The Days of the Classic MBA Are Numbered

VedomostiLorange says his ideas are a threat to the dominance of American schools.

Former IMD president Peter Lorange sparked a revolution in the world of MBAs, turning a commercial business school into one of the best by contrasting it with universities’ programs. Now he thinks it’s time to get rid of diplomas altogether.

It took Professor Lorange’s ancient ancestors, the vikings, more than three centuries to conquer Europe and leave their mark on its history. A viking, according to famed researcher Fritz Askeberg, is above all a person who has broken from the traditional way of life and left his home. Lorange has had a dizzying career in the traditional world of university business schools, and in just 15 years he managed to surpass many of them in the global ratings.

Now he wants to turn their world upside down and take the lead for good. Peter Lorange explained in an interview with Vedomosti how this will happen and how long it will take.

When you stepped down as IMD president [in the spring of 2008], you were planning to do research work. Recently, you were in Moscow on business for your school and the global alliance of management schools you’ve created. What’s changed since then?

Later this year Cambridge University Press will release my new book, “Shipping Strategy,” which is about how to manage companies during a crisis. So, I’m still busy with research. I want this book to help people understand that there isn’t any crisis, and that business is cyclical. Indeed, this is the best time for innovation, which is why I accepted an offer to buy GSBA Zurich from its founder and owner, Albert Stähli, when I left IMD.

The future of business education has been one of the hottest topics of discussion during the crisis. What sort of changes are needed?

All businesses need constant renewal, and you can’t find a much more conservative sector than universities. Many teachers have gotten out of the habit of listening and have locked themselves up with their research. First and foremost, it’s time to ask companies about their problems and then find the right professors. As a rule, clients are now offered a course of study, which is formed from the list of classes and teachers the business school already has.

When you bought GSBA Zurich, a relatively unknown management school, you wanted to turn it into a world leader like you once did with IMD. How?

A True Norwegian

Lorange has lived alone for many years. His wife died of cancer and his grown children live on their own.

He enjoys downhill skiing, “like a true Norwegian,” but isn’t a fan of the extreme. He has a chalet in the Swiss Alps, but as a rule he spends his vacation in southern Norway, where he, his mother and two sisters have a small fishing cottage. “Spending time with my family is really important. I spend a lot of time on business in other countries, and I really don’t get enough of it.”

1943

Born April 17 in Norway. Studied at the Norwegian School of Economics and Business Administration. Continued his education at Yale and Harvard. 

1973-1993

President of the Norwegian School of Management in Oslo, professor at MIT’s Sloan School of Management, IMEDE (now IMD) and the Stockholm School of Economics.

1993-2008

President of IMD. During his tenure, the business became world-renowned as a center to train senior managers.

2009

Bought the business school GSBA Zurich, created and became president of the WEEA.

Author of 18 books, including on strategy for running educational institutions.

My fundamental idea is that the future belongs to modular and evening programs for adults, both nondegree executive education and with degrees [EMBA, Global MBA]. The past few years, more and more people who pass the GMAT are choosing things other than full-time MBA programs. I’m certain that the days of the full-time MBA are numbered. No one really needs academic knowledge or diplomas anymore. Experience is much more important.

A small management school like GSBA Zurich has all the prerequisites to become a world leader in corporate education and training programs. It’s an unusual school, with 65 professors — all without tenure — giving lectures and doing research through the living case method. The system involves students solving the real problems of companies, which need help from a consultant. The solution is defended in front of the company’s top managers.

How far along is the World Executive Education Alliance?

Last December, five management schools from different continents united under the program, which is tentatively being called the World Exec. MBA. They are national leaders in the market of short-term programs for managers. From Russia, we have the Moscow International Higher Business School, or Mirbis, one of the oldest and most established business schools. Students at any of the partners will receive a World Exec. MBA degree from their school by taking two-week courses on various subjects and doing “live case” work at all of the alliance’s schools. IMD uses a similar modular scheme, where top managers can choose one course, and then choose several more, ultimately converting them into an EMBA degree.

The project is still at the experimental stage. We’re in talks with the University of Chicago Booth School of Business and Wharton. It’s important that we find partners in the United States and Asia. For now, the alliance is discussing admissions policy, professors and topics for live cases.

The alliance seems similar to Duke University’s global partnership.

Duke’s main partner is Duke. Life has made me a dedicated minimalist when it comes to organizational structure. Firms with horizontal, network structures see the best growth. There is very little hierarchy at IMD, and there will be even less in the alliance we’re creating. For us, everyone is equal.

GBSA Zurich and several other members of the alliance do not have the highest accreditation level. Will that be an obstacle to the project?

Two of the alliance’s five schools have the accreditation, including the Russian business school, Mirbis. We need to receive accreditation, and we will. I’m using all of my influence, including with the accrediting organizations at which I’m in the management. Though personally, I think the accreditation system was out-of-date 15 years ago. American universities’ business schools think they’re the only ones setting trends, and that the rest of the world should copy them. The experience of IMD and Insead, both independent, shows that business schools aren’t such a select club anymore. My ideas are a threat to the American schools. But they can’t get in my way — I have six honorary doctorate degrees from various business schools.

The biggest problem is skepticism from alliance members. It’s really a matter of understanding that only a global partnership can push the Americans out of the driver’s seat. Wait three or four years.