The Future Of B-School: An Interview With Florida Dean John Kraft

The University of Florida’s Hough School of Business

Do you see continued expansion of the one-year specialty master’s in business (and if so how that will materialize)?

The one-year specialty master’s, the way they’re working in the U.S., we’ve had them going back to 1997. We targeted them to fill gaps between students getting an undergrad degree, whether it was in business or non-business, and then trying to come back and get an MBA. So we coupled a lot of ours as 401 programs: Get a degree and stay on for an extra year and you get a specialized master’s. It gets you a credential, allows you to stay in school for another year (particularly if you’re coming in with a significant amount of advanced placement credits), and it enhances your job opportunities. And those have all been traditional live programs…They give scale in our courses that drive down cost and then you can offer more electives for the traditional MBA students.

I think what you’re going to find is that more-and-more schools are developing specialized masters and right now they’re focusing primarily on specialized masters that are traditional student model, where a student comes live and takes classes. That’s only a small time leap. You’re going to have more-and-more programs participating in specialized masters programs that are more on the weekends.  So not only can they capture their own populations of students at their school, but also capture students who graduated from somewhere else. If they take a job, they can continue on with their school without significant work experience. So that’s coming. And that will only push the traditional MBA programs further down the ladder.

[Ten years ago, you’d find specialized masters mainly in accounting or financial engineering.] Now, you look across programs and they’re all developing multiples of these programs, mainly tacked onto their larger undergraduate populations. [They are] a captive audience that you can convince to stay on and pursue an additional degree and they’re able to do it and get scale and you’re able to pick up the financial resources because they’re going to pay more for the graduate degree than the undergraduate degree.

Even privates are developing specialized master’s – places like Rochester and Vanderbilt. They’re all in specialized master’s market.

How might either the funding model or the MBA curriculum change over the next five years?

If you look at the MBA curriculum, like any curriculum, there are always adjustments to the program, whether it’s focusing on softer skills, teamwork, [or] social entrepreneurship. Adjustments will always happen. But that’s merely changing the seats around in a plane. What you’re going to have down the road with the MBA is a lot more experimentation on the length of the degree, particularly with one year program options, the way you can get it down to 13 months…You’re going to find that you’re going to look at ways that you’re going to make it easier to get for people to get through that degree and maintain the level of rigor. You’ll see a lot of experimentation… in how students are assessed in the program. There may not be a traditional course model, there may be a different way of assessing people. Some of this is going to be driven by revenue. The two year MBA model – and the fact you have to offer a significant number of electives to people are just going to be expensive. So you have to figure out a way to get scale.

Just like what’s going to happen with weekend MBAs programs. They’re going to switch to more offerings for people and better elective opportunities, similar to what you have in an MBA model.

Again, it’s driven by two factors in the business school space. Number one: It’s fairly expensive to operate, given we [heavily rely] on full-time faculty with research skills. Our business model has been supplemented, to a degree, by professors of practice…Still, you need a core of 70% of your faculty being tenure-track normal researchers producing intellectual capital that winds up in the curriculum and the business community. And that’s an expensive part. Plus, while we may be delivering programs in a lot of different formats, you’re still going to have bricks-and-mortar expenses because even though you may not have as many classrooms, you’re not only going to have the faculty where you need space for, but there’s also a cost associated with the other people who are used to support the program, like all the technology you’re going to have to invest in, the people who help with designing courses, the people who run programs. So what you’re going to find is down the road the core number of full-time tenure-track faculty probably won’t change much. What will change is the supporting cast that surrounds those people, everything from course designers to people who help with technology, to staff people who help students…that’s what’s going to change.

You might think costs are going to drop, but they’re really aren’t because your costs are going to maintain roughly about the same way because you are going to maintain this core group of faculty. You’re just rearranging the mix of people. If you’re going to grow, you’re going to need these people. That’s what the market is going to demand. That’s what the student is going to be looking for. They are going to be looking for more services that can basically treat them as part of a community and assist them with career development. And we used to think that people in weekend programs didn’t need [career development] because they already had careers, but that won’t be the case down the road.

That is one way in which programs can compete. If you’re not going to discount the price, you need to offer a differentiated product that people are willing to pay for. And you’re going to have to offer these attributes so you need to find new ways to create value for students.

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