Exclusive Interview: GMAC President Sangeet Chowfla On The MBA’s Future

As you look out at the market, what threat(s) are keeping you up at night (and what are you doing to mitigate them?)

Let’s start at the graduate management education level. The first thing we are really focusing on – and worry about – is the discussion on, ‘How is management education keeping up with both the needs of industry as well as the aspirations of the younger generations who are coming into the workforce?’. We have an initiative we are putting out around the future of work. We are right now in an economy where

Facebook is the largest media company and yet generates no content. Uber is the largest taxi company and has no taxis. AIRBNB is the largest accommodation company and owns no hotels.

So how do we build managers for that kind of economy? Because that’s the economy of the future and it’s going to require new skills, a different thought process, and a different industrial structure. So we’d like to facilitate that discussion, if you will, so that industry, business schools, and organizations such as us can adapt appropriately to those particular trends.

From a candidate point of view, we’ve touched on the fact that candidates’ increasing desire for entrepreneurship and careers with social relevance to make a contribution. Again, we have to address those.

If you take a look within the graduate management education industry, there are obviously the discussions around online education, whether it’s the MOOCs or the online MBA in general. You can’t pick up a newspaper or an educational journal without reading around that particular area. And we have to provide the industry with information to react appropriately to that. For example, everyone talks about online education as something that really going to get lapped up by the Millennial generation because they are very digitally savvy. However, [our research shows that] most Millennials want the on-campus experience. They want to go to school. The people who really benefit from online education are Gen-Xers, who are in the workforce and want online through a part-time MBA or something like that. So we have to provide the nuanced information to industry so they can make the appropriate decisions.

[You asked me earlier about entrepreneurship]. Entrepreneurship can’t directly be measured. We cannot administer an instrument that says you are more likely to be an entrepreneur or less likely. We don’t believe that is a possibility. We have two rules. One rule is that we administer the GMAT test and provide that information to students and business schools. The second rule we follow is to create a conversation based on the fact that we talk to a large number of students every year so we can understand their needs, aspirations, and career goals so we can broker a conversation between students and business schools, imparting information back-and-forth, so that the right programmatic decisions can be made. This year, we were proud to be a co-sponsor with a number of other organizations for the business education JAM, where thousands of people got together to talk about the future of management education. And one of the big themes was entrepreneurship.

As business changes, so too does business curriculum. Looking ahead to the next few years, what are some developments or trends in graduate management education that you predict becoming more pronounced? How will these impact students who will be attending graduate business programs?

To look at the future, I think it is instructive to look at the past for a period of time. If you look at graduate management education a few decades ago, it was dominated by a single format – the two-year, full-time MBA focused around general management. The reality is, the world has become a lot more specialized. As a result of that, like any industry, we’ve matured. And as we’ve matured, we’ve segmented. When you segment, you create niches. There are niche opportunities for students. And there are niche opportunities for business schools and programs to differentiate themselves. Our industry has shifted from the Henry Ford model of one size and one color to the automobile industry of today, where you have a variety of different choices that are available which serve different needs. So that maturity and segmentation of the industry is one of the big trends you will continue to see.

That’s an area of a lot of focus for us, one which we are still working on. If you really look at it from a big picture perspective, there are two million candidates around the world for graduate management education of some type. Then there are about 16,000business schools around the world.  That’s a significant matching problem. How do you provide knowledge of the thousands of options, if you will, to two million candidates around the world? We are aiming to look at not just the GMAT, but a broader set of testing platforms that will feed into a common information exchange. If you really think about GMAT, what we’re doing with GMAT is providing information and insight about a candidate to a school. What we’re trying to do, from things like our school finder service, is provide information and insights about a school to a candidate. Over a period of time, we’d like to bring these two processes closer together so we can provide an even stronger platform for students to find schools and schools to find students. This continues to be a work in progress, when you focus on matching candidates with opportunities and opportunities with candidates, you can get a lot done and do a lot of good for both students and schools. And, ultimately, that’s where GMAC’s focus lies.

Another big trend is the globalization of management education. Not just from the candidate profile that we talked about, but how education is delivered. We are seeing high quality business schools being developed around the world. They are going to increasingly attract more-and-more local candidates into graduate management education. You can see it as creating competition to traditional business schools, but you can also see it creating more-and-more awareness for business schools or articulating the value of graduate management education and creating a raising tide.

Looking ahead to the next few years – and what you’re looking to achieve at GMAC – what would success look like for you?

I think what we need to do is reposition ourselves, to look at ourselves from a candidate perspective. Success would really be if we shift from being a gatekeeper for graduate management education (to some extent) or (and I hate to use this term but I will) a hurdle to be crossed to become an enabler. If you look at the services we provide to candidates, there should be something that helps candidates learn more about themselves, make the right decisions about the options in front of them, connect with the right business schools, and make choices as a consequence. If we do that, we will become an enabler and a connector between talent (the candidate) and opportunity (which is graduate management education and their careers beyond).

You hold an MBA in finance and marketing from the University of Delhi. What did you gain from your MBA experience? What advice would you give to prospective and current MBAs to help them get the most from their experience? 

I did my MBA in the 1970s. A lot of the tactics and techniques of business analysis and strategy that I learned…some are them are relevant and for some industry and time have changed them. What I did learn was the language of business. The starting point was that I became ’buzzword compatible.’ And that’s not a trivial exercise. What that enabled me to do was to always look at things from the 360 degree view of business, understanding the synthesis of different things, whether it is marketing, finance, human resources, etc. ‘How does all of that affect a decision I need to end up taking?’ I found that broader business perspective to be incredibly valuable to my career.

What is important to young graduates? I encourage people to come to me to take a look at the long-term. The person going to business school today is going to have a 30-40 year career. In the course of 40 years, the specificity of what we have learned will change. Technology, business structures, regulatory environments and the industrial structure around the world will have changed over 40 years if we are to believe what has happened in the last 40 years. The important thing for a candidate is for he or she to always keep the long term in mind. Focus on building skills around flexibility and agility. That will serve that candidate through the various business cycles that we go through rather than becoming inflexible, rigid, and niche.