Show Transcript

Dave 0:13

Welcome to Dean's Council, a podcast aimed at supporting university leaders holding one of the more critical jobs on a university campus. Your panelists can Kring gemellus and Dave Ikenberry engage in conversation with highly accomplished Dean's and other academic leaders regarding the ever complex array of challenges that Dean's face and one of the loneliest and most unique jobs in the academy. Our guest today is John Byrne, founder and editor in chief of poets and quants. By far the largest journalistic outlet focusing on business education. John founded poets and quants in 2010. After having cut his teeth at traditional business journalistic outlets, he may be best known as the initial designer of the ranking scheme, first used by Businessweek in 1988. To write business schools, and approach now mimic in various forms throughout the world. Being involved in the rankings business for over 30 years has given John a tremendous vantage point with which to compare and contrast business schools. It's also given him unique insight into both the strategic threats and opportunities business schools face today. In this fast moving interview, John provides insight into a vast array of strategic issues facing business higher education. This includes issues related to program design and delivery, integrating alumni, the local community and students, the broader implications of high quality undergraduate education more prevalent today, the emergence of one year master's program, and a myriad of other fascinating observations. We hope you'll enjoy this episode.

John Byrne 1:55

We're here today with John Byrne, the founder editor in chief of poets and quants founded in 2010, GE when I was looking to for a little background on poets and quants, I realized that you're the largest journalistic site covering business schools and business education in the world. And what really struck me is 10 times as many stories as second leading publication of any sort so remarkable in your coverage, you know, our senses, John, you know, certainly everyone we've interviewed knows, knows poets, and quants knows you. And it wouldn't surprise us if the majority of our audience listening knows a little something. So we're delighted to have you here, really interested in hearing some of your insights about business education, and really welcome this conversation.

Well, thank you for having me.

So I think, you know, I think our first conversation is really our first question is just take us back and give us a little perspective on poets and quants and sort of how, how you came upon the idea and how you have emerged from from concept to reality? Sure, well,

you know, you may or may not know that I have the dubious distinction of having created the first regularly published MBA ranking back at BusinessWeek, in 1988. So that's my interest in business education. And what that allowed me to do is to reach out to a lot of schools, not just, you know, the handful of schools that are commonly at the top, and really get a sense for how the industry of business education actually operates. And out of out of that experience, we did rankings on executive education, executive MBAs, the full time MBA market, eventually the undergraduate business major, we did guidebooks on executive education, and MBAs as well. And that really got me deeper into the field. But then what happened is, you know, I went on, I did other things. And when it was coming time for me to decide, do I want to actually create my own business? The first thing I turned to was business education, it made sense. Because even though I hadn't been covering it for many, many years, many of the characters in it remained stable and involved. It was something that I also felt I couldn't get my arms around in a way where I could add true value and perspective. And so poets and quants was sort of a natural outgrowth of my interest to finally start a business of my own and to do it in the field that I admired, and that I knew something about. The other. Other inherent thing here is that I'm a true believer in higher education. I'm a first gen college student, one parent, my father are finished high school, my mother didn't even finish Grammar School. And I really think that higher education transformed me as an individual and opened my mind to life's possibilities. And I think without it, my life would have been dramatically different. So I'm a big believer in higher education, number one, but I'm especially a big believer in business education, because of the obvious outcomes for people, it does transform lives, it does make a difference. And it's not just about the money in the physician, it's about being able to live a more multi dimensional life. Life has more meaningful life, it's more fulfilled. And while there are a lot of resources today, that didn't exist, for me, when I was young, there's still a great number of people out there, who aren't from families that are educated, who don't have the kind of dinner table discussions that a lot of people have in this country. And I wanted to create a place for them to go and explore these options that I believe are incredibly helpful and valuable to people. So that's that was really, you know, the personal motivation. And then the professional motivation is to build on what I had already done earlier in my career, and to finally be an entrepreneur of my own.

