Do we need to teach a new kind of leadership for these straitened times, and if so, how are business courses changing to reflect this demand?

Leading a business through a recession draws on special skills. Cutting costs, keeping up morale, managing change and finding new markets are just some of the challenges directors face. Many turn to business schools and training providers for the abilities and knowledge required to see them through. But are syllabuses changing fast enough to reflect these needs?

The schools are certainly aware of their obligations. Margi Gordon, director of Roffey Park, says it has reacted to the demands of the changing economy by adopting a more forward-focused approach to the teaching of leadership on its development programmes.

"We need to build on people's confidence to manage in ambiguous situations," she explains. "They need to be able to scan the environment and respond more flexibly, working with what's real rather than the past, because the past hasn't taught us much. And what you've done before probably isn't going to work."

Students are encouraged to bring their current business challenges into the classroom. "Rather than working on case studies and the traditional business school approach, we've been saying, let's look at the real issues facing you," Gordon adds.

The feedback has been good, with participants reporting they are pleased to have found the time to step back and deal objectively with issues they've been facing at work. In the past six months, Gordon has noticed people being highly responsive but possibly too short-term in their thinking. "The focus has been on survival. But coming away for a programme for a few days gives them that long-term view. It raises optimism, too."

Her opinion of teaching in the recession is shared by many in the top business schools, although they don't all agree on whether to burn the syllabus or simply make a few judicious edits.

In fact, Séan Rickard, director of the full-time MBA programme at Cranfield School of Management, is adamant that any institution that has changed a significant element of its teaching must have been doing something wrong in the past.

He insists that most of the syllabus remains relevant, citing modules in people skills and leadership as an example. "Learning how to work with others to achieve specific objectives, say, is not going to vary, whether you're trying to reduce costs in a recession or enter a new market in a boom."

One area where there has been change is in the case studies used to reinforce learning and in the topics chosen for classroom debate. "There are now case studies incorporating aspects of the downturn, for example: can environmental sustainability remain a priority in a recession? And the programme opened with a debate on who was to blame for the credit crunch."

Rickard is one of those who suspects that teaching on some programmes may have contributed to the crunch. "Nothing has fundamentally changed when it comes to the theory and practice of leadership," he says, "but over recent years, given the high returns on offer in financial markets, I think many business schools played down traditional management teaching and put greater emphasis on factors like finance."

He is less inclined to blame traditional MBA programmes than the specialist Masters in Finance, which has become increasingly popular in recent years. "I wonder to what extent the focus on younger students and the over-riding pursuit of profits on such programmes may have adversely influenced the culture of financial markets," he says. If Rickard had his way, MBAs would only recruit people with several years' experience in business, who have a wider perspective and are more likely to understand the importance of people skills and responsible behaviour.

Academics are well aware that the finger has been pointed at them and some are tackling the problem head-on. At Cass Business School, which runs courses from undergraduate level up to doctorate, a task force on the teaching of ethics has been appointed, chaired by Paul Palmer, professor of voluntary sector management. He says schools and accreditation bodies are seriously wondering: "What have we produced? What are we teaching?" The approach adopted at Cass has been to look again at all courses on offer.

"Instead of sticking in a module on responsibility, as some might do, we're looking at the whole dynamic of our courses in terms of how we teach every module," he says. Staff are being offered training on ethics and leadership, which will cascade down. All modules for students will include the theme of "values and attitudes".

Palmer explains: "Business schools have been good at teaching skills and from now on we will also be good at teaching wisdom." This approach will enter every subject, even something as dull and seemingly straightforward as depreciation. Instead of just teaching methods to calculate depreciation, in future Palmer will ask students to consider the implications of throwing away assets and how leaders might challenge previous thinking.

He gives the example of the winner of Best Social Enterprise of the Year in 2009, Brighter Future Workshop in Skelmersdale, Lancashire, which revamps old wheelchairs and scooters to resell them to disabled people and avoid the equipment going to landfill. He believes other businesses should incorporate this kind of thinking into their policies around depreciation, so that stock is not thrown away and computers are not retired without a plan for how they can be reused or recycled.

Among his colleagues at Cass, Palmer says it is accepted that their teaching must reflect current realities. The professor of entrepreneurship, for instance, is teaching bootstrap finance for start-ups—making do with what you have when a loan isn't available. And the marketing lecturer is placing emphasis on the way that strong brands can hold their value in a recession. Palmer reckons the tutors who have brought their teaching up to date receive excellent feedback from students.

But some directors remain unimpressed by university syllabuses. Simon Biltcliffe is managing director of Webmart, the self-described "easyJet of the print marketplace", employing 35 staff with a turnover of £37m. He is about to roll out the operation into other territories starting with the Netherlands. He sums up the MBA syllabus in this country as "all the boring stuff" and maintains that he has to "unteach" what people have learnt on such courses because it assumes long schedules and big structures.

"Our business runs on a timeline of days or hours rather than weeks or months," he says, "but when you ask them to put something together that looks at a range of options, they immediately get into a mindset that it's going to take weeks to do it. And I say, you've got until this time tomorrow." He feels that the emphasis on thinking in a structured, disciplined way is not always relevant in modern commerce. The courses he has looked at for himself or the team don't reflect the skillset he would want.

