INTO THE UNKNOWN
How SA’s MBAs must change
The future of the business environment has never been so uncertain. How can business schools help companies and individuals navigate their way into this void?
Benjamin Franklin put it simplest. "By failing to prepare, you are preparing to fail," the scientist, diplomat and co-author of the American Declaration of Independence once said. But what if you don’t know what you are preparing for? What if the pace of change is so frantic and tomorrow so unpredictable, that any attempt to forecast the future is no more than educated guesswork?
That is the challenge facing business schools in 2017: preparing business for a journey into the unknown. Everything companies and executives think they know about the business environment is in danger of becoming obsolete. Artificial intelligence, virtual reality, robotics, data analytics, convergence, digital communications and crypto-currencies like bitcoin are just some of the disrupters destroying old assumptions.
Then there are social, political and environmental tensions. In SA alone, says Morné Mostert, director of the Institute for Futures Research at Stellenbosch University, there are at least eight possible SA scenarios for the next few years. They range from economic impoverishment caused by narrow, wealth-distribution policies, to global engagement and robust growth.
The pace and confluence of new technologies is creating the need for a fresh set of multidisciplinary technical skills
US education trends forecaster Charles Fadel reckons 38% of existing service-industry jobs will be lost in the next 15 years, many of them to automation. A report published by the European Foundation for Management Development says digitalisation will transform workplaces and job descriptions.
"Ideas, people and work will be liberated from silos and made freely exchangeable," it says. "Rather than jobs and roles, work will be thought of in terms of assignments, with teams assembled from the most suitable and engaged talent to execute them."
That may be a little fanciful but few would disagree with the report’s conclusion that in a digitalised world, "organisations and their people need to evolve from seeking stability to embracing agility".
That’s true of all business disruption, not just digital. But can companies face it alone? Fadel says the global education system must transform to make itself relevant to a 21st-century working environment.
Business schools have a key part to play in that.
Two years ago, Nedbank announced it was suspending its executive education ties with local schools because they were not forward-thinking enough. They were preparing its managers and executives for 5-10-year horizons. The bank wanted to look 20-30 years ahead.
Usually, say schools, it’s the other way round. Clients have to be dragged into the future. University of the Free State Business School director Helena van Zyl says: "Companies are more concerned with the immediate. They want to prepare people for the next five years."
Rhodes Business School director Owen Skae says: "Employers are often not interested in the new ideas to which we expose students. What they care about is balance sheets and stakeholder value."
Nicola Kleyn, dean of Pretoria University’s Gordon Institute of Business Science (Gibs), adds: "There is this oscillation between doing what business wants and being provocative to business and telling it to consider ideas it may be ignoring."
The current technological maelstrom has been dubbed the fourth industrial revolution. Zaheer Hamid, director of the Management College of Southern Africa (Mancosa), explains: "The first revolution used water and steam to advance production. The second harnessed electric power to greatly increase it. The third used information technology to automate production. Now the fourth is extending the third by merging technologies which breach recognised biological, digital and physical parameters."
Regent Business School MD Ahmed Shaikh says: "There is an ongoing disconnect between what is being taught by education providers, and the needs of employers as determined by the pace of technology. It is not just the pace but the confluence of technologies creating the need for a new set of multidisciplinary technical skills."
That’s just the skills. What about the managers and executives who must provide leadership? Hamid says business schools are "scrambling to reinvent themselves and understand their purpose" as companies and individuals demand guidance. Executive education, through which schools provide tailor-made training for companies, is part of the process. But MBA students who, corporate history suggests, will one day dominate boardrooms, are the ones who will eventually have to lead.
The MBA study process itself has already had to adapt to change. By tradition, classroom time is a critical part of MBA programmes, forcing students to interact personally and work in teams. As recently as two years ago, nearly every SA business school was adamant that this face-to-face experience was sacrosanct. Not any longer. In a social media era when everything is becoming increasingly virtual and people have never met most of their "friends", even diehard traditionalists are conceding defeat.
At North West University School of Governance & Business, acting director Tommy du Plessis has a new definition of classroom time. It’s "synchronous" teaching, which allows an MBA lecture to be aired live to students in classrooms at three campuses.
Stellenbosch University Business School dean Piet Naude says: "There’s a new generation coming through for whom virtual is real.
"We would still like them to have a link with our campus — maybe a week at the beginning of the programme and one at the end — but we are in a transition. It’s possible, likely even, that one day people will see no need for what we consider to be personal interaction. A screen image will suffice."
