How business schools should pivot amid the Covid-19 pandemic

However, with the pandemic that began last year, business schools are facing their own kind of disruption. The virus did not discriminate against nationalities, nor educational qualifications. Case in point: Professor Ilian Mihov, dean of Insead, was Singapore’s case number 220 after he returned from France last March.

The top business school, which was founded in 1957, recently celebrated the 20th anniversary of its campus in Singapore, a physical presence which let the school be at the heart of Asia’s economic pulse.

Insead was among the various top universities wooed by the Singapore Economic Development Board to set up physical presences here. Under this Global Schoolhouse programme, the list — at varying points in time — includes Chicago’s Booth School of Business and ESSEC Business School. Yale also has a joint venture with the National University of Singapore. And of course there is Insead, arguably the most established in this list.

It has been a win-win situation. Insead’s faculty and graduates have either front row seats or are themselves driving the next big wave of economic development of the region. With around two thirds of each graduating class from the Singapore campus staying put to work here, Singapore gains an unfair advantage in the global competition for talent.

With strong demand for the Insead brand of business education — not just MBAs but other post-graduate and executive education courses — the Singapore campus expanded physically and literally. From just a handful of educators, there are now 65 professors based in Singapore.

This means Singapore and Fontainebleau in France (where Insead was founded) can be operated like parallel campuses, although students and faculty do try and spend time at the different locations. There is a third campus at Abu Dhabi, inaugurated in 2017 as well as a “hub” at San Francisco — close to Silicon Valley — further reinforcing Insead’s moniker of “the business school for the world”.

New ways of teaching

Yet, as Insead marks its second decade in Singapore, the pandemic has wrought havoc on economies, businesses and people. At the operational level, the school faces both disruption in the way teaching has to be conducted because of the pandemic.

See also: Prepare for gradual post-Covid recovery, but don’t bet on return to 'normal'

With physical classes a challenge, delivering online is an obvious way to get around the limitations. Insead has taken a step further. With the “case study” teaching method a key feature of MBA classes — where students are nudged by their professors into making tough decisions with no clear-cut basis and justifying them — the school has created a series of virtual reality case studies, bringing this teaching method to a new realm.

Harnessing new teaching methods like this should not raise any eyebrows. After all, business schools are supposed to not only train business leaders for the world at large but to also lead and effect changes. “I strongly believe that business is a force for good and should play a central role in addressing issues in society and sustainability,” says Mihov, who was appointed as Insead’s dean in 2013.

Known for its diversity — more so than its American counterparts — a famous admission criterion for Insead’s MBA course is to know three languages. Now, the students are to learn a fourth: The programming language Python, to reflect the critical importance of technology in today’s business world.

Bernard Tong, CEO of The Edge Singapore and EdgeProp, is an Insead alumnus. The graduate from the class of July 2011 visited his alma mater recently and met up with Mihov. In between reminiscing about student life, Mihov and Tong also had a wide-ranging conversation, where they brought their respective perspectives on how business schools and the commercial world have changed in tandem over the past two decades and where things should be heading.

Long-term trends, short-term challenges

First the big picture. From Mihov’s perspective — the pandemic notwithstanding — the last two decades had been “quite good” for the world. For one, the rise of China’s economy can be looked back at as the most pronounced period of wealth creation given how so many people have been lifted above the poverty line.

Another “big story” has been how the rapid adoption of new technologies' helping to bring about the so-called Industrial Revolution 4.0, where entire ecosystems, not merely factories, are better integrated for better efficiency, changing businesses and lives for the better. Finally, there is growing concern about society and sustainability.

For decades, the north star of business leaders has been to maximise value for their shareholders. Mihov believes that as a business school, Insead has the responsibility to help change this mindset. “We have to integrate all these things in the process of decision making, and study what is the impact on the environment or impact on gender equality,” he says.

Now, these are longer-term shifts as described by Mihov, who enjoys some insulation from his corner office in academia. In contrast, Tong — in his current role in the business world — is confronted with the near term challenges brought about by the pandemic but which his time at Insead a decade ago had helped prepare him for.

His biggest takeaway was the brand recognition of an Insead MBA and thereby being part of an exclusive alumni network. “Today, the world is so globalised, and information flow of products will become even more globalised. So a program and business school like Insead is great because I can travel anywhere, and there’s always someone that I can look up to for information. And that obviously helped prepare me for the business world,” Tong says.

