Nathan Furr recently published a thought-provoking analysis in Inc. on why the skills developed while obtaining an MBA are misaligned with the characteristics required for driving innovation. The article cites strong sentiment from leading investors and entrepreneurs like Elon Musk, Peter Thiel and Scott Cook, who believe that graduate school curriculums stunt innovation.
As an MBA and an entrepreneur myself who has seen firsthand that an MBA can be a significant driver of innovation and entrepreneurship, I believe its a subject that merits discussion, regardless of which camp you fall into.
At the premise of the analysis is the theme that MBA programs employ traditional and outdated management principles that no longer apply in todays agile startup movement. I wholeheartedly agree that such methodologies run contrary to whats required to adapt and grow today. But leading MBA program have already adapted their approach to better reflect the realities of what it takes to succeed today.
In its simplest form, such adaptation can be seen in new coursework that applies the principles of both value creation and value capture. At Wharton, such coursework included the themes of Entrepreneurship, Venture Capital, Product Innovation and my personal favorite, Contagion how products and services go viral.
Outside of the classroom, MBA programs adopt lean methodologies to teamwork, idea creation and the overall learning process all of which accelerate successes and failures and reward tackling the uncertain. Whartons Learning Teams, usually a five- to six-person team of students who work together on projects across courses, embodies the close-knit and oftentimes intense nature of accelerators and startups. The use of computer simulations whose variations reflect changes in the marketplace encourage students to ingest rapid feedback and iterate quickly.
MBA programs have also advanced the business accelerator model, creating their own mini incubator programs designed to surround entrepreneurs with access to talent, capital and expertise. Many of the characteristics of the TechStars program (through which our own company was incubated) are becoming increasingly embraced by business schools. Indeed, MBA programs still have a ways to go, but there is clear evidence today that this important shift is already taking place. Whartons Venture Initiation Program is a fantastic example of a business accelerator program that is supported by the school, its students, professors and alumni. Stanford launched a similar program and MIT, Columbia, Harvard and UVA are investing in accelerator models too.
Perhaps the largest points missed by contrarians to the value of the MBA program is both the network of classmates and alumni as well as the access to diverse individuals from all walks of life and corners of the earth. In an era where gathering diverse data on a product, iterating and then pushing changes in radically short cycles, college campuses are fertile grounds for feedback and deeper exploration. When we launched our minimum viable product for VerbalizeIt, Wharton was the perfect environment for gathering data and feedback from classmates and alumnus who were representative of our target customers and even investors.
Weve seen significant saturation in the market for business accelerators that claim to embrace the lean methodologies that Elon, Peter and Scott reference, and theres certainly a fat tail of incubators that arent worth the time and financial investment from entrepreneurs. The same can be said for MBA programs that have yet to move away from traditional management practices and curriculum.
The distinction is that high-quality MBA programs can deliver the education, the environment and the practical skills necessary to compete and innovate in todays incredibly exciting global economy.
Ryan Frankel is the CEO and co-founder of VerbalizeIt as well as a Wharton MBA and TechStars alumnus who resides in New York City with his beautiful wife and pair of running shoes.