A/B Testing is So Yesterday and So’s Your MBA
The New York Times recently ran a piece on how the traditional and lengthy MBA programs were under growing pressure because – in addition to questions about the actual economic value of such costly offerings - their emphasis on corporate finance and strategy was increasingly being seen as irrelevant to the skill sets required in today’s competitive marketplace where success is largely driven by speed, constant iteration, and the rapid abandonment of bad ideas. See N.Y. Times article here: http://www.nytimes.com/2014/12/26/business/mba-programs-start-to-follow-silicon-valley-into-the-data-age.html?ref=technology&_r=0 .
As hard as it may be to believe, it’s possible that, in the next few years, the stigma attached to the MBA may even increase. If that happens, I’d say it was no big deal or any great loss because it’s been years in coming; it’s well-deserved; and it all began when the top schools became more concerned (if not obsessed) with inflating their annual rankings in a single magazine (U.S. News & World Report) than with the rigor and relevance of their courses. In cultures where punctuality is more valued than productivity; where there are no rewards for risk takers; and where maintaining the peace is more important than making progress – what else would you expect?
But what really bothered me in the article was the description of the ongoing, frantic, and utterly expected and lemming-like responses of the business schools to the problem. The author said that they were going to “follow Silicon Valley into the Data Age” by adopting the best practices they saw in the outside world and adding courses in stats, data science and A/B testing. Focusing on A/B testing – as if it’s the new tool in town - when the rest of the world (powered by high-velocity, real-time computing and a flood of data drawn instantly from the marketplace) is simultaneously testing and evaluating variables ranging from A to Z is like trying to get the very best price you can on a great new VCR. Or building a new buggy whip.
It’s so backward and embarrassing that it’s almost hard to believe. The only thing more frightening than this kind of technical ignorance in action is the idea that some of our best and brightest students at these schools are being subjected to out-of-date and hidebound academics making bad, group-think decisions which are very much akin to the tech-blind leading the oblivious.
Trying to create market-responsive and timely training solutions without really understanding what massive changes are going on in the marketplace and what new decision-making tools and other resources have been created by the rapid expansion and deployment of new, low-cost and ubiquitous technologies; the growth of market and transactional transparency and measurement; and the impact of constant connectivity to the consumer – whenever and wherever – is like working in the dark or in the Dark Ages. It’s not that MBA students aren’t being trained in the use of data to make better informed decisions – it’s that they are being trained by faculty members who are so far behind the times that they don’t even know what kind of data now exists or the power of that data to be applied in new ways to predict and change behaviors in real time.
Matters of education around data and technology which are this important to our country’s economy are probably too important to be left to educators. The right solutions and our future progress are going to be dictated and changed by active disruptors with unique and original ideas that are far more likely to be based in their visions (and even their dreams) than in their own practical experience or prior education. The changes required are discontinuous leaps forward and not linear extensions of legacy systems and programs. In many ways, it's as if the world is finally waking up to the fact that our existing educational institutions just don’t have the tools or the chops to get the job done any more. These schools are selling their students what they have to sell and not what it takes today to succeed.
And just to be clear, so also are you in your own business. We all get stuck in these ruts after a while in any business and – as we start out the New Year – we can all learn how to pull ourselves out of the mud if we look closely at the 3 basic reasons that cause the problem. Because remember, if you only do what you’ve always done; you’ll only get what you’ve always got - or a lot less – because nothing is standing still today and – if you’re not getting better – you losing ground.
As I see it, there are basically three reasons why we (and so many of our institutions) so often end up in such a sorry place where we’re going sideways at best and – more likely – slipping backwards.
First, we need to understand and acknowledge that the way we have conventionally done things to date is neither inevitable nor the only or best way to accomplish the results we are seeking. In addition, the results we are getting from our efforts today aren’t the ultimate results or the maximum amounts we can achieve – they’re just what we can do now. These aren’t limits dictated by the inherent conditions or the available resources – they are limits determined by our present lack of vision as to what is possible and will be possible as our tools and technologies continue to improve. If we accept the current state as our limits, we limit our ability to grow beyond them. If we only see what we are looking for and we accept that as a boundary, we’ll be left behind by those whose vision exceeds their grasp and who are hell-bent on continuing to grow until that is no longer the case.
Second, when we talk about the future, we need to develop a new language and vocabulary because – at the moment – our ability to share and explain our dreams and visions is bound up and limited by the words and phrases we have at hand. In the context of the business schools, when you are completely surrounded and consumed by the day-to-day operations and the commonplace, there’s very little prospect that you can successfully look outside of yourself and your surroundings to see what’s really going on. It’s like trying to explain the ocean to a fish who’s lived in that environment all its life. What you’ve always taken for granted, you lose the ability to change. Large educational institutions are completely reliant on predictability and linearity – they need the trains to run on time – and they hate surprises. But in the real world surprises and the joy of discovery mean everything and they are the very stuff of change. And this is why it’s so sad to see discussions about moving from A to B when the real opportunities are to think about moving from A to infinity and beyond.
Third, we need to steal yet another important idea from nature. Goalless planning and progress. In nature, evolution doesn’t proceed toward some known, defined or even arbitrary goal. The movement is not toward anything; it is movement away from constraints. Everything in nature wants to be free and unlimited. The goal is never to grow to a certain place or size – it’s to never stop growing in every possible direction. And nature offers neither rewards for growth nor punishments – there are only consequences.
As we look to the future, we also need to adopt the same type of methodology for goalless planning – we need to keep moving forward and measuring our progress – but without accepting the idea that there is only a defined and known goal in mind. This is too minor and petty a vision to permit us to leap forward. The very nature of the future is one of moving targets and new challenges and we can only hope to be prepared for the opportunities that those present if we are looking forward and upward rather than working with our heads down and grinding out some steady progress toward a goal that was out-of-date the day it was established. Fluid goals and objectives are messy and hard to measure and they are difficult to incorporate into institutional compensation and reward schemes, but the fact that they are challenging and complicated only means that the businesses and the institutions that first master these new approaches and systems and build upon them will be the ones that lead all of us forward.
So our businesses and our schools need to change and change quickly. But not without first understanding that there are major systemic barriers to effective change which need to be addressed and changed as well before real progress and improvement can occur. Otherwise, the very nature of the inquiries and the initiatives adopted will be uninformed by the right analysis and information and pedestrian at best. They will be just about as effective as the drunk looking for his keys under the street lamp – not because he thinks he lost them there – but because the light’s better.
PS: “You Get What You Work for, Not What You Wish for” 12-27-14
