Last month, I attended the AACSB annual meeting in San Diego. The event is typically informative and this year was no exception. From the sessions to the informal conversations with other deans and B-school leaders, I reached four interesting conclusions about the future of business education.

First, there was substantial discussion of the coming tsunami of online education. The subtext was that technology has dramatically affected most industries and yet education, including b-schools, still operates using a model that our 19^th century colleagues would easily recognize.  While we may use whiteboards instead of chalkboards, our classrooms are designed to allow a professor to be at the center of attention for our students.  Everyone on stage and in the audience agreed that technology was going to swamp traditional models. Everyone also seemed to agree that b-schools were not ready for the coming change – especially faculty. Since I discussed the issue of online education in an earlier post – via the vehicle of self-service lines – there is no need for elaboration here.

Surprisingly, few suggestions were made as to how the lack of preparation would be remedied. There was reference to the few top schools that had started online programs (e.g., Indiana and North Carolina). But the deans played their cards close to the vest. Either there is indecisiveness on how to proceed, no clue as to what to do, or a belief that the online revolution would swamp some other dean’s b-school. I don’t know what other deans are thinking. I expect that this phenomenon is going to emerge, though it is not clear that it will do so in a tsunami. Instead, I expect flooding to occur in different places first and over time to expand and affect B-schools more broadly.

Second, in the face of the technology challenge, as well as budget constraints, enrollment issues, growing competition, and other factors, it was interesting to hear dean after dean (and speaker after speaker) identify the same general strategy to the future. The strategy included development of specialized masters programs, improvement in the core MBA programs, creation of joint MBA options, enhanced executive education, and growth of the undergraduate business program.  Since everyone sought to differentiate his/her school through this strategy, I wondered exactly what was going to be said when the existing problems persisted because everyone was adjusting in the same way.

Schools with resources were likely going to have an easier time managing the strategy. But otherwise, B-schools were not going to achieve much differentiation from the commonly discussed strategy. Of course, deans may have been unwilling to reveal the underlying approach they planned to take. On the other hand, the lack of an obvious breakthrough strategy may be causing reluctance across schools (deans) to follow a different path – at least until something new and replicable is obvious.

Third, discussions about the first two issues revealed that most deans perceived the faculty to be a barrier to new strategies and that schools adopted policies to buy the faculty off in order to generate new approaches. I was somewhat surprised by this as the tactic was mentioned by deans at very highly regarded and unknown schools alike. In addition, unionized and nonunion faculty were lumped into the same pile.

I inferred from this skepticism of faculty an underlying pessimism about where business (higher) education was headed. Success in our competitive environment will require all constituents of a B-school to work together towards common goals.  Even the richest school would run out of money if the faculty required payoffs to follow an approach dictated by changing currents in our industry. I doubt that progress will be made in B-schools where the faculty lack trust in the efforts of the administration. I also doubt that progress will be made where drastic adjustments are imposed to address problems that are only half in bloom.

Fourth, the efforts of AACSB to adjust accreditation processes to fit the needs of a broader set of institutions and an increasing number of schools outside of the U.S. has caused frictions that are not fully resolved. I wondered whether the result of this would be more rigidity in the accreditation process at a time when flexibility is needed. While the notion of mission-driven accreditation suggests I may be over-interpreting the problem, there was little common understanding of some issues by a broad and diverse set of deans, including many who will be responsible for implementing the standards.

Overall, there are considerable opportunities for B-schools that execute effectively and accept the reality that education is changing (and must change). There are few easy fixes available and much evidence that long term approaches are needed. Of course, this conflicts with the reality that the tenure of deans is shrinking and the fact that our institutions often hire outsiders to lead a school.  (I was an outsider when I arrived six years ago.)

The lesson I take from these inferences is that it is necessary to work collaboratively and deliberately with faculty to develop a better school. If skepticism exists in other places, congruency will help us improve and thrive. If our operating model reflects a shared understanding of the nature of our business and how a school can leverage that understanding, then it will be possible to succeed. We must all accept that the golden age of business schools is over. And the emerging age will be less kind and stable. It is a perfect time for new approaches, especially ones leveraging technology and optimizing faculty skills. Our new age will be a faculty age if our faculty embraces the skills expected by our students and recruiters. Otherwise, it will be a difficult time – and much worse than today.

I co-hosted an event in Washington DC last month with Pitt Law Dean Mary Crossley. It was an enjoyable event and gave me a chance to connect with several Katz and CBA alumni.  I had a wonderful conversation with V. Nona Ogunsula, a Katz EMBA grad and consultant who has built a great blog and website on leadership for women and minorities. (See her work at  www.womenatliberty.com.)  Nona and I met prior to the alumni brunch.  Our conversation caused me to think about an issue that is concerning for business schools:  Why do we have difficulty enrolling women students in MBA programs? Whereas women make up half or more of the students in many professional programs, they typically comprise one-third or less of MBA enrollments.  

In the past, this was a curiosity that received attention in a variety of ways (e.g., programs aimed at increasing female representation in select B-Schools).  It is really the tip of an iceberg that may pose significant problems for B-Schools, however, given the gender composition of college enrollments today.  Specifically, in each year since 1988, according to the National Center for Educational Statistics, women have comprised more than half the enrollment in post-secondary education. In 2010, for example, women earned 62% of the Associate’s Degrees, 57% of the Bachelor’s Degrees, 60% of the Master’s Degrees, and 52% of the Doctoral Degrees awarded by U.S. Universities. That same year, graduation rates for women (4-year, 5-year, and 6-year) were higher than comparable graduation rates for men. And projections suggest that this wave of female dominance in higher education was going to grow even deeper in the future.

