MBAs: Owned by Their Models by Roger Martin

I see the current financial crisis littered with models applied aggressively, confidently, and to their fullest. Because so many senior executives are MBAs, I attribute a portion of the current crisis to the fact that many MBAs are owned by their models.

We human beings are modelers by nature. We develop mental models of the world around us in order to understand how things work. Some of those models are deep and sophisticated while others are shallow and largely superstitious. In the former category, if you are computer savvy with a detailed understanding of how your laptop works, and if it stops working, you will apply your model to engage in a sophisticated diagnostic and rectification process. If your model is in the latter camp, you'll probably reboot the machine and hope that it will start working again. The two approaches stem from very different models and vary in terms of effectiveness and implications.

When users understand the assumptions and logical structure underlying their model, as with the sophisticated computer user, they can be said to own their model - that is, they are the model's master. Alternatively, when they only understand the desired output, the model is their master: it "owns the user"--an expression coined by my Rotman colleague, Mihnea Moldoveanu, with whom I recently co-authored a book on MBA education.
Most MBA programs are taught in such a way that rather than owning the models, the models own students. Management research has become more thorough, rigorous, and technical, and it has developed tools based on complex models. Students in business school have to absorb many tools in a short time, so they aren't inclined to delve deep into the inputs or the workings of the underlying models. They focus mainly on the outputs. When professors try to go into the details, students make it clear that they prefer the takeaways--not its derivation or caveats. In any case, faculty members, proud of the models they've developed or sharpened, aren't eager to focus too much attention on situations in which their frameworks don't work.

As a result of this little dance, MBAs join organizations with a toolbox full of models for which they primarily understand only the outputs. Worse, they believe: "I know a bunch of powerful tools that work in most, if not all, circumstances. I can therefore apply them aggressively, confidently, and to their fullest."

To reverse this situation, my colleagues at the Rotman School and I have been working for over a decade to help our students own their models. At the start of the MBA program, we teach students how to audit models, so they understand how they function and what the limitations are. We explain that every model--every single one--has limitations. Faculty members drive home the point that no model students will learn in the next two years will be perfectly suited to the situations they will face, and that they must build new models or modify existing ones. In addition, they are taught to reverse-engineer models so that they can analyze them and learn the skill of building logically robust models.

In particular, we teach MBAs productive techniques for handling what we call "model clash," when two different models prescribe competing approaches. Rather than teach students to choose one model or the other, we teach them to utilize the assumptions and logic of the opposing models to build new models. We call this approach Integrative Thinking, a term I introduced in an HBR article called "How Successful Leaders Think." This introduction enables students to become sophisticated consumers of the models they learn. They are in a better position to understand models' power and limitations, and they can engage better with professors in debates about their applicability. And, they can practice building their own models.

Rather than produce naïve, over-confident users of models, we try to produce sophisticated and reflective MBAs. This isn't easy partly because the 16, or more, years of formal education our students have had before they come to business school has encouraged the naïve use of output-only models. This is why we have been running a pilot to teach Integrative Thinking to secondary school students. The experiment has been successful so far with secondary school sophomores demonstrating the capacity to reverse-engineer existing models, build new models, and deal productively and creatively with model clash. Their feeling of excitement as they learn to own their models rather than be owned by them is palpable.

Our work there has led me to two conclusions. First, the problem of models owning users is universal--not limited to business school students. Second, we must address the problem long before students get to graduate school.