Jim 6:25

Now, I wish, I wish that talk right there, what you just said, to get amplified to so many families who are trying to figure out how and why to go because you really just stated a case for business education, that is well stated as anything I've ever heard. I, I commend you for that. But you've been such a great student of this game, just because of that. And I think it was terrific. And I so I, just to add on to that or to just take you one step further, how do you see the changes in business education? Since you've been really sitting on the sidelines? You know, you're the sportscaster that's calling the game, and some succeeded, and some didn't. And so how do you see the changes that have taken place? And in where do you see this thing going? I know, it's a very open ended question. But I don't know anybody that knows better than you to be able to answer that question. So I'll throw that as

John Byrne 7:25

well, the first thing I want to do is defend the need for the education because sadly, I think that that's a need, you know, there are people who over the years have questioned the value of the MBA in particular. And truth be told, you know, the world has not become simpler. The world is not accept people with fewer skills, less tools, and a diminished intellect to, to work with this world. If anything, it's more complex, it's more global, it's more interdependent, it's more focused on technology, it's more focused on collaboration and getting the best out of people. And if anything, all of those trends underlying the need, and the value of the MBA, there is a value proposition here. And to me, it's obvious, I think an MBA degree is a no brainer. Nonetheless, what we've discovered in the past decade, primarily, is the decline of the two year residential MBA. Now part of this has to do I think, with undergraduate education in business becoming really good. Undergraduate Programs are superb. They, they deliver incredible value. And to some degree, I think they have cannibalized the graduate degree in business. Second thing that's done some harm to the two year residential MBA or the rise of specialty master's degrees that you can complete in one year. And if you know you want to work in finance, and nothing else, maybe you get the Masters in finance, if you know you want to do global supply chain management, you get that degree or you go for the degree in accounting. So those specialized degrees also have helped us somewhat cannibalize the NBA. And then the other thing has happened is the development of the online market. And that was truly accelerated with the pen EMIC. It's gone well beyond just the NBA itself. But it's now into many specialized degrees and more importantly, into the executive education field. But that option, and the flexibility that it affords a lot of people has led to explosive growth. There's way too many of these programs chasing actually at this point, or too few students. Most of those programs are commoditized. I don't think they're of high quality, but there are a good number of schools With great brands doing a fantastic job in online education. And despite the decline of the two year residential MBA, if you looked at the overall enrollment trends, you'd find that more people are studying for an MBA today than ever before, in part because of the online phenomenon. So I think that's good news. But I but I still think that there's nothing like sitting in a classroom in front of a prepared professor, and your classmates bringing all this incredible experience to you for two years and having the benefit of an internship to try out a new career field that you may be, you may find yourself incredibly passionate about. Or in fact, you may find that you definitely don't want to do that you want to do something else. And of course, that internship is also essential to enter certain fields, largely consulting and finance to some degree, because employers increasingly want a try out before offering someone a full time job offer. So you know, I, I, I lament the decline of the two year MBA experience, because I think it's incredibly valuable. And it's also valuable for people to take a little time off, and give themselves after three to five years of work experience, a time to reflect and think, and maturity to do. So that makes that experience so much more valuable. So we are seeing the decline of that degree. And in particular, the decline in domestic applicants, which has occurred for about a decade, outside the pen pandemic blip, which was an anomaly when applications went through the roof. I think some of that's occurring because of undergraduate debt. And the perceived high price of the MBA, two year MBA, people look at the price tag, and they're not aware of the discounts that are occurring, the vast amounts of scholarship money, but they're making judgments based on how much undergraduate debt they still carry, and also what that price tag looks like, and their reluctance to get further into debt. I think that's a major problem for the industry. I think that's a bigger problem than just the fact that employers are trying to hold on to their employees and giving them raises and increased job responsibilities to keep them from going to graduate school. I think it's, that's that's even a bigger reason than the quality of undergraduate business education or the rise of this specialty master's degree. And it goes to the heart of the business model of the business school. Because the business model in many ways, I think of it as how it was for me at Businessweek when I was executive editor, and digital journalism was transforming the field. And we have these high cost structures with layers of editors and copy vest. And we had to trade analog dollars for digital Dimas. So suddenly, the economic model just fell right out for us. In munchable, media really couldn't, couldn't change fast enough to make a difference. In the way the high cost of tenure track faculty. The low teaching loads. The continued emphasis on research that only reaches very few people. The demand for ever larger and more beautiful facilities and support staff at business schools is making that economic model untenable for many schools. And that's particularly true for schools that don't have a full portfolio of programs, from undergrad to executive education to five or six MBA programs to specialty masters. The more limited your portfolio, the fewer level levers you have to pull to make a difference on this economic model. So how have schools dealt with it? They've dealt with it the same way old media dealt with it with little changes, okay, we're going to increase the number of adjunct faculty, okay, we're going to have more clinical professors and we don't have to pay as much but those that's tweaking and not really rethinking the mind. And it turns out, you know, digital education, which originally we thought was going to make higher education more affordable and more accessible and cheaper. It's that really didn't turn out to be true. High quality digital education is an expensive proposition in and of itself. And there still is some a lot more to selectivity Higher, higher selectivity in programs which make even digital programs at the best school Not as affordable or accessible as you would have thought. Right? And certainly not the cash cows that many people thought it was in the beginning.

