In my March 29, 2012 blog entry on business ethics and shale gas, I asked readers to answer the following question:  “Should the company provide water to the families who claim their water was harmed by gas drilling when testing suggests that the water has the same chemistry after drilling as it had before gas drilling?” While I received several comments, I hope to get a few more before I post my follow-up blog entry on the topic. Since the Katz School is co-hosting a session on “Thought Leadership in the Shale Gas Industry” on June 20, 2012, I expect to draft the follow-up piece before the end of June. The energy economy is growing in western Pennsylvania. It has much promise to aid the economy. But any issues and concerns people have about gas drilling and the practices of gas companies will not magically disappear.  Feel free to let your voice be heard through a comment on my blog question. Thanks!

Each year, as part of my duties, I meet with Pitt alumni at various events in many locations.  (In 2012, so far, I’ve met alumni in Chicago, Las Vegas, Los Angeles, San Francisco, Charlotte, West Palm Beach, Ft. Lauderdale, Naples, Sao Paulo Brazil, San Diego, Newport Beach, Washington, DC, and Pittsburgh.) It is not unusual in those meetings for one of our graduates to mention a professor who was especially helpful in one way or another. The conversation may reflect on the value provided by the lessons, time, or advice of a professor who cared.  Depending on the age of an alumnus, the name of the faculty member differs. But the same names emerge for certain time periods. The names are remembered – usually fondly – for the interest, encouragement, and help that was provided. Stories arise in different contexts. A few years ago, George Davidson, former Chairman of Dominion Resources, member of the Katz/CBA Board of Visitors, and strong supporter of the school, remarked in a commencement address that his career was critically shaped by the advice of a faculty member who steered him in the right direction at a time when jobs were scarce.  By following the advice, a wonderful and successful career was created. 

It is fitting during the graduation season to devote this entry to some lessons given by distinguished faculty who will be remembered by students. I am sure they will be remembered because they have won many teaching awards, including the 2012 Katz and CBA Teacher of the Year awards.  On the CBA side, Shawn Thomas, a finance professor won two awards and Elise Boyas, an accounting professor, ran away with three teaching awards. At the MBA level, Professor Boyas received the PT MBA Best Teacher award and Prakash Mirchandani, who teaches operations, supply chain, and decision sciences, won his 10th MBA Best Teacher award.  Professor Mirchandani also won the University’s highest teaching award this year – the Chancellor’s Distinguished Teaching Award. 

Because of the success that these professors have experienced in the classroom, as well as the obvious enjoyment they get from teaching and interacting with students, I asked them to provide a few words of wisdom and guidance that this year’s graduates might take to heart. Not surprisingly, each of these award-winning professors focused in one way or another on the fact that our students are capable of competing with anyone and the importance of working hard and never giving up.  Here are their words:

Professor Prakash Mirchandani:

“As you step into the next phase of your career—for some of you, into a new, uncertain, environment—I am sure you are excited on the one hand and somewhat apprehensive on the other.  How will the first project turn out?  How will the first client meeting pan out?  Will the first presentation to the top management go well?  All these are understandable concerns.  As you negotiate your way through these situations, know that you have what it takes to pragmatically and creatively apply the resources that Pitt has equipped you with. The intellectual energy imbibed at Pitt will prove be a springboard for future successes.  You have survived the rigor of a challenging academic environment and have dealt with the recent real-life security crisis.  This demonstrates the resilience needed to reach a high level of excellence in your future endeavors.  My advice to you would be to cultivate and hone this ability to be resilient.

The second piece of advice I would like to offer is to make passion a galvanizing force in your life’s work.  This will ensure a better quality of life for you.  If complacency ever sets in, break the IAKI barrier!  The barrier, “I already know it,” can stealthily destroy your motivation to grow and strive.  Having an open mind, questioning past assumptions and conclusions, and embracing change together make a heady cocktail; enjoy it and it will help you achieve greater heights.

Good Luck!”

Professor Elise Boyas:

“You may think that you have just finished your education but, in reality, your education is just beginning. Today’s work environments are more fluid and challenging than ever and it is important to frequently re-evaluate your short and long term career goals and to update your skill set on a regular basis.  This will help you to be not just a competitive candidate for new opportunities, but the best candidate. And, along the way, remember to treat everyone with the same respect you would like to command. It just makes everything so much more pleasant!”

Professor Shawn Thomas:

“Oftentimes recent graduates quickly encounter situations that appear novel and quite complex relative to what is covered in their coursework.  I advise students to approach these situations by seeking to relate the substantive elements of these situations to the foundational knowledge they obtained in their courses.  For instance, a graduating student approached me after this year’s commencement address by Hoddy Hanna in which Hoddy described Howard Hanna Real Estate Services’ decision to start offering money back guarantees to home buyers that purchased homes through the firm.  The student indicated that he was a bit unclear as to how one might develop an analysis on which to base such a decision.  With just the slightest prompt from me, the student quickly came to the realization that the money back guarantees were very similar to put options, instruments which he had studied in several finance courses.  He then recounted to me the framework in which such instruments are valued, the factors which affect the obtained values, etc.  Thus, it quickly became obvious to the student that he could indeed likely create a well-structured analysis of just the sort that he initially ascertained might exceed his capabilities.  It has been my experience that our students are often a lot better prepared than even they realize.” 

