How does Gen-Y learn and what are we doing about it?

Attending the MBA Conference hosted by the EFMD (European Foundation for Management Development) in Paris this week, delegates from more than 40 schools are discussing many issues of relevance to our MBA programs:

– what is the balance between academic rigor and practical relevance of content?

– what is the balance between content and other services MBA programs should provide?

– what’s hot and what’s not?

– what are the marketing, admissions, program management and career placement trends around the world?

– what are the challenges faced by MBA programs and how are they dealing with them?

Clearly, we could discuss the first two questions ’til the cows come home. They are age-old questions that need to be re-visited time and time again.  Every school does this in quarterly workshops, annual curriculum reviews, and are often the topic of our weekly team coffees. Of course it is always interesting to hear the development stories of other schools and reflect how we can learn from their experiences. The trend information will be put on our website next week as much of this is good data.

My main learning this week, however, is this: the way our future MBA students learn is changing radically and at a rate that I previously had not known. As Gen-Y reaches the age of attending business school, indeed our MBA programs, within the next several years, they bring with them expectations about learning for which many business schools are not prepared.

Gen-Y, the Millennials, is learning more and more via social networking, and not through traditional teaching – even though many educators think they are using modern teaching techniques.  I don’t mean just reading material on-line or via iPads, but real, deep interaction with each other in solving real classroom problems, dialoging about assignment content, sharing resource links, and so forth.  And yet the vast majority of this learning is peer-to-peer outside of the classroom, for the simple fact that the majority of their lecturers did not land in the crib with a smart phone like many of this generation did.

Obviously, one of the most daunting challenges will be for business schools to re-educate the teaching faculty to use social networking in – and outside – of the classroom. So how would this type of teaching and learning look like?  Surely, this is a lot easier for some topical areas or functions such as organizational behavior or corporate communications than, say, for finance, statistics or economics.

And even if we find adequate teaching methods for such topics, how can schools get their faculty up to speed to handle the knowledge gap between educators and program participants regarding these tools?

What can we do to change the mentality of some great educators who have been very successful using traditional teaching methods, knowing very well that they may not be as successful with the next generation of students?

As we are currently conducting a thorough curriculum review of the MBA program in St. Gallen, we will begin to address these important questions. The implications of Gen-Y for learning and teaching is fascinating.

What do you think about this opportunity? (I especially would like to hear from “Gen-Y”!)

PS: there are various definitions of Gen-Y. I tend to focus on those born between 1982 – 1995.

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At the Interface: Basel III, Client Delight + Gen Y

The majority of MBA students belong to the Generation called Gen Y, or the Millennials, the Net Generation, the First Digitals. This generation, generally defined as those born between 1976 and 1995, comprises the future leadership, management and workforce of corporations and organizations worldwide. Many young executives attend MBA programs with the hope and plan of pursuing a post-MBA career in finance – particularly, banking. Yet banks, indeed their underlying business models, unless going into a stage of paradigm paralysis, will undergo a paradigm shift in the next 10 years. Within that shift, banks need to delight clients in an unprecedented way. How will MBA graduates and Gen Y as a whole deal be affected – indeed affect – these changes?

Basel III will have a huge negative impact on banks. Tier 1 capital requirements will increase. Short-term liquidity requirements will increase. And there will be a gap in long-term funding. Closing these gaps will, logically, have a substantial impact on profitability. Additionally affecting the bottom line is of course the implementation of the the new systems: strategic planning, capital and risk strategy just to name a couple.  By McKinsey’s recent estimates, ROE will reduce on average by 4 % for European banks and 3% for US banks – a lot.  And what about the effects on personnel, on hiring, on growth and therefore on the level of service because of hiring freezes, threats of layoffs, and too many clients per client advisor.

On the flip side of this pressure is the ever increasing pressure for banks to do a better job with customer service. Call it client focus. Call it client centricity. I personally like to call it client delight – which is far above mere client satisfaction. Whatever they call it, it has to improve. Many of the major consulting firms regularly publish studies on the current and future status of banking. You know them. Deloitte. KPMG. McKinsey. And so forth. All talk about things like “client advisory excellence” and client delight and the fact that clients are global, savvy, sophisticated – and educated and increasingly demanding. The most recent KPMG / UNISG study shows, for example, that only 53% of the banks surveyed believe current client advice is sufficient to meet client’s changing needs in terms of rigorous assessment of financial profile, investment objectives, risk, and insightful investment ideas. 53 percent – barely the majority. Probably the scariest part about clients and the changing laws is the increase of transparency required by both sides, the law and by clients. Clients now can and should know what the bank is making off their money – and this naturally leads to some hefty discussions, and sometimes to clients changing banks.

Finally, there is Gen Y. Gen Y, the Millenials, the generation of new workforce that has been highly and diversly dicussed, watched, researched like no other. How will this generation, indeed our MBA graduates, deal with the changes facing the banks as employees? As clients? Will they find banking as interesting a career industry as previous generations with all of the expected forthcoming changes regarding both the banks themselves and their clients? Is there a fit? Is there a mismatch? How are banks adapting and planning now for the personnel (Gen Y in particular) and possible cultural changes going on right now and even more so in the next ten years? Whose responsibility is it? HR? The line? Strategy makers? Gen Yers themselves? What is the role of business schools such as the University of St. Gallen in these processes?

There is a lot of room for discusssion on all three areas and how they interface: new banking models resulting out of Basel III, what clients need today – and more importantly – tomorrow, and how the workforce will adapt to these changes.

What do you think?