Jim 15:07

Yeah. Yeah. John,

John Byrne 15:09

recognizing that you got your start, sort of in the rankings world. And we would like to talk about where where rankings are going, however, to follow your most recent point. So what are you seeing as the innovations, the new initiatives, the ways of coping that some of the either unranked or or those that don't have the full resources? What kind of innovations and creativity are you seeing from other institutions? I

think most of it has to do with increased flexibility in online programming. So either if you have an evening MBA program, or any kind of evening graduate program, where you have an executive MBA program, a weekend program, having a flexibility for students to choose, among the different formats, I think, is a real important innovation. Because there will come a time when a student may be able to do the Tuesday, Thursday grind during the night, or the weekend thing every other weekend. But there will also come a time when maybe they can't because of personal or professional demands, and they would be likely to want to switch. So an online format, that flexibility across different programming formats, I think is an innovation. That's important. I think another innovation that's going on at business schools is you know, historically, business schools have been isolated schools on university campuses, they've often been on the periphery of the campus, they've been very, there's been very little connection between and among the departments in schools. And one of the biggest trends I see one of the most innovative trends is opening up the business school to the overall university in the overall university opening up to the business school. So you see much more interdisciplinary work, you see a lot more collaboration among in between the schools, this has has happened greatly in the areas of sustainability. And now in healthcare. The business of health is probably the single greatest opportunity for business education in this era right now. So sustainability. These are two incredibly hot fields. As you know, you know, healthcare is 20% of the GDP and the other 80% are concerned about health care, because the cost and the accessibility of health care. So it's an industry that has been slow to professionalize. And it's an industry that is ripe for disruption. And there are all kinds of med tech startups and biotech startups. This is an area I think that will become as important if not even more important than the area of technology. As we defined it right? Most MBAs go into consulting, finance and technology. And then it used to be consumer products, and then it would splintered and manufacturing Media and Communications and all the other areas. I think healthcare and business of health more broadly defined, will be the most important area for for business graduates over the next 20 years after consulting and financing could even ultimately rival consulting and finance because, you know, consulting and finance is part of the business of health. In terms of in other innovations I've seen, you know, there's a lot of talk about lifetime learning, and there always has been, but no one has ever really, totally figured out how to make that work. But I think that schools that have amassed a lot of video content for their online programs, could very easily put all of that content online for free for their lumps. And while they bring their alums into this free, exclusive area, they can sell their alums other things, including more traditional educational executive education programs, including certificates, and including, you know, topical lectures by professors, on things that managers are dealing with today. You know, if you look at the internet, more than half of the information on the internet is either false or misinformation. Yes, the ties that we have to our universities, we trust our universities, we're loyal to them. So I think there's a lot of room for alums to have a place to go to get reliable, factual information that isn't biased. It's based on expert opinion and research and thoughtful people in the room, bringing that community together. And I think that there are certain schools that are trying to do this This put all of their video content that otherwise is only used in a class, here and there, make it all available and make that as sort of the cheese and the mouse trap to get alums to buy other things. I think that that's a really cool idea. Some schools are using master and management as a way to get at this specialty master's program. You know, in every specialty master's program, there's a core basic stuff that you deliver, what wouldn't be, wouldn't it be better to have a mim that is so flexible, that you could sell it to people who are interested in the business of health, or sustainability, or supply chain management. So you tack on three or four courses at the end? to specialize in them, and then you have a mim that functions in a