The Brookings Institution just released a major study evaluating thousands of American colleges.
To analyze the “valueâ€ students can expect, researchers looked at post-graduation salaries, rates of student-loan repayment, the quality of career services, and the like. Top-ranked schools include high-profile institutions like MIT and under-the-radar ones like Carleton College in Minnesota.
These metrics are commonly studied when people talk about the “impactâ€ of higher education. But they paint an incomplete picture. Schools must also be measured by their impact on society.
Major corporations routinely track, quantify, and publicize their impact on society. But Americaâ€™s schools largely do not, leaving prospective students in the dark about the quality of programs.
This must change. And management programs are uniquely qualified to take the lead, since schools need to start acting like businesses — and measure their social impact — to prove their value to students and society.
Private-sector companies have monitored and touted their social impact for years. Goldman Sachs, for instance, pioneered “social impactâ€ bonds to help local governments fund education and public works projects. One such bond is helping finance pre-kindergarten programs for 2,600 at risk children in Chicagoâ€™s public schools.
These bonds are an innovative way to stretch government funding. Essentially, better educational outcomes reduce future government spending on remedial education, social services, and even criminal justice. Governments then use a portion of these savings to pay back the bonds. Lenders, governments, students, and society all benefit.
Or consider Nest, a tech company that makes “smartâ€ thermostats that automatically reduce energy use when people leave their homes. In addition to saving the average consumer $140 per year in reduced electric and gas bills, the smart thermostats have reduced greenhouse gas emissions by the equivalent of 130,000 cars.
Business schools need to start subjecting themselves to similar impact assessments. This might mean tracking the accomplishments of noted alumni. Or it could mean highlighting influential publications, theories, or patents that have resulted from a schoolâ€™s research. For example, the theory of “disruptive innovationâ€ — the model of how smaller companies can overtake industry leaders by creating a totally new market — was developed by a Harvard Business School professor. The theory, and the book that detailed it, inspired the business plans of several companies, including Apple and Netflix.
It could also mean tracking the number of start-ups founded by a programâ€™s business incubator. At my institution, New York Institute of Technology, our School of Management incubator has helped students launch businesses ranging from a sneaker company to a college “blogazineâ€ to a project management web app.
Business schools ought to track and publicize such accomplishments. Doing so will help attract high-caliber students.
Plus, the main accreditor for business programs is beginning to ask schools to measure their impact. The Association to Advance Collegiate Schools of Business, which guarantees educational quality at places like the Wharton School, Harvard Business School, and Stanfordâ€™s Graduate School of Business, expects schools to prove their impact. The AACSB believes business programs must “make an impact in the futureâ€ and “directly foster innovation in business enterprises.â€ And the clear impact of NYIT was a major reason it was able to join the 5 percent of business schools worldwide with AACSB accreditation.
Business schools incubate start-ups, produce industry changing research, and educate the next generation of business leaders. But programs must step up their efforts to quantify these impacts, just as companies do. Only then will schools be able to prove their value to students, communities, and society at large.
Jess S. Boronico, Ph.D., is dean of the School of Management at New York Institute of Technology.