A mini-MBA course designed to transform British business

A group of British business schools is about to start a bold experiment. This month they will start a national programme to teach management and leadership courses to owner managers of small and medium- sized businesses, in the hope of improving the UK’s poor record on productivity.

The Help to Grow course is being launched in 35 business schools, including the University of the West of England’s Bristol Business School, Glasgow’s Strathclyde Business School and Aston University in Birmingham, and will offer a mini-MBA course for £750. That is a 90 per cent discount on the regular tuition fee thanks to a £200m government subsidy.

The scheme and its subsidy was announced by Rishi Sunak, UK chancellor, in the March Budget. Sunak has an MBA — he studied at Stanford Graduate School of Business.

UK productivity has flatlined since 2008, blamed on what Bank of England chief economist Andy Haldane called “a long and lengthening tail of stationary companies”, dragging down overall economic performance.

The gap between the top- and bottom-performing 10 per cent of service companies in the UK is 80 per cent larger than in France, Germany or the US, according to Bank of England analysis.

The hope is that a formal programme of taught skills will make a noticeable difference. A 2018 study by the UK’s Office for National Statistics found a statistically significant correlation between taught leadership skills and increased output per person — a 0.1 increase in its management score producing a 9.6 per cent rise in productivity.

Speaking at a family-run, American-themed diner in north-west London, whose owner has registered an interest in attending the course, Sunak says: “I think it is an enormously important thing if we can get it right.

“I would love to teach if I am allowed.”

While Sunak is a business school fan, he admits that the institutions have an image problem, particularly among business leaders who have not needed an MBA to further their career. “A good business school can’t be an ivory tower,” he says. “The best type of business school education — and Stanford was an example of this — is where there is significant integration and collaboration between the professors and actual businesses.”

The need to get these “actual businesses” across the campus threshold is one of the reasons for the large tuition fee subsidy on Help to Grow, Sunak says. “Why do we need to offer such an incentive? It’s because we need to encourage them to do this. They might not do it otherwise.”

The single curriculum for all schools has been developed through a UK-wide working group of academics expert in leadership, management, small business and enterprise, with input from the Expert Advisory Council, a group of business leaders appointed by the Treasury.

It is a part-time course, consisting of eight two-hour online teaching sessions on marketing, finance and other business skills, with four classroom sessions using the MBA teaching method of analysing real life case studies. It includes one-to-one mentoring support to develop a personalised business plan and peer group calls to share challenges with fellow owner managers. Alumni groups will also be formed to run networking events and business clinics so that Help to Grow participants can continue to support one another.

The best type of business school education — and Stanford was an example of this — is where there is significant integration and collaboration between the professors and actual businesses

Help to Grow also creates a significant opportunity for the UK education system to find a new relevance for vocational study. The number of UK business schools has risen in recent years as universities have built campuses to satisfy the demand to study business administration at undergraduate level — now the UK’s most popular degree subject.

However, the business model for these new faculties usually involves generating additional revenue beyond academic teaching and research in the form of short courses, run by faculty and visiting lecturers for corporate clients and individuals. The problem here is that this executive education market is highly competitive, with a number of alternative corporate training providers vacuuming up demand for practical business skills such as managing teams, public speaking and understanding coding.

Many business schools want to become hubs for their local business community. Help to Grow is seen by the sector as a way to achieve all of these aims. “It is hugely important to the schools to get this right,” says Anne Kiem, chief executive of the Chartered Association of Business Schools, the trade body for the UK’s MBA providers.

“We know that most people think having business schools being involved in this will mean lessons taught by academics that don’t live in the real world. This is our chance to show to people, ‘Oh, we actually can do this’.”

The aim is for the 35 UK schools with Small Business Charter status to run 320 Help to Grow programmes up to March next year. Ten programmes have started accepting applicants since Help to Grow was unveiled in March, with four already fully booked.

Only business schools that have been awarded the Small Business Charter — a standard achieved by showing engagement with the local community and support for student entrepreneurship — are allowed to offer the Help to Grow course.

The delivery is being managed by executive education teams, a mixture of faculty and visiting lecturers who are tapped for their subject expertise rather than academic credentials.

The University of Stirling is one of two Scottish academic institutions teaching the course. Its semi-rural campus, built within the walled Airthrey Castle estate, is picturesque.

But Kevin Grant, Stirling Management School’s dean, stresses that his institution is no ivory tower, noting that it houses dozens of small businesses on campus and helps many more local companies on operational challenges using teams of business students.

“That is not to say that every SME welcomes such interaction, but we are trying to break down those silos that divide us, trying to demystify this academic world,” Grant says. “We are in the region for the region.”

Going to business school transformed Fraser and Tabitha Bairstow’s business Ark Farm, an educational social enterprise that introduces children and the elderly to animals by bringing domestic and farm breeds into schools, nurseries and care homes.

The couple, who started the business in 2010 as a venture that would enable them to work while raising four children, has experience of what Help to Grow might offer, having completed the Small Business Leadership Programme (SBLP) — a pilot exercise for Help to Grow run at the end of 2019. Around the same time, they completed a similar teaching and mentoring programme called Peer Networks, run by Cranfield School of Management, near Milton Keynes.

At the time, the Bairstows believed that they had just had their best year as business owners with record revenue of just over £200,000 and their most site visits.

But when the Bairstows had their first meeting with the business coach that SBLP tutors assigned them as part of their studies, they were shocked to discover that 2019 was actually one of their worst for underlying profit, something Fraser now blames on his ignorance of some key aspects of his balance sheet.

“He asked me what my hourly cost rate was, but I could not tell him. When I looked at the numbers, I realised that we were not charging enough to do what we were doing profitably.”

The greatest value of the business school experience was this peer support rather than the classroom teaching, Fraser says.