"I hope no one ever finds out about this framework.", said an e-mail memo to me from an executive education director from a tier one business school. He sent me this e-mail in response to a document I sent him describing how to fix a major problem he was facing.

What was the problem? It was the problem of ineffective learning.

According to research, when people participate in traditional learning programs, they forget 80% of what they learn and can apply less than half of what they do remember . Business schools are not exempt from this problem. Most business education is wasted. A study performed by a tier one business school showed that 95% of executive education participants couldn’t even remember the subject of their studies just six months after the program end.

The document I sent to the abovementioned school outlined the fix and showed how their learning programs can improve. I didn’t make it up. It was compiled from a number of studies performed over five decades and proved in a number of corporate universities. Essentially, I sent him a manual listing best practices for running an effective learning program. I didn’t charge him for the manual. I was simply fulfilling the mission of my organization – to improve the way the world learns.

But his response didn’t shock me. I’ve received lots of similar responses from other business schools. Most of them fall into one of the two categories:

"We’ve been doing it our way for over 100 years. If we change now, our customers will wonder why we’ve been doing it wrong all this time!"

"We generate millions in annual revenue doing it the old way. Why would we change and risk losing it all? The old way sells."

A reasonable person would think that universities are providers of education. But comments above cast doubt on this assumption. In fact, statements above confirm one scary fact - universities turned into for-profit companies and focus on revenue generation rather than improving the quality of education.

Have we uncovered a secret? Is this a plot against students? I’m afraid not. It’s not a plot. It’s unawareness. University professors and administrators simply take the existing system for granted. An executive education representative commented the following about her tenure at Wharton, one of the world’s top business schools:

"Executive education folks at Wharton think they are good at program design and delivery. This belief comes from the fact that their phone is always off the hook and customers are always knocking on their door. The truth is, customers don’t buy their programs. They buy the Wharton brand. No one gets fired for buying from Wharton."

But Wharton isn’t the only one. In his book "Managers, Not MBAs", Henry Mintzberg presents a great review of management education and argues that all business schools are mere copycats of Harvard. The unawareness we just talked about is common to all business schools. The scary thing is that business schools aren’t even cognizant of what it is they are copying. Let’s go back in history for a second. Harvard’s first MBA program was designed in 1908. It was based on what Harvard believed was right at the time – learning process optimization in the manufacturing and retail environment. It was first created as a test, with an intent to improve or change the program once Harvard understands the industry needs better. The context of business had changed several times in the past 100 years, most recently with the arrival of knowledge workers. Yet, Harvard still teaches the same old program, way out of context of today’s world. Not surprisingly, Mintzberg questions whether it was ever developed in context, showing that it didn’t make sense in 1908 either. In fact, it was a test that never got improved! He further argues that traditional MBA programs teach the wrong people using the wrong ways with the wrong intended consequences.

Food for thought

It can get even worse. Years ago, I used to be a member of the Academy of Management and I received e-mails from professors from around the world asking their peers for help. I am not a professor, but I liked to monitor these e-mails so I can learn more about management education. Here’s one shocking e-mail I received:


I was asked to teach a course on [the subject]. The first class is tomorrow. I don’t know this subject and I’ve never taught it before. Can someone send me the syllabus, materials, or anything else you can as soon as possible.

Thank you!

[Professor’s name]

Why should this professor teach the subject if he doesn’t know it? What’s even more shocking is that a number of people responded to him with materials. Further correspondence told me that this is a norm, not an exception from the rule.

Let me rephrase what Mintzberg concluded in his study. Harvard created a pilot program over 100 years ago, never really improved it, and still sells it today. Other universities copied it exactly and sell it the same exact way. Everyone believes it’s the best program in the world because Harvard created it. No one questions Harvard. Ever! Even 100 years later!

Harvard and the copycats make up the world of status quo.

Unfortunately people like status quo. Business schools are happy because status quo brings them revenue. Students are happy because they believe business schools will help them get that first job or get promoted on their current job quickly.

Fortunately, however, many successful corporate universities understand the issue of learning ineffectiveness and try to do something about it. Some head in the right direction but still copy Harvards of the world. Others perform a complete 180 degree turn and go in the opposite direction. This world of status quo is cruel. Every year business schools around the world release 150,000 newly minted MBAs ready to take over the world. They believe that the 20% they remember from their basic finance or strategy courses qualify them to take top positions in Wall Street or management consulting firms. Unaware of the enormous risk and the high ratio of confidence to competence , companies snatch these MBAs and place them in organizations according to the Peter Principle . Everyone gets hurt as a result. Companies get hurt when the newly hired employees make mistakes. MBAs get hurt in two ways. The lucky ones get hurt when they find out how much their MBA investment is really worth. Fortunately they do something about it. The unlucky ones never find out the truth and spend their lives trying to get to the level of competence they perceive they have. Then corporate learning and development people get involved. They are determined to help these employees develop, so they send them to business schools and third party management development programs, the same entities that failed to develop them in the first place. I call this process the cycle of confusion.

Fortunately, many organizations recognize this cycle of confusion and get out of it by developing internal training programs. While these programs may be more effective than those offered by business schools, many of them aren’t much different from status quo. In fact, most of them offer only slight improvements, if any, over traditional programs.

That's right. The world of status quo does not end in business schools. It starts there. It then spreads like cancer into every organization. Every company has MBAs. Every organization largely copies business schools and traditional universities in program design. Companies deliver training that doesn’t stick or cannot easily be applied. As a result, companies waste training dollars.

The bottom line is that most corporate universities are highly ineffective.