The global financial crisis and the contagion of faltering economies and corporate collapses that accompanied it gave rise to widespread criticism of the chief executives and senior managers whose aptitude and judgement were found wanting. The impact of the recession may be receding sooner than feared but questions about the quality of corporate leadership remain.
Never far away when such questions are being asked is the role of business schools and in particular their flagship product, the Master of Business Administration.
MBA programs will have to change to reflect the leadership and management failings revealed by the financial crisis, and also to incorporate shifts in leadership attributes made necessary by the global recession, the chief executive of The Leadership Consortium in Melbourne, Christopher Bell, says.
"MBAs are great when it comes to technical skills," he says. "But what we're going to see [in leadership training and education] is an emphasis on developing the whole person and developing the range of skills, capabilities and attributes necessary for managing in a complex and rapidly changing world."
The Leadership Consortium is a business-based professional development and networking organisation for senior executives. Corporate members include Boral, GlaxoSmithKline Australia, National Australia Bank and Shell as well as several government departments and agencies.
Organisations that invest in leadership development will be acutely aware of the need to tune their programs to the skills and capabilities that will define corporate leadership in a vastly different economic landscape, Bell says.
"It's relatively easy to lead and manage when the economy is going well," he says. "It's much more difficult to manage in a volatile economy.
"The economy is bouncing back - that's fantastic - but there are still lots of challenges and very rapid change coming at us, not the least of which is climate change. We're moving into a much more volatile environment."
Leadership attributes in demand include a global perspective, strong cultural skills, managing creative and innovative people, the ability to communicate a company's vision, a preparedness to question and test assumptions, and the ability to solve problems creatively as well as analytically, Bell says.
"In the long run, to be an effective leader, you will have to be a much broader person in your interests and commitments."
Bell believes MBAs will have to reflect not just the values and priorities of the organisation but those of the wider community as well.
Deloitte Leadership Academy partner Tom Richardson believes the MBA will move away from its emphasis on "functional" disciplines in favour of developing personal leadership skills.
The most in-demand skill sets identified by the Deloitte Leadership Academy, an online management education and networking service for senior executives, include people-management skills, fostering teamwork, bringing about change and innovation, business ethics and communication.
MBA programs have been slow to pick up the "personal level" skills that will be in demand in the wake of the global financial crisis as companies align their investment in training and development to their strategic challenges and performance objectives, Richardson says.
Companies which before the crisis were willing to fund post-graduate education for rising executive talent are now more likely to take a "pragmatic" approach to leadership development with greater emphasis on return on investment. Leadership development will be targeted to the individual and the contribution that individual can make to the organisation and its objectives.
Universities recognise that MBAs and management education generally have been called to account in the wake of the global financial crisis - and they are responding.
Monash University in Melbourne has conducted an extensive review of the requirements for MBA education and is developing a new curriculum, the director of the MBA program at the university, Associate Professor Peter Reed, says.
Despite widespread criticism of MBA programs, Reed says the MBA retains a critical role in management and leadership education. However, he agrees that change is needed.
"They should focus on providing an educational experience for experienced managers to enable them to effectively lead and manage organisations," he says.
Reed stresses the importance of MBAs, which reflect not only the leadership requirements of individual executives and organisations but the wider community as well.
"MBA program designers need to engage with the stakeholders they serve, including industry and society as a whole," he says.
At Melbourne Business School, a visiting professor of strategy and leadership from the ESCP Europe school of management in Paris, Patrick Besson, is a long-time critic of the approach taken by business schools.
He believes there is a misalignment between the role and skills of a general manager and what many business schools teach in their MBA programs.
"Traditional MBA teaching does not teach someone how to be an effective general manager," he says. "Rather they still rely heavily on teaching functional knowledge - marketing, accounting and human resources."
Besson calls for the "reinvention" of MBA teaching. However, managers also need to reinvent themselves - and change does not come easily.
Managers generally have an ingrained preference for a particular style or approach to a problem, Besson says, "whereas the style used must be driven by each particular situation".
Management education can play a role in changing attitudes, and so can exposure to new blood.
"Most of the time, it is difficult for existing management to completely change their mind-set, so you might need to introduce some new challengers to the top management team - maybe a new CEO or new general managers," he says.
Besson is also critical of taking a catch-up approach to leadership education. The key to successful leadership is to be ahead of the game, he says.
"Leadership is not to become a leader after the crisis. That's too easy. Leadership is to anticipate a crisis and to prepare the systems to avoid or minimise the fallout of the crisis."
Leadership skills in demand
01 Global perspective.
02 Strong cultural skills.
03 Management of creative and innovative people.
04 Strong communication of company vision.
05 People management.
06 Solving problems creatively and analytically.
07 Preparedness to question and test assumptions.
08 Fostering teamwork.
09 Direct change and innovation.
10 Abide by business ethics.
Source: The Leadership Consortium, Deloitte Leadership Academy
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