more flexible, more nimble way. The benefit of this for school is that you don't over invest in all these specialty master's programs. Because once you start something, it's really hard to get rid of it. In schools, it started things like cybersecurity master's degrees and blockchain master's degrees, found themselves stuck with programs that could only attract a handful of people. But faculty who wouldn't let go of them so much better to have a more nimble model that a lot of the innovation I think is occurring at schools that you'd like the University of Illinois just got to go make a mention here. Look, what has been done at that school at the yeas College of Business is remarkable that you can take issue with the fact that, you know, they're running internet live classes with as many as 1000 students, and how effective can that be? On the other hand, they have disruptively priced their a high quality degree at under $25,000 for the MBA. But more importantly, what they've done is they've done what everyone has been talking about in in higher education for over a decade, but very few people have done. They've decoupled degrees and forces so that you can take one course or you can take a series of courses and gain our certificate, but not merely a certificate, you can gain a credit bearing certificate that you can then apply for a full degree. So you're creating pathways to degree programs specialized and the MBA itself. By doing this, many universities don't want schools of any kind to create credit bearing certificates, your people have certificates, because that's easy to do. But so does link and Google pools need to need their competitive advantage, their degree granting status, their ability to grant academic credit, to compete with Google, LinkedIn, Apple, and everyone else is coming into this field of education. And the schools that decouple these courses and give credit for them. And the schools that put them together in little packages, to teach someone how to do digital marketing or whatever. At the end of the day, I think that's going to be the model. And that's going to win, because people want education that's on demand, the world is changing rapidly. So are the needs and demands on managers and leaders in business, you know, you get a promotion. And now you can't go off for the five week or on a college campus for an advanced management degree or something like that. If you don't have an MBA, or suddenly you were in finance, and now you're exposed to other disciplines, or or you lack business analytical skills to help you make more informed decision based on data, or you have no idea at all about what you should be doing in diversity, equity and inclusion, or sustainability, but you need on demand education from experts, the schools that are able to provide that provide it quickly and flat flexibly will be I think the school is at the end of the day, we're going to win. And I will say the University of Illinois is breaking these barriers in ways that are really unheard of in higher education across the board. And at price points that are shocking.

Jim 24:30

You know, I love what you're saying. It's so fascinating. I think that I always was worried that the European model of the NBA, which is a one year model would be something that would start to hit the American market. And then I thought well, okay, the only way that the secondary and tertiary schools were going to go to a one year MBA was if one of the top five schools went to a one year because everybody's a lemming and as soon as one guy does a one year MBA from the top everybody's gonna follow that didn't happen that way. Now, but it's so interesting that you're talking about these innovators like Illinois. So as kind of our final question to you, rankings help me as a dean, your rankings helped me as a dean to go look at innovative programs and say, This is what they're doing. This is pretty cool. I wonder how we can adapt that at my school. And so in actuality, you're sitting in a position where you really can show these universities that are in a quandary. And so many of them are, because they just don't they want to tweak like you said, I'm going to tweak this little piece, or this little b, that's going to work. You got to get innovative. And you're right, Illinois absolutely broke that barrier. They really knocked it out of the park. You know, how do you get rankings, the way you guys do in the traditional way of doing rankings? How do you get rankings to really tell this community about the innovators and then the say, if you're going to differentiate yourself, which we all know is hard to do? I mean, we all teach Net Present Value discounted cash flow and the four P's of marketing. How do we differentiate? How do we differentiate our program from Illinois or somebody else to make us stand out to make John Byrne write about us imposing quants so that everybody understands that so here's my final question. Okay, I don't

