In 1908, Harvard University introduced the first MBA as a general management degree. It combined subjects like finance and accounting with leadership, entrepreneurship, and communication. In the midst of the second industrial revolution, we needed leaders to learn effective management techniques in order to manage increasingly complicated business structures.
There are some undisputed strengths of a business school education; access to great researchers that know the latest and greatest in their fields, and the network of students and alumni that can help when it comes to finding a job, a co-founder, or even a romantic partner. Today, however, business schools seem to be losing their edge.
In 2017, most U.S. business schools reported declining numbers of applications, including renowned institutions such as Harvard. This year's data is expected to show a fifth consecutive year of declining applications for MBAs.
At the same time, we are seeing an increase in alternative education options. Take MOOC's (Seth Godin's altMBA), various platforms offering micro-degrees (Udacity), and physical schools with new curricula and teaching methods such as Kaospilot, Amani Institute, Knowmads, and THNK School of Creative Leadership.
A growing number of companies today don't care whether you have an MBA anymore. Earlier this year, Glassdoor published a list of 15 companies that no longer require a degree, one of which was Google. Laszlo Bock, Google's former SVP of People Operations, explains that there are five attributes Google looks for in new hires: general cognitive ability, emergent leadership, humility, ownership, and expertise. "When you look at people who don't go to school and make their way in the world, those are exceptional human beings. And we should do everything we can to find those people," says Bock. Too many colleges "don't deliver on what they promise. You generate a ton of debt, you don't learn the most useful things for your life. It's...an extended adolescence."
So why is it that business schools seem to have lost their edge?