Three lessons from teaching MBAs in 2014

Use longer, content-heavier handouts; integrate local and up-to-date content; and show numbers and math.

Change 1: Longer and content-heavier handouts

The only significant complaint from previous cohorts was regarding the lack of a textbook. I post a selection of materials to the course support intranet (consultancy reports, managerial articles, academic papers, book chapters), but a few students always remark on the lack of a unifying text for the class.

(There's no unifying text because -- in my never humble opinion -- most Consumer Behavior textbooks are written from a consumer psychology point of view, while I prefer a more marketing engineering point of view.)

Taking that into consideration, I made longer, denser handouts, each like a book chapter rather than just support for in-class activities. The class is participant-centered, with minimal lecturing, so these longer handouts help students feel that they have a coherent framework to fall back on.

Handouts changed from a median size of four pages of mostly diagrams, in 2012, to a median size of eighteen pages of text, diagrams, and numbers, in 2014. (Just a reminder, since there's some confusion about it, that handouts and slides serve different purposes.)

Change 2: More local content

I used local content in most class sessions: local products, merchandizing from local retailers, and examples from local advertising. In particular, using outdoors from around the campus allowed students to recognize their location, for a little a-ha moment that improves mood.

The main advantage of local content is student familiarity with it. Examples are more effective when students don't have to learn new brands, new product categories, and other regional differences. A disadvantage is additional preparation work, but that work also signals to the students the instructor's commitment to the class.

A secondary advantage of local content is as evidence of instructor competence. Local content, and up-to-date content, requires confidence, ability, and practice. For this reason alone, it's worth the additional work, even if old or foreign examples would be equally good for teaching.

Change 3: More numerical content

The rise of analytics is a highly visible trend in marketing; marketing courses are therefore increasingly quantitative. Still, most Consumer Behavior courses shy away from math.

Our course was different: there were plenty of numbers and models. I did most of the work, not the students, since the objective was not to teach them analytics; but I did do the work, so the students were shown modern marketing techniques rather than a lot of hand-waving.

For example, to illustrate the effects of memory on different types of advertising timing, I used a computer simulation of a learning model: instead of rules-of-thumb for media planning, students saw how learning and forgetting rates change the effectiveness of blitz versus pulsing media timing.

(References to technical materials were provided for students wishing to learn more, of course.)

Results

Despite objectively covering more material than before and using harder assessment measures, student grades were higher. In other words, these changes achieved their primary objective: students learned more material and learned it better.

Class dynamics were better than before, though they were pretty good in previous years. When I pick up my teaching evals in 2016 (they're on paper), I'll know whether I kept my top-5 ranking from 2012.

Addendum:  In short events since the MBA class, I replicated these three changes, yielding performance improvements along all dimensions: participant learning (as measured by in-event exercises), participant experience (as measured by client-run event evaluations), follow up contact with the participants, and word-of-mouth.

Math in business courses: derivating + grokking

I used to start my Product Management class with a couple of business math problems like the following: let's say we use a given market research technique to measure the value of a product; call the product $i$ and the value $v(i)$. We know -- by choice of the technique -- that the probability that the customer will buy $i$ is given by

$\Pr(i) = \frac{\exp(v(i))}{1 + \exp(v(i))}$.

My question: is this an increasing or a decreasing function of the $v(i)$?

Typically this exercise divided students in three groups:

First, students who were afraid of math, were looking for easy credits, or otherwise unprepared for the work in the class. These math problems made sure students knew what they were getting into.

Second, students who could do the math, either by plug-and-chug (take derivative, check the sign) or by noticing that the formula may be written as

$\Pr(i) = \frac{1}{1 + \exp(-v(i))}$

and working the increasing/decreasing chain rule.

Third, students who had a quasi-intuitive understanding ("grok" in Heinlein's word) that probability of purchase must be an increasing function of value, otherwise these words are being misused.

Ideally we should be training business students to mix the skills of the last two groups: a fluency in basic mathematical thinking and grokking business implications.

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Administrative note: Since I keep writing 4000+ word drafts for "important" posts that never see the light of blog (may see the light of Kindle single), I've decided to start posting these bite-sized thoughts.