John Byrne 26:21

I don't need to write about it all for find out about you. But let me just say there are two elements to competence in the business education market that are the often been overlooked. And they're really simple things location, and alumni success. Okay, oh, yeah, you can talk oh, we're gonna bring our GMAT up by buying high GMAT students with scholarships. And we're gonna play the US News ranking game by, you know, making sure we hit all the metrics that they're measuring. But the truth is, for a second, or third tier school, it's to play up their location, with their local businesses, and local business leaders tend to get very tied into their communities, to have local advisory boards, to embrace the business community. And if it's mid, mid sized, private, privately owned family businesses, that's what it is, if that's what you have, or if it's offices of the big well known companies that are publicly traded, that's what it is, or the big service firms, but using your location smartly, and, and making strong and deep ties to the community and, and serving the community in some way. Maybe helping small businesses helping these other businesses succeed, survive and creating helping you create an ecosystem for startups and successful entrepreneurs. I think that is a core element of any strategy for second or third year business school. Second piece of this is alumni success. And what I mean by that is, is really communicating to your community, your constituents, your stakeholders, that your degree matters, that people have been able to use it to leverage their lives in ways that has enhanced their lives and made them successful. Because then those alumni stories, people will read them and identify with your school, and will think that your school offers a value proposition that's worthwhile. Those are the two most important things. Now you could, of course, you want to have flexible programming, so you can meet the needs of your market, you probably want a portfolio product, but in many cases, if you're a small school, it's gonna you're going to be suboptimal. So you got to figure out, you know, what do you want to focus on? This is like, core business strategy stuff, you got to focus, you got to figure out your priorities, and what are your core competencies based on your faculty and your, your success to date? It's that's what really counts now as for ranking, so let me just say, you know, I often feel like Dr. Frankenstein, I created this thing in the laboratory. He got out of the laboratory, and now it wreaks havoc all over the world. It's like Financial Times. It's the US News. It was Forbes its fortune. It's, you know, it had been the economist as he said, You know, it's just like, it's out of control. It's totally control. And much of it is schlock. It's, it's intellectually dishonest there. Every single ranking is flawed, including anything I do. You can't measure intangible things.

Jim 29:44

I agree. I agree.

