I’ve long criticized MBA programs for not preparing business students – and CEO candidates especially – for the real world. I have myriad reasons for this belief, but an article in Physics World of all places recently crystallized my thinking in this area. In the article, Duncan Watts – author of Everything Is Obvious: *Once You Know the Answer – discusses how the field of sociology gets a bum rap compared to “harder” sciences such as physics and mathematics. His ideas guided me to this conclusion: MBA schools are taking a physics approach to sociological phenomena, and declining as a result.

First, I’ll describe some of the key findings in the article and then explain how they relate to MBA programs

Why Sociology Is Difficult

Many people disparage sociology for not being a real science. In the article, Watts discusses at length how social science addresses difficult problems using rigorous methods. Sociology is hard specifically because collections of individuals exhibit “emergent behavior,” with many factors influencing that behavior over time. On the other hand, physics “is characterized by a relatively small number of very general laws from which special cases can be derived in a logically self-consistent manner.”

Watts does not contend that sociology is harder than physics but, in a nutshell, he says that unlike physics, “every problem of interest to social scientists requires them to consider events, agents and forces across multiple scales simultaneously…But physics, it is worth noting, has made tremendous progress precisely by studying physical phenomena that take place at different scales in relative isolation, and by solving approximations of problems that are more complicated in reality. Outside of black holes, for example, one does not need to worry about gravity to solve problems in quantum mechanics; and although planetary motion is technically a multibody problem, the Sun is so big that the two-body approximation works extremely well.”

Why then the disregard for sociology by the general public? The reason, according to Watts, is that “familiarity breeds contempt.” Everyone is part of at least one social group and involved with the “events, agents and forces” that sociologists study. Most people don’t know enough about physics to question any findings. However, studies of human behavior tend to elicit strong opinions, because we think we understand them.

Watts gives the example of a study he and a graduate student did analyzing the evolution of a network of e-mail interactions in a population of about 40,000 university students. Their conclusion was that “most new ties in the network form either between individuals who share at least one mutual acquaintance or one activity.” He explained this finding to a reporter, who promptly retorted that she felt sorry for them because that they had spent so long working out something so obvious.

He continued: “Of course, it is also obvious that light travels ‘really, really fast,’ but few people would suggest that measuring the speed of light is either trivial or pointless. In real science, measuring things is considered a legitimate activity, whether or not the result is surprising. Yet because most results in social science accord with something we have either heard about, or even experienced ourselves, it is hard not to write them off as something we already knew.”

And this brings us to the problem with MBA programs: Because business is something that we’ve been exposed to all our lives – via our role as workers, customers, shareholders, etc. – we believe it’s easy and all that’s required is a “common sense” approach.

The Problem with “Common Sense”

As a result, we often view running a business, just like social science findings, as “common sense.” What is the problem with common sense? It doesn’t account for the many variables at work in any business situation. Here’s what Watts says:

“If we always had to make predictions about outcomes before we knew them, the difficulty of identifying which of many potentially relevant factors were the most important would eventually become apparent to us. But because we typically only try to explain cause and effect after we know the outcome, we are never forced to learn this lesson. Instead, we are almost always in the much easier position of picking and choosing from our wide selection of common-sense statements about the world to come up with something that sounds like what we now know to be true.

Common sense, in other words, is extremely good at making the world seem sensible, quickly absorbing even the greatest surprises into a coherent-seeming world view, and as such it is a very effective design for getting through life. But a system that relies so much on simplification and self-deception is arguably not one that is well suited to the task of resolving complex social problems.”

Or business ones. Unfortunately, too many MBA programs take this common sense approach. They believe if students analyze enough case studies and learn from other’s mistakes – applying a “common sense” approach to an outcome they already know – they will go forth and prosper in business. They treat business as a deterministic problem, telling students that if they just collect enough data they can solve any problem.

As we all know, the business world is not that simple. Business is fundamentally about people and the interactions among people. Not everything is knowable, requiring far more soft skills than are taught effectively by most MBA schools.

MBAs Are Not Meeting 21^st Century Needs

These limitations are starting to catch up to the MBA. Numerous studies have shown that an MBA does not adequately prepare students for today’s business environments (see this 2007 study and a 2008 study by Harvard Business School professors). USC’s Annenberg School for Communications and Journalism began a research project called “Third Space” about three years ago to determine the gaps between what students are learning in business and engineering schools and what skills companies need.

As an article in the Wall Street Journal outlined, the research team found a need for what they dubbed “Third Space Thinking – a more holistic level of thinking that helps individuals examine complex problems from different perspectives in order to arrive at more creative, out-of-the-box solutions.”

They have identified a “unique set of professional competencies” that traditional MBA programs do not address. These skills fall on the “soft” side, including:

1. Adaptability:“Demonstrate mental agility and resilience in ambiguous situations; be flexible when handling change and less likely to rely on stale legacy solutions. Happily think beyond black-and-white to the gray areas, and ask expansive, unexpected questions that lead to better solutions.”
2. 360-degree thinking: “Think holistically – be capable of seeing the big picture, recognize patterns, and make imaginative leaps based on those patterns.”
3. Intellectual curiosity: “Have a deep hunger to learn and grow. Show a desire to dig deep – to be creative and willing to risk and experiment in order to learn.”
4. Cultural competence: “Have a capacity to think, act and move across multiple boundaries of functions, silos and global cultures, including the sometimes insular worlds of engineering, law, and business.”
5. Empathy: “Demonstrate strong emotional intelligence as well as effective listening and collaboration skills. Have superior communication skills. Be smart, ambitious, yet humble enough to be inclusive and consider the views of others across a variety of disciplines, cultures and perspectives.”

Ernest Wilson, dean of the Annenberg School, wrote in a recent paper about the Third Space project that “the most sophisticated people can ‘code switch’ back and forth between their hard and soft sides, and are capable of integrating the two to yield both power and subtlety in their thinking. These are, by far, the most valuable executives.”

Teaching these skills would be a great start for a CEO program as well. That program should also include a study of game theory, history, organizational development, and other relevant fields, as I wrote about in Forbes.

The Decline of the Traditional MBA

In addition to academia, students and business professionals themselves are recognizing that an MBA may not be what they need to succeed. Another article in the Wall Street Journal – “Harvard Business School Dean Fights to Keep M.B.A. Relevant” – notes that would-be MBA candidates are now hesitating to plunk down $100,000 and two years of their time to earn the advanced degree.

Nitin Nohria, dean of Harvard Business School, told the WSJ: “The biggest challenge is a lot of people are asking the question whether they need to go to business school at all. The golden era of business education . . . is 1950 to 2000, where it was almost considered, if you want to accelerate your career, you’d better have an M.B.A. That sense of necessity of an M.B.A. has shifted. Even McKinsey has people from Ph.D.s and other backgrounds, they train them themselves. You go to an investment bank, they will tell people that you can just stay and become a managing director, you don’t have to get an M.B.A.”

He goes on to say that the US demand for two-year MBAs has decreased 20 percent from 2000. Executive MBAs, one-year MBA programs, and specialized master’s programs are growing more popular than two-year MBAs.

Nohria does say that at Harvard they still see ten applications for every MBA student they are going to admit.

But in general, if MBA programs don’t rethink their curriculums to fill the needs of twenty-first-century businesses, they will continue to decline. As Duncan Watts’s article for Physics World taught me, MBA schools need to impart a more sociological, human approach to business in their teaching. This is not a “common sense” approach, but a rigorous curriculum that imparts both the hard and soft skills students need to address today’s business challenges.