Gill South: Things a little quiet in the office? Duck out and get an MBA

Not so long ago, the biggest problem for New Zealand employers with thriving businesses was the skills shortage. Some had the foresight to help their talented staff gain more qualifications, but often this was postponed as firms were just too busy to give them the time.

Perhaps it is time to think again about helping your staff improve their skills if your company is on a go-slow. Some executives might be amenable to taking leave without pay and heading off to do an MBA or a specialised business course.

The head of executive programmes at the University of Otago's School of Business, Ian Lafferty, is talking to employers about the merits of sending managers to his 16-month MBA programme and benefiting from their enhanced skills on their return.

He has one German student on his programme who is doing exactly this. She will return to her employer in Germany at the end of the 16 months at a more senior level.

Lafferty, who has an MBA from Edinburgh and is an experienced manager in the telecommunications industry, is familiar with the allegations about the damage ambitious business school graduates have done to the world's finances.

Some MBAs got caught up too much with "shareholder value above all else", he says. The Otago programme reminds people about good ethical standards, corporate sustainability and the principles of good business, says Lafferty.

"You come out of this MBA understanding the implications of sustainable business."

Business schools can have excellent lecturers who have seen several business cycles and who can be inspirational mentors. One of the most popular on the Otago course, says Lafferty, is Professor Rick Garside, a British economist who is expert in the Great Depression and Keynesian theory, among other things. He is well versed in world recessions and can talk to students at length about the latest one.

Earning lots of money is not the primary driver for these management students, says Lafferty.

Jonathan Matheny, acting director of the Massey MBA programme, says big money is not the top priority for his students either.

"This is not about having a big house in Remuera - it's about what difference can you make, where are you putting your energies?"

Massey is keen to "develop a humbling culture of giving", recognising a real need, he says.

In a new initiative for Massey, starting early next year, MBA students will be working on a project in the voluntary community services which will also involve alumni. The Massey MBA is about transforming something, making it better, and providing better leadership, says Matheny. One potential MBA student who said she just wanted to attend the programme to "justify her $250,000 salary" did not get accepted, he says.

The university is attracting inquiries from people who are "recognising that there are windows for them to become more competitive", says Matheny.

Of course, one of the key things about MBA programmes is the contacts you make. During an orientation week recently at Massey, one of the 65 students was notified that he would be made redundant in two months. Matheny says the student stood up in front of the 64 other students, many in management positions, and said: "Right now I'm available for permanent positions and/or consulting work." And in the next five days, he picked up a number of leads, says Matheny.

According to Massey's figures, 25 per cent of the students in this group are being company-funded. In some cases employers will pay on condition of and get an MBA

meeting some performance target. Meanwhile, the students are taking advantage of interest-free funding.

So what does industry think of MBAs these days?

Simon Monks, partner at headhunters Heidrick & Struggles, an MBA himself and president of the NZMBA Association in the late 1990s, says there are a lot of out-of-work MBAs.

"I know some people who have done an MBA and it's been a complete waste of time - it's not changed them as managers and the way they treat people."

Monks found his MBA "put a theoretical framework around things that I knew intrinsically". He says "MBAs crystallise what you need to know and what you need help in. The biggest thing that you get out of it is that all functional parts of the business must flow in formation. You can have great marketing and great sales but if you have poor operations the result is zero."

Executives can also undertake short courses in areas in which they are weak, suggests Monks. He did an accounting for non-accountants course a few years ago which he found very helpful. He didn't want to be an accountant, but he wanted to know what questions to ask.

With the number of graduates staying on in universities to do Masters and PhDs, there will be a better educated workforce when the recession lifts, says executive search consultant Peter Kerridge, head of Kerridge & Partners.

Kerridge says he has never had a client insist that their chosen candidate have an MBA. He thinks that what companies value are leadership skills.

"Good leaders are people that understand people and understand themselves," he says.

"It is their ability to accept people for who they are and who they are not." Such people will be able to inspire others, he says. These are not qualities people will necessarily pick up on in an MBA programme, says Kerridge.

The head of HR at an Australian organisation with 20,000 staff recently told him that the best way for his staff to learn about human behaviour was to spend a week at the City Mission.

Gill South is a freelance journalist and author of the newly released Because We're Worth It, a "where to from here" guide for today's working mother.