Dedicated classroom time is also becoming less of a "given" in executive education. But what about the teaching itself? Milpark Business School dean Cobus Oosthuizen says preparing people for uncertainty requires not only forecasting and context but also a kind of emotional support.
"Lots of CEOs know the world is changing but have not reflected on the impact and relevance to their organisations," he says. "It’s not business as usual but business as unusual. Part of our engagement with the client is to make them aware and give them time to reflect."
One thing they can reflect on is that CEOs may no longer exist in the future. Hamid thinks they could be overtaken within a decade by chief strategists, people who can constantly transform their companies and industries.
But the future isn’t just about leaders. Recent studies of the business environment talk of "overwhelmed employees" unable to keep pace with change or understand how it will affect their working environment and, ultimately, their job security.
"How do they remain centred among all these changes?" asks Oosthuizen. "When planning, you have to consider
the individual and the organisation and the environment simultaneously."
That’s where business schools come in. "Someone must make sense of all this and interpret [it]," he says. "You can’t put your head down and wait for this tsunami to go away. As schools, we have to prepare leaders to look at where we are all going."
You know you have to get somewhere but you don’t know how. So you stumble along and maybe get there by accident
The trouble, says futurist Pieter Geldenhuys, is that people don’t like to abandon familiar management territory. "We don’t know what the key business influencers will be in six months, never mind six years, yet we use the same management models as before to try to define the world. In physics, if you disprove a theory, you disprove an entire century of work. In the world of management, if your model works 50% of the time, you are ecstatic."
Geldenhuys, director of the Institute for Technology Strategy & Innovation at North-West University, adds: "All management models are wrong. Some are useful, at best."
Instead, he talks of using "complex adaptive systems", "attractors" and "probes". The essence of them all is the ability to react quickly to business opportunities. For example, the willingness to test (probe) the market with a product or service instantly, instead of after drawn-out market research. "You have to be in the right position to harness opportunities as they appear," he says.
"We can forecast key trends but the opportunities they bring probably won’t appear in the way we expect. The days of predictable outcomes are over."
In some cases, says Shaikh, the result will be companies behaving like "a drunk in a stupor". He says: "You know you have to get somewhere but you don’t know how. So you stumble along and maybe get there by accident."
And if you don’t? Then maybe the market doesn’t need you, says Henley Business School dean Jon Foster-Pedley. "It’s natural dynamics. Why shouldn’t large companies die if they don’t adapt?
"Wouldn’t it be better for society to let new ones thrive?"
In any case, he says, there’s no need to obsess about uncertainty. "People have been dealing with change for thousands of years."
Rather than worry about what might happen, says Mostert, companies should focus on what they would like to happen. He says SA’s sociopolitical future "has never been so uncertain" because so many factions — unions, politicians, business, academia and private citizens — are all fighting to protect their own turf. More effort is needed to build on what collaboration and co-operation exists.
But that’s no reason for companies to despair. "What future do you want for yourself? Make that your starting point and you start to see opportunity. The future is not something to be survived but to be embraced. Even if probability is the closest any of us can come to assumptions, there are a lot of opportunities waiting out there."
Oosthuizen says: "If all you do is react to the future and let it shape you, you are lost. You must shape it."
That’s why business schools say they provide not just content but also context. Kleyn says: "Creating capabilities around the theme of uncertainty is very important. The danger lies in becoming obsessed with what the future holds, rather than how to tackle it
when it appears. If a student leaves here unable to think of technological change in the context of socioeconomic change, then we have failed. We need to take people out of their comfort zones.
"You need to start from a strong functional basis then expose them to integrated and conceptual ideas, often on themes with which they are totally unfamiliar. Everyone is hearing about all the scary stuff that’s coming but they don’t know how to reconcile it with current business models."
Nowhere is ignorance of "scary stuff" more evident than in digital technology.
Brian Armstrong, former chief commercial officer at Telkom and now the digital business chair — sponsored by his former employer — at Wits Business School, says: "Everyone says they know about digital but it’s mostly anecdotal and there appears to be no academic substance. To what extent are current business plans relevant to the digital world? To what extent do they need to be adapted?"
And is there any guarantee that new technologies will find a natural fit in the future? While he believes virtual reality will play an important role in education within 10 years, Armstrong reflects: "In the business environment, it’s still a technology looking for an application. A lot of the basic science for virtual reality was around when I studied for my PhD 30 years ago and we’re still looking for ways to use it."