matter) is that those needed capabilities do not come naturally to humans. “All of us are basically suboptimal thinkers because cognitively we are lazy, reflexive thinkers, and emotionally we are basically defensive thinkers,” says Hess. “As Nobel Laureate Daniel Kahneman stated: ‘Laziness is built deep into our nature.’ We are confirmation machines processing only information that confirms our existing mental models, and we tend not to process disconfirming information. We are limited by our cognitive blindness, dissonance and biases. As the late Professor Jack Mezirow stated: ‘We have a strong tendency to reject ideas that fail to meet our preconceptions.’ Emotionally, we engage in what the late Harvard Professor Chris Argyris called ‘defensive reasoning,’ because our natural reflexive emotional inclination is to deny, defend and deflect information that challenges our self-image or ego. That means that MBA schools (or other professional development programs) need to produce future leaders who have learned how to overcome those human cognitive and emotional proclivities so they can excel at critical and innovative thinking and high emotional and social intelligence.”

Hess wonders: “Will other professional schools enter into direct competition with MBA programs because they have competencies in developing those capabilities? Will engineering or arts and science colleges add minors in business? Will STEM-based programs add business concepts delivered online by star MBA professors or by online programs like Harvard Business School’s initiative ‘HBX’? Could this mean that the business of the future will be led by a professional team trained in different disciplines reducing the value of a traditional MBA? Will a two-year residential MBA program be transformed into a one-year residency with an additional year of personal developmental experiential field work, with each student having a developmental coach trained in adult learning and cognitive and emotional development? Or will more schools move to a one-year MBA?”

Hess stated: “Technology will continue to advance and technology will continue to transform businesses. Will that require MBA education to transform? Will MBA programs produce the best critical and innovative thinkers who have high emotional and social intelligence?” Hess, author of the best-selling book Learn or Die: Using Science to Build a Leading-Edge Learning Organization (Columbia University Press, 2014), believes business schools can learn from leading businesses like Google, Pixar Animated Studios, Amazon, W.L. Gore & Associates, IDEO and Bridgewater Associates LP, as well as the special elite fighting forces of the United States Military. All of those organizations are engaged in employee developmental activities intended to develop “independent thinkers” or “smart creatives” or highly “adaptive learning leaders.” Worthy of note is that almost all those organizations are led by non-MBAs.

It will be interesting to see how MBA educators respond to the Smart Machine Age.

Carlos Santos is a freelance writer and co-author of Rot, Riot and Rebellion: Mr. Jefferson’s Struggle to Save the University that Changed America.

About the Faculty

Edward D. Hess

Hess is a top authority on high-performance businesses, with a focus on organic growth and innovation strategies, systems and processes, and servant leadership. His current research examines how to use the science of learning to create a leading-edge learning organization.

Hess’ books include The Physics of Business Growth: Mindsets, System and Processes, co-authored by Darden Professor Jeanne... Learn More

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Servant Leadership: A Path to High Performance

Learn how to deepen working relationships, strengthen employee and customer satisfaction, and re-engage the emotional drivers of success across your sphere of influence.
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