Soft skills

In a nod to the importance of people-to-people relationships, Tong also says his most memorable classes were actually those imparting so-called “soft skills”, and not those quantitative-based ones, given how he already had his undergraduate grounding in mathematics, finance and economics. “What really stood out for me was the negotiation class. It was quite a new experience for me because nobody ever teaches you negotiation and it is a ‘learn as you go’ kind of thing — you kind of figure out along the way,” he adds.

He recalls being taught really effective ways to approach a negotiation by pretending to be the dumbest person in the room. “Whenever you ask for something and you are told ‘no’, just go ‘why not?’ Those are the things that I would never be able to pick out if I’ve not gone to take the MBA,” says Tong.

Mihov, on his part, has observed that students are starting to appreciate soft skills earlier on, as managing interpersonal relationships in the workplace is recognised as a critical skill set. In a closely related issue, mental health is increasingly recognised as something to be discussed and not a taboo to be hidden. In fact, Mihov points out that these seemingly softer subjects, such as psychological issues in management are more difficult to teach than say finance or economics, and that Insead’s younger, female professors are the ones winning teaching awards for conducting such classes.

Deliberate diversity

Nudged by the changing needs of the business world, Insead is on a constant process to make it training graduates with the right skills needed. Yet, throughout the process, there are always certain skills considered “core”, such as analytical thinking and problem-solving skills. “These are skills we have to teach because these people will be managers, CEOs, entrepreneurs, not just after graduation, but for the next 10, 20, 30 years. I have no idea what people need in 30 years, and I think nobody does. But I can guarantee you that ‘thinking’ will still be in fashion,” says Mihov. “If it is not, then the machines have taken over and then whatever we do is irrelevant”.

However, there are other skills needed for a business environment, which is not necessarily taught within properly defined curriculums or discerned from reading lists. Insead makes it a point that the school’s environment is diverse, drawing faculty from 41 countries. Besides academic qualifications from top universities around the world, they come from very different backgrounds, ranging from consultants to investment banking. There is even a former planner with the Urban Redevelopment Authority of Singapore.

As for Mihov, he is a Bulgarian who spent four years pursuing his Princeton doctorate under former US Fed chairman Ben Bernanke. Meanwhile, the student body is even more diverse: The 2020 MBA class, for example, came from 88 countries.

The point of creating this diversity is because that is how the business environment is like. Companies today need their executives to work in teams across cultures, be adaptable as whenever required in new, foreign markets. There are specific classes on cultural management. “But what is more important is actually the students interacting among themselves. So what we do is when the students come, we put them in groups where we deliberately try to maximise friction,” explains Mihov.

Tong remembers a project group that consisted of a banker from Somalia, a management consultant from Serbia, another management consultant from Spain, an industry executive from Lebanon, and himself, whose prior working experience was as a risk management analyst. “That’s the most diversity I’ve ever seen. But it’s great, right? Because you learn how to work with these people, you seek out friction,” he says.

Mihov believes the school can do a lot more teaching relatively new skills such as data sciences. While Insead graduates are not expected to be coders, they can certainly make do with a good understanding of software.

Beyond financial capital

What might be the changes brought about in the next decade? How will Insead — specifically via its campus here — meet and bring about the changes? Even though the demand for well-trained future generation business leaders can only increase, Mihov does not expect to significantly increase the intake and so the size of the campus will not see another significant round of expansion.

Nevertheless, the campus will be the base and the soul where the business of business education will continue. “I think it will be more of a space where people meet and collaborate and work and discuss things. So obviously, virtual augmented reality will take a bigger role. I don’t know whether this spatial computing will be already in place, or we don’t need even the campus. But I doubt it, there’s a role it will play as an institution,” Mihov says.

The physical aspects of conducting classes aside, there is the bigger mission for Insead’s community — that is to help change mindsets of the wider business environment at large on sustainability-related issues. He acknowledges that not all companies, at least for now, are keen on placing an emphasis on this. “When our students go to these companies, then they can change these companies,” says Mihov. “Businesses have to take into account the externalities that are created. If we can do this, it is better for society, it’s better for us as well”.

'Maximise the returns'

However, Mihov recognises that in placing a greater emphasis on environmental, social and corporate governance (ESG) principles, he is up against the dominant paradigm of maximising shareholder value. He also recognises that there is plenty of convincing to do, as the holdouts are saying to the effect how can anything else be a better alternative than pleasing shareholders as much as possible.