Someday, a future dean of Katz/CBA will meet with alumni and hear stories about the help that Prakash, Elise, or Shawn provided. I also suspect that our 2012 graduates who take the advice noted above will report that it worked.  On behalf of all the faculty at the school, I wish our graduates much success. You are ready to achieve your aspirations. Good luck and Hail to Pitt!

One of the persistent developments of the past half century has been the expansion of self-service options by organizations. Financial institutions, airlines, hotels, gas stations, grocery stores, and many other organizations have replaced employees and passed work to customers.  People accepted the change to self-service because it offered more convenience (e.g., booking your air ticket online anytime) and in some instances lower costs and a better customer experience. Businesses leveraged new technologies to accomplish simultaneous cost savings and customer satisfaction. 

Higher education has faced many of the same cost pressures as other industries in recent years. While universities have adopted technology to enhance the student experience and replaced some tenure stream faculty with contract or adjunct faculty, they have not widely embraced self-service lanes in higher education. This is a mistake for three reasons.

First, students are increasingly coming to college with exposure to significant use of technology in high school and life.  Our students have experienced dramatic changes in the way education is provided, including instances where lectures are online and class time is devoted to application and discussion. Universities can only ignore student preferences for so long.  Witness changes in dorm life and college food from the 1950s to today.  Schools that ignore student preferences may attract fewer students (or less qualified students). Although faculty members enjoy debating the idea of whether or not students are customers, the educational system has already told them they are.

Second, cost pressures will continue to destabilize higher education, especially public universities. Those pressures will lead to a continuation of the very trend decried by higher education unions and some faculty – namely, the general substitution of tenure stream faculty with adjuncts or others. Cost concerns will lead to other changes.  For example, some schools have chosen to enroll international students in increasing numbers – because those students pay the most tuition. This is a short term solution at best because there is no escape from the cost problem, especially given the price of college tuition relative to median family income in the U.S. Even international students will resist tuition levels that exceed some point – economics teaches us that demand curves are downward sloping.

Third, government regulations will increasingly allow students to take alternate routes to their degree.  For example, articulation agreements with community colleges require many public universities to accept students who complete successfully a certain program of study or accept for transfer credit courses that have been deemed equivalent to ones universities offer. This gives students a lower cost route to a college degree and many more are taking that path to save money. It will continue to lead students to substitute community college and approved online courses for traditional university courses.

Educators are constantly trying to ensure that students receive a high quality education – one that prepares them for employment and successful citizenship. Some resistance to online education stems from concerns that it does not adequately prepare the typical student for future opportunities. Rather than view online education so broadly, it is appropriate to look at it as a college self-service lane. Like all self-service lanes, it is not ideal for everyone. And it is not ideal in every situation. But a college education requires individual studying and learning, which means that the educational process contains some inherent self-service aspects.   

It is time for universities to adopt self-service lanes to give students the flexibility they seek while reducing some costs. The approach has potential. For example, students currently need to invest in their education to be successful.  They must study, produce papers and projects, and meet faculty expectations. They are on a path to self-service outcomes. The path could be structured to emphasize in-person lectures less and applications more. By making the lecture less central to education through online accessibility or blended approaches, in-class learning will become more intense. This by the way preserves a central faculty role, though it creates a very different college and learning environment. Faculty members become more like consultants – they facilitate learning by leading apprentices and showing how concepts and theories make a difference in the real world.

Although the expansion of self-service lanes may be frightening to faculty – because of the required changes needed and the time that must be invested – it will be impossible to stop the continuing drift of students to self-service approaches. For example, they use Wikipedia and other online information sources to answer their questions. This affects the faculty role in the same way that availability of databases on benefits, personnel policies, and organizational rules affected the jobs of human resource managers. To many students, professors are no longer the only (or most valuable) “source” of information. And this is not a bad outcome to the extent that it allows professors to spend more time facilitating interactions based on exposure to the basic information.  

Universities focusing on online programs, especially for-profits, are increasingly positioned to take advantage of students’ preferences for self-service education. Because technology alone does not guarantee quality educational outcomes, there is time and room for professors at research universities to leverage online content. Indeed the challenge for professors is to embrace technology tools in ways that generate intense educational experiences for students.

Instead of assuming that a self-service lane in higher education is unequivocally bad, we should find ways to use technology to enhance educational outcomes. Self-service lanes could combine a cost advantage for students with elements of quality higher education that a research faculty would celebrate. The lanes must be designed to give students the skills we (and prospective employers) regularly advocate: for example, critical thinking; writing; platform skills, and the ability to work in teams. Our large in-person lecture-based professor-centered approach is less and less able to meet students’ expectations. Just as many people prefer to make their own airline reservations, bag their groceries, or stop at an ATM instead of a bank branch, many of our students desire self-service lanes.

Business schools are ideally equipped to develop the self-service market.  We have already created a variety of programs for deliberately segmented markets. We leverage executive programs to generate revenue. We face more consumer viewpoints than other schools (judging by the sheer number of B-school rankings we face each year). While we are perfectly suited to test the new self-service waters, even business schools have moved reluctantly here. The main reason is that faculty must change what they do to leverage and enhance self-service lanes.  Many of our top professors have not concluded that there is reason to make the adjustments.  This will change.  In particular, I am confident that B-school professors understand that you must accept the pressure of the market or be crushed by it.