John Byrne 29:45

And, you know, as much as as a first generation college student graduate. What I hate about the rankings, and this may come as a surprise, is that they were award exclusivity. And they reward premium price education at the expense of inclusivity. And accessibility? Yeah, you know, and I'm trying to think, okay, what can we do to make it clear that there are quality players who are offering great education, at affordable prices, with acceptance rates that are somewhat selective, but not so selective that you're rejecting really high quality people. I mean, generally, when you look at these elite MBA programs, you could argue that 80% of the applicant pool is qualified to attend, do well graduate and have successful careers. And yet, only 20% or less of the students or the applicants are being accepted. I'd like to reward the schools that are letting in half of their students, at least, and actually have tuition rates that won't make you incur six figure debt. And yet, we'd give you a great education and a great start to your career. And what rankings do is they diminish those possibilities, which is a problem. And then what's measured, you know, does it really matter? To some degree? Yes. I mean, I guess it matter is, if a school obviously can get you jobs at graduation, three months later, I think that certainly matters. Starting compensation, because there's so many factors in that number. But it's it's really, you're comparing apples and oranges, right? Because it's solely based on career choice and geography. To some degree, sure, brand, reputation matters. But it may not matter in the grand scheme of things as much as how many kids you're you funneling into consulting and investment banking versus healthcare, NGOs, media and entertainment, manufacturing, real estate, jobs that don't pay nearly as much as the $190,000 to start at McKinsey, Bain BCG with a $35,000 starting bonus. So even the compensation metric is a little wacky. And then when you think about measuring acceptance rates and GMAT scores, you know, you're you're basically creating a market mechanism for schools, the funnel or scholarship aid to high GMAT earning applicants, instead of applicants with a more holistic review that is done by business schools in a way that would really benefit the school and the program long term. And what you can't measure is the most important, which is what is really the academic experience. What's the educational experience of the students going through that program? And what are they really gaining? intellectually and emotionally. And you can't measure that, but that's the most important thing to measure. And that's where rankings completely fail. Now, the good thing about rankings. And I know a lot of people take issue with this when I say this, but here's one of the reasons why the MBA remains the most popular graduate degree in America and the undergraduate business major is the most popular major in America. I believe it's because of rankings. Why? Because every year and you have major media outlets pounding you with these lists, and it's not necessarily about who's number five and who's number 12. And who's number 18. What's going on here is you have a business week, you have a fortune, you have an economist, you have a Financial Times reminding you of how important business education is to success in business. And I think that reinforcement, year after year after year in the stories that follow it, convinced a lot of people that this is this is a necessary ingredient for me to be successful in business. And I think that has led a lot of people to consider business education who otherwise would not have. So that's the benefit of right is the the negative as well as what I said it rewards exclusivity and high prices over inclusivity and accessibility and, and focuses on metrics that create artificial distortions in the market. That's a problem. But you know, the people who consume rankings don't look at the footnotes. Don't look at the index numbers that show no statistically meaningful difference between a school rank them in a school rank 15. They just look at the number and say, Oh, that's the number It's just, you know, as mindless as mindless is the journalists who create these things. It's a mindless use of the consumer. Who uses?

Well, John, we could think of no one who could speak with such mindfulness, about the value and the purpose of business education sort of across the landscape. Really a terrific conversation. Thank you so much for joining us here today.

No, and I want to thank the three of you for doing something that is needed. Because, you know, being a dean is a lonely job, okay. I still like being that CEO, you don't have a whole lot of people to talk to, because everyone has, everyone is motivated by their self interest, right. And sometimes it's hard to just get good advice and hear what other people are doing. So to the extent that you're, you know, revealing best practices, the extent that you're you're creating a community, where people can share ideas and perspectives, that it's extremely valuable. So my hat goes off to you guys.

Jim 36:05

Well, thank you that really appreciate it. And happy holidays. Thanks, John, so much. I really appreciate it. Yeah.

John Byrne 36:11

Great,

thank you.

So anything can well as anticipated, that was really, we could have we could have gone on remarkable. I mean, his whole history, but really appreciation across the landscape. And that's I thought what was most compelling was that, you know, he can talk about business education as a, as a contribution to humanity in a way that is both meaningful, but with real credibility,

Jim 36:51

and so analytical and so very much factual in terms of his thought process. You know, I think back to so many programs that were kind of put in as me twos and they, they never got out of being me too. And I think his he really points out some very important things that, that today's business school Dean's need to listen to, and, and are going to benefit from. So I couldn't have been more pleased to listen to him and his analysis of what's going on in that in that environment.

John Byrne 37:23

One thing I picked up, which I thought was, couldn't have anticipated was, you know, his ability to unpack rankings in a way that wasn't either defensive or you know, from the perspective of the How to and rankings was really, really important to hear.

Jim 37:40

Yeah, his objectivity is spectacular, totally objective and even his own career and his own business. So I couldn't have appreciated him more. Really, it was wonderful.

Dave 37:51

Thank you for listening to this episode of Dean's Council. This show is supported in part by Korn Ferry leaders in executive search. Dean's Council was produced in Boulder, Colorado by Joel Davis of analog digital arts. For a catalogue of previous shows, please visit our website at Dean's council.com If you have any feedback for us, please let us know by sending an email to feedback at Dean's council.com. And finally, please hit follow or subscribe on your favorite podcast player so you can automatically receive our latest show