Thoughts on the Kenan-Flagler $89,000 online MBA (and the MBA degree in general)

 I saw the news this morning that the Kenan-Flagler Business School at the University of North Carolina—Chapel Hill is starting a new online MBA and charging the same as for its in-class MBA, $\$89,000$.

Online MBAs have so far been mostly consigned to the low end of the MBA spectrum; Kenan-Flagler is a serious school with serious quality, so this is a game-changer. Which raises the important question:

Can a online MBA be worth the same as a regular, in-class MBA?

Futurology is a field fraught with error, so let's do what smart managers do at the beginning of a category lifecycle: think carefully about the likely path of the value proposition and the revenue models. The revenue model here is tuition plus alumni donations, same as for a in-class MBA; let's analyze the four components of the value proposition:

1. Technical business material. Things like how to value a put option; how to measure consumer preferences; how to brief an advertising agency; how to organize a value chain; how to analyze the potential of a market. These technical materials are learned the same way every other technical material is (math, science, engineering): mostly by practice. Practice comes from preparing for in-class discussions or homework. So, this part of the MBA value proposition is easily transferred to a online (or even textbook-based) education.

We may like to think that students are learning the technical material in class – because we are so good at explaining it, of course – but the students only learn the material for real when they put it into practice. More often than not, when they are gearing up to solve problems or analyze cases they have to review their notes or read the textbook. All this can work in a self-guided study, be it from the textbook or from online materials. It all depends on how the motivation (aka the assessment) is executed.

2. Managerial skills. Things like leadership, decision-making on-the-fly, presentation, consensus-building, teamwork. These are essential parts of Participant-Centered Learning, and very hard to do online. There's a point in a manager's training where she has to stop analyzing, raise her hand and – in front of a group of people who are trying to find fault with it – present her view of the case. The ability to convince others and get them to execute your decisions is fundamental to the job of manager and this type of experience does require the presence in a classroom.

In fact many critics of the MBA degree as preparation for management jobs state that the in-class experience is not enough to develop these skills and should be complemented with specific soft-skill development exercises, which – needless to say – have to be done in-class.

This might sound trivial, but many students have told me that, before doing it, they had no idea what it felt like to be called upon to defend a decision that they were 51.5% sure of and make it sound convincing (otherwise it would be dead on arrival). These are the kind of skills that make the difference between a back-office analyst and a line manager.

3. Networking and the broader community. Some non-MBAs, who tend to believe in conspiracies to explain their personal shortcomings, dismiss the MBA degree as just a network-building exercise. That is incorrect, but the network one creates as part of one's MBA is a valuable part of the program. A consultant might look good "on paper," but you save your firm a lot of grief (and money) because your old Strategy teammate told you that the guy can't tell a experience effect from a sound effect. This kind of networking will only develop with continued physical proximity.

But the community doesn't end there: there are the other cohorts (older and younger) and even the contacts with faculty (which in a business school may be more useful than, say, in a humanities school). There's also the broader campus community; some MBA students at a school that shall remain nameless, located close to the Longfellow Bridge on Memorial Drive in Cambridge, MA, use their affiliation with the larger Institute to contact faculty in areas that they might find useful; engineering comes to mind. This broader community might be available to online students, especially in this age of email, instant messaging, and videoconferencing.

4. Screening and signaling. Getting accepted into the program, completing the coursework, and paying a high tuition on the expectation that future earnings will more than make up for it are all signals a student sends to the market. The more selective the school is with its incoming class, the more informative that signal is. Since the same criteria can be applied to online and in-class students, the signal should be the same. (Whether the market accepts that the criteria are the same, that's a different story.)

At first I was flabbergasted that K-F was going to charge the same for the online as for the in-class MBA, but now I think that's actually smart on two levels: one, by having the same price for both, K-F signals that both programs are in fact two variants of the same degree; two, by keeping it expensive, they feed the third component of the signal, that those enrolling expect to make a lot of money, which means work hard.


So, what is the verdict?

On one hand, there are a few serious impediments to delivering the full value proposition of an MBA through a online environment. On the other hand, some of those issues can be mitigated with short "in campus" events. And, some people point out, many MBA students never really get the "soft-skill" parts that would be missing from an online MBA; even at K-F. (Even at Halberd, come to think of it.)

The market will decide, but a-priori there's no reason why, at least for technical jobs in business (including most of the consulting and finance jobs that MBAs crave) this wouldn't be a useful program.