For decades, MBA graduates from top-tier schools set the standard for cutting-edge business knowledge and skills. Now the business world has changed, say the authors of Rethinking the MBA -- Srikant M. Datar, David A. Garvin, and Patrick G. Cullen -- and MBA programs must change with it. Increasingly, managers and recruiters are questioning conventional business education.

An interview with David Garvin discussing his book "Rethinkging the MBA."
 

To be competitive, companies must grow innovative new businesses. Corporate entrepreneurship, however, isn't easy. New ventures face innumerable barriers and seldom mesh smoothly with well-established systems, processes, and cultures. Nonetheless, success requires a balance of old and new organizational traits--and unless companies keep those opposing forces in equilibrium, their new businesses will flounder. The authors describe the challenges companies face when they pursue new businesses, as well as the usual problematic responses to those challenges. Such companies, they say, must perform three balancing acts: 1) Develop strategy by trial and error, which includes narrowing potential choices, learning from small samples, using prototypes to test business models, tracking progress through nonfinancial measures, and knowing how and when to pull the plug on a new venture; 2) Find the best combination of old and new operational processes by staffing new ventures with "mature turks," changing veterans' thinking, knowing which capabilities to develop and which to acquire, and having old and new businesses share responsibility for operating decisions; 3) Strike the right balance of integration and autonomy by assigning both corporate and operating sponsors to new ventures, establishing criteria for handoffs to existing divisions, and using creative organizational structures. The authors provide a detailed look at IBM's Emerging Business Opportunity system, which manages all these balancing acts simultaneously.

Most executives think of decision making as a singular event that occurs at a particular point in time. In reality, though, decision making is a process fraught with power plays, politics, personal nuances, and institutional history. Leaders who recognize this make far better decisions than those who persevere in the fantasy that decisions are events they alone control. That said, some decision making processes are far more effective than others. Most often, participants use an advocacy process, possibly the least productive way to get things done. They view decision making as a contest, arguing passionately for their preferred solutions, presenting information selectively, withholding relevant conflicting data so they can make a convincing case, and standing firm against opposition. Much more powerful is an inquiry process, in which people consider a variety of options and work together to discover the best solution. Moving from advocacy to inquiry requires careful attention to three critical factors: fostering constructive, rather than personal, conflict; making sure everyone knows that their viewpoints are given serious consideration even if they are not ultimately accepted; and knowing when to bring deliberations to a close. The authors discuss in detail strategies for moving from an advocacy to an inquiry process, as well as for fostering productive conflict, true consideration, and timely closure. And they offer a framework for assessing the effectiveness of your process while you're still in the middle of it. Decision making is a job that lies at the very heart of leadership and one that requires a genius for balance: the ability to embrace the divergence that may characterize early discussions and to forge the unity needed for effective implementation.

Garvin argues that at the heart of organizational learning lies a set of processes that can be designed, deployed, and led. He starts by describing the basic steps in every learning process-acquiring, interpreting, and applying knowledge—then examines the critical challenges facing managers at each of these stages and the various ways the challenges can be met. Drawing on decades of scholarship and a wealth of examples from a wide range of fields, Garvin next introduces three modes of learning—intelligence gathering, experience, and experimentation—and shows how each mode is most effectively deployed. These approaches are brought to life in complete, richly detailed case studies of learning in action at organizations such as Xerox, L. L. Bean, the U. S. Army, and GE. The book concludes with a discussion of the leadership role that senior executives must play to make learning a day-to-day reality in their organizations..