"Anything within the UK is generally teaching people how to be chairman of ICI and, you know, there aren't that many ICIs around and those there are, are not finding it very tough." He prefers to send his managers across the pond to MIT or Harvard, or to keep them at home and train them on the in-house mentoring programme.

He emphasises the qualities that are needed: an understanding of sales (which he believes is overlooked on courses), agility of thinking, fast decision-making, cutting one's losses when necessary and trying out multiple new approaches simultaneously instead of trying to predict what will work.

Interestingly, much of his philosophy tallies with that of forward-thinking teachers from both MBA and less academic leadership courses who also see the past as a poor guide to the future and talk up the need to think creatively and react quickly.

The desire for more practical courses is met by less academic-focused providers, including the IoD. Ryan Ahern, head of professional development at the IoD, says the institute's Chartered Director certificate tackles what really goes on in boardrooms, whether private or public sector, in a pragmatic way.

"We have 20 to 25 directors round the table and they want to chew over real issues, so we do that. It's very much knowledge-based: what you need to know and do as a director." Although there is an exam, the IoD is an awarding body in its own right and deliberately not aligned to an academy. "As soon as we hand over to universities it would become an academic exercise and people would walk away," says Ahern. "They don't want to do an MBA—they've either done them or they want something different."

The programme is undergoing a review, as happens every two or three years, and this time changes in the economy will be reflected in the new syllabus, which will have a greater focus on risk and on operating internationally. "Increasingly, more of our directors are operating globally so there is more focus on working outside the UK, even for smaller businesses," says Ahern. "If you are relying purely on a UK base then you can be in difficulty, whereas if you are also in India or China, say, it can often mitigate."

He sees this as the time for those organisations that are willing to take the risk to look forward and invest in new areas or territories. "It's that gamble time: investing in the future and setting your strategy now; not continuing to cut too much or be too risk-averse because otherwise you're not going to come out the other side."

Teaching has changed to reflect the new realities and the requirements of participants, who come from different sectors, each with its own pressures, and want learning that they can take back and apply.

All leadership training has to prove its worth these days. But back at Roffey Park, Gordon believes training is more crucial than ever, because good leadership allows organisations to perform more effectively when times are tough. "People don't always think about the fact that their leadership style has a huge impact on the level of engagement of the people who work for them, which then translates into performance," she says.

Recent research from Roffey Park backs this up: the Management Agenda survey of more than 900 managers indicates that where employees see their leaders as effective, they feel more confident, optimistic and secure-both in themselves and their work.

This translates to the syllabus. "We've been doing a bit more work on personal resilience in tough times," Gordon explains. "We've been emphasising leading in change and uncertainty, and helping people build their confidence as leaders."

Cass's Palmer agrees that different management skills are needed in times of scarcity. "We have to teach about behavioural leadership," he says. "You find a wartime leader adopting a very different strategy from a peacetime leader, and a chief executive needs to recognise they may have to get their hands dirty-that it can be motivational."

Shaping the MBA for a new era

This recession started in the world's financial centres. As this sector is populated by many high-flying MBA alumni, there has been an increasingly vocal chorus of criticism that the MBA is at least in part to blame for the crash. MBA curricula, according to this view, were so focused on narrow targets and measuring growth in shareholder value that business schools created a generation of leaders unable to spot the crash coming.

"A lot of the criticism of MBAs being responsible for the recession because of the greedy and selfish concentration on growth fails to recognise the extent to which MBA courses have changed over the past five to 10 years," says Jeanette Purcell, chief executive of the Association of MBAs (Amba), the organisation responsible for accrediting MBA courses. "There's a lot more about change and risk management, and sustainability and ethics than in the past," she adds.

That view is confirmed by Amba's latest research, conducted with Durham Business School. Called the Post Downturn MBA: An agenda for change, the report sought the opinions of business school staff and alumni.

Interestingly, there is a gap between the two groups when asked whether their course included enough material on newer subjects. The research asked alumni, including post-downturn students, to rate the importance of several course areas at the time they took their MBA. Perhaps not surprisingly, the biggest differences were for subjects including sustainability, strategic risk and consequences, corporate governance and business ethics.

Purcell explains: "The MBA has to respond to the current climate, but it is already crammed full of material. There is no desire to turn the MBA into a three-year course. If anything people want shorter, more flexible learning," she says. The real challenge facing business schools, then, is to change the way courses are structured. "This report highlights why the MBA has to be seen as a way of developing responsible business leadership," says Purcell. Rather than adding more modules, she believes a better option might be to weave elements of issues such as ethics, sustainability and risk into an established course such as accounting.

Besides improving content, Purcell says that business schools have also had to become stricter in making sure students are working harder at career management. "The schools now make it clear from the outset that the onus is on the students to go out and build contacts and networks in preparation for looking for a job when they finish. A job is not guaranteed just because you've got an MBA."

The Post Downturn MBA: An agenda for change was published in December 2009 by Amba and Durham Business School