Still, Mihov is optimistic changes can be made, as the shareholder value maximisation paradigm is just a social norm and not a “God-given truth”. “It is true under certain assumptions. It is not the physical law of gravity. It is not a biological law. It is just something that people made up under certain assumptions. And the key assumptions are that the capital that matters is financial capital, and financial capital gets all the rewards,” he says.

Sure, this is an argument that can hold up in the past. However, with real interest rates at practically zero today, financial capital is readily available, says Mihov, putting on his macro-economist hat. Yet, there is also natural capital, human capital and social capital — all of which deserve their rightful share of the returns. “We have to create a framework where we say, I have to maximise the returns to all these different capitals, not just shareholders,” he adds.

Fostering, teaching innovation and entrepreneurship

In their wide-ranging conversation, Bernard Tong, CEO of The Edge Singapore and EdgeProp, asks Insead dean Ilian Mihov how the school has turned the disruptions caused by the pandemic into an opportunity to introduce new teaching methods. What happens after the teaching is done was something discussed, too.

When Tong graduated from Insead, he followed the tried and tested career path of many newly-minted MBAs — joining management consultancies. Now with the vibrant global venture capital (VC) start-up ecosystem grabbing all the headlines, are Insead graduates missing out?

Bernard Tong:

I think the value of the MBA program goes beyond just the classes, but also bonding with your peers, right? That’s how we build a rapport, that’s how we build a connection. With this pandemic, are you taking away a lot of that with online learning? Does it also change or alter your plans?

Ilian Mihov:

I think ‘in person teaching’ is becoming more important than before. What online gives you is the transmission of knowledge. When you can mass produce books people ask, “Why do you have to go to university, college or whatever? Here’s a book. Just read”. Well, it doesn’t work this way. In the 1930s, there was an article in The New York Times that said with the invention of radio, the future of education is that in every classroom there’ll be a radio, the students will listen to the best teachers and there’ll be just somebody sitting there and watching them. That didn’t happen. And when the video came out, again that didn’t happen. That’s because “interaction” is a very, very important component of learning.

Take for example Jeff Bezos, the richest person in the world. He can hire all the best professors, pay them an exorbitant amount of money for his son not to go to university, but to be educated by these Nobel Prize winners and so on. And yet his son goes to university because even if you have the ultimate vertical transmission, you’re missing a lot of the other things.

So, as we plan to expand, we of course use much more online than before, but we’ll be using online in order to deliver some of the information not through books or cases, but through videos online, and then gather together back in the classroom so we can just focus more on the discussion. And by the way, we do another really great innovation.

I mean, we’ve done a lot of crazy things in the last few months. But one of the most exciting things that we have done is virtual reality cases. The virtual reality cases are absolutely fantastic. They’re just beyond expectations because when you write the case, when you read the case somewhere, somehow there must be a sentence. That will give you a clue in which direction to go. But it’s a different thing when you have to see yourself.

My favourite case is the one about boards. So there is a boardroom discussion with you sitting there. And they start asking questions about the strategy. But actually, the question is about discrimination. And you’re basically trying to figure out how sensitive you are when somebody says something which is discriminatory. When it is written, somehow you’ll notice it much more easily. But when you’re actually participating in this, it’s very different.

Tong:

Obviously, the great strength about Insead is the diversity. But one of the things I felt when I was here, which I’m not sure if that has changed, is in terms of career options: where are the graduates going? Is it still very heavily skewed towards management consulting? So, after my MBA, I went to Boston Consulting Group, and I’m one of the 40% who joined consultancies. Has this changed over the years? Are more people becoming entrepreneurs?

Mihov:

We’re still very heavy in management consulting. We’ve become the top provider of talent for McKinsey, BCG and Bain. We’ve overtaken the competitor of Cambridge, Massachusetts, in all these three companies — they used to be the number one. I don’t think that’s a bad thing. Many people like you, they go to management consulting, to understand what it is to learn, and then move on to something else. So it’s actually a great learning platform.

Some students also go because with the cost of education today, they have to borrow and repay their loans, so the option of being an entrepreneur is a little bit challenging. There is this ranking by Pitchbook.com, basically a database for VC funding. They looked at the companies funded by VCs and the amount, and then they looked at where the company founders graduated from. I think we’re the only non-American School in the top five — Harvard and Stanford are very close to the Silicon Valley companies. In the last 10 years, our alumni have raised like US$10 billion of funding for their companies, and I think there are three or four unicorns. So, the start-up culture is there.