Training future economic crisis managers: a relevant challenge for MBAs

By Matthias de Larminat, Global MBA student 2012-2013, France

Crises, be they economic, financial, health, or security related often require that we find innovative, concrete and quick solutions. The emergency acts as a booster to change. In extreme situations, such as facing hurricane Katrina in Florida or systemic financial failure, given the stakes, transformation becomes a vital necessity. Facing the ultimate crisis, there are obviously no more written rules; it is easy to go out of the box given that as standard answers become totally irrelevant, all assumptions and rules run out of scope.

Because of this, one could question the relevance of an MBA, which provides standard training. In other words, should we change the business leaders given the natural bias of reproduction and risk avoidance?

Indeed, one must acknowledge that the current economic and financial crisis look like a storm and tsunami combined, defeating icons of a certain world such as Lehman Brothers. During this time, no Churchill has emerged to save the old world from collapse. Europe seems unglued in recession without a clear roadmap. Military history illustrates that very often, war times start with the replacement of peace time military hierarchy by a real war lord. Why should it be different for business? Can we really train at the same time and in the same way leaders for growth times and for crisis periods?

Crisis times, characterized by high uncertainty, high-risk and a fast-moving environment, necessitate atypical profiles, with a vision fueled by strong character and values. Of course academic knowledge is still a requisite, but it is just the first level of the pyramid. Some voices advocate for a strong update of current MBA foundations in order to avoid reproducing the Western way of doing business. ESSEC’s recently launched Global MBA has taken this road by focusing on unusual courses such as sustainability and incorporating immersion in emerging areas, which enables students to integrate best practices and lessons learned from alternate and successful models.

However, going deeper in the analysis, economic growth is highly cyclical, never linear.  As a result, wherever future international managers will work, they will face crisis and slowdown. They should be trained to face it. In this way it is striking to see that traditional MBA literature is mainly focused on growth and expansion strategy, and that few books, few courses and little  training is designed to address strategies for times of crisis.

Doubtless, this gap will be rapidly filled, integrating takeaways from current and past bankruptcies or failures. It is not pessimistic to anticipate strategies for bad weather; it is simply the principle of reality! Driving in bad, windy and rainy weather is always more challenging. Our world has an urgent need for drivers to weather the storm!