The wave is propelled by evidence that high school women are more likely to report an intention to secure a college degree today than are high school men. And other trends suggest that women are investing more than men in high school activities that will enhance their employability. For example, in 2010, a higher percentage of female than male students participated in all outside of class activities (e.g., newspaper/yearbook, music/performing arts, student council/government, other clubs/activities) except athletics.

Because women comprise a growing and dominant segment of college students and graduates, the inability of B-Schools to recruit women poses a serious problem for our enrollments and future resources.

Selected overall U.S. educational statistics illustrate the problem. The growing pool of female students favors areas of study other than business. The Condition of Education in 2012 reports that women are enrolled in high percentages in the health professions (81.4% of Master’s Degrees in the health professions went to women in 2009-2010), education (77.3%), public administration (75.2%), and several other fields than they are in business (45.6%). Engineering (22.4%) is one of the few fields with a larger gender gap than business.  But even these data are a bit misleading. 

Table 1 was constructed from data supplied by B-Schools to Bloomberg Businessweek (BW) in 2011 as part of the MBA program ranking process. Whereas the U.S. government statistics suggest that women comprised about 46% of MBA students, Table 1 indicates that less than one-third of the MBA students in BW’s top 57 MBA programs were women. In addition, only 30% of the applications to those programs came from women. The reconciliation of the U.S. government data on educational attainment and BW data suggests that women MBA students must be enrolled primarily in lower-ranked schools. This inference is reinforced by data indicating that the percentage of female students is higher in for-profit B-Schools than in nonprofit (public and private) B-Schools.  

Table 1:  MBA Applications and Female Composition by B-School Ranking in 2011

Table 1 also suggests that B-Schools employ female faculty in about the same ratio as they educate female students. Moreover, since the faculty measure is likely influenced by the inclusion of larger percentages of women faculty outside of the tenure stream, the statistic is biased upwards. If data on tenured faculty were used, the percentage of women would inevitably be lower.

Data collected from other professional associations indicated somewhat lower female enrollments than the general government statistics, but confirmed that women were underrepresented in B-Schools. For example, recent data from relevant associations of professional schools reported the percentage of female students in medical school (47%), law school (44%), veterinary medical school (87%), pharmacy school (62%), and optometry school (64%) was greater than the percentage of female B-School students.

The patterns suggest what could be a great problem for B-Schools. At a time when women comprise a growing and dominant share of those enrolled in post-secondary education, B-Schools are not attracting female applicants – at least in the same way other professional schools are attracting women.   

The lack of attraction problem could be due to a wide variety of factors. Perhaps women are discouraged by evidence of a glass ceiling on their opportunities.  For example, according to the U.S. Department of Labor, in 2010, about 59% of women were in the labor force and women comprised about 47% of the total U.S. labor force. At the same time, less than 5% of CEOs of Fortune 500 companies were female, about 15% of top management positions in large companies were held by women, and about 12% of the directors of public companies were female.

It’s also possible that women are discouraged by evidence of an earnings gap relative to men. While this issue gets media attention every year when company proxy statements are examined, U.S. Department of Labor data suggest that the pay disparity is across fields. That is, data for 2010 indicated that the median earnings of young adult males were higher than the median earnings of young adult females at every education level. Other research suggests that the pay gap exists across fields.  Such evidence may discourage women from entering B-School, though it is unclear why.

There are a variety of explanations for the pay disparity data. Linda Babcock, an economics professor at Carnegie Mellon University, just up the street from Pitt, suggests that “women don’t ask.”  My characterization is a simplistic interpretation of her work, but the underlying point is that women are less likely on average than men to ask for more (money, rank, etc.) and as a result they get less. An interesting March 2011 paper by George-Levi Gayle, Limor Golan and Robert Miller, colleagues of Babcock at CMU, provides an interesting analysis of matched-sample data to address this issue. Among other things, they conclude that one explanation of the pay gap is that women exit organizations more than men and in business, top positions are given to those who stay.  This of course, reinforces the view that women are discouraged from pursuing (or staying in) business, which helps explain the gap in B-School enrollment.

Another potential explanation for women’s educational and occupational choices is that women prefer to enter “helping” professions or occupations in which they can make society better. This hypothesis suggests that women choose to be lawyers, teachers, doctors, etc. to make a difference. It also suggests that business is perceived to be a profession aimed at helping oneself instead of helping others.

The data and trends are further confused by evidence suggesting that women are more likely to start a business than are men. Given the proclivity to start businesses, why would women eschew MBA or other business degrees? 

I am unwilling to believe that the answer to the paradoxes above is related to the ability of women relative to the ability of men. It may be affected by preferences. It may also be affected by expectations that women are supposed to perform household tasks.  Research indicates that women engage in many more hours of household labor than do men.

So, I invite readers to comment on what explains these patterns of female behavior. And my interest is more than cursory. In the future, if B-Schools cannot ascertain how to attract and enroll more women, we will be much less relevant to business and society.