He's got degrees in economics and civil engineering, played defense for U-Penn, worked for the FBI, and has definitive views on management education in the New Economy. The Wharton School's newest Dean (and Reliance Professor of Management & Private Enterprise), Patrick T. Harker, spoke to BT's R. Sukumar during a recent visit to India. Excerpts:

Q. I'm sure you get asked this question at most interviews. Do you think physical business schools will go out of business as learning on the Net picks up?

A. No. We've thought about that a lot. With Wharton Direct, we've done about seven courses on-line; and we're about to launch to a new course in conjunction with ft (Financial Times) Knowledge. So, this isn't a theoretical discussion for us. We've offered a significant number of courses over distance already. What you learn when you do that, is that technology-enabled learning-it's not just about distance; you can still do something with CD-ROM technology and other training devices-can go a long way in teaching basic skills and concepts, but it doesn't allow easily for the development of the person. Education is a mixture of analytical skill development, personal skill development, and perspective building. That perspective is not just a perspective about business but also about yourself. Business education is not just about facts and figures being pounded into one's head, but also a process of learning about oneself-particularly at the undergraduate level. But this is also true at the graduate level. It is even true of the executives who come running to us worried about how they can accelerate their career.

If you really look at education in terms of what's the most efficient way-efficient not just in terms of what's efficient for the school, but for the learner-some things are best learned via distance; some things are best learned by students themselves through technology that is enabled on their desktops, and some other things are best learned by being in a room with other human beings. So, the future of education is clearly hybrid-it's a mix of all those. The pure play-the Net alone-doesn't work.

Can you give us some examples of things that need to be learned in the classroom?

The basic skill of learning how to discuss, debate, and communicate is important because what we're trying to do in the school is creating leaders. Leaders need to have the fundamentals-they need to have the business basics-but they also need to learn how to lead. So we put our students into teams in the first year of our MBA programme and in the first year of our undergraduate programme. They'll have to live and work as a team, irrespective of how much they may hate each other. They're stuck for a year. In the economy that we are in, nobody can know enough to do it all by himself. It's just not possible. So, people have to learn that skill: it's a learnable skill; it's a crucial skill; and probably not one of the things that can be done on the Net. We do have some team building on the Net. We have some virtual team projects, but you really need a mix of the two.

Do leaders need to have different skills now? Do New Age leaders have to be very different from old economy ones? And does that mean the curriculum in schools needs to change?

You need new skills. And you need to revisit some old skills. Take marketing. The old concepts of how you market are being turned on their head completely. Operations and supply chain management have been radically transformed. So, are the business schools transforming? Sure, because business is transforming. Some of it is not about new skills per se, but really about rethinking the core disciplines of the business-the core functions of the business. At the same time, there are a couple of new skills that are necessary. One is on how to lead with teams that come and go, and to manage employees who are, to use an American phrase, footloose and fancy-free. The idea that someone will come and work for you for the rest of their lives is gone. The idea that someone will be loyal because it's good to be loyal is gone. You, as a leader, can't give orders any more: you have to lead by creating an organisation that allows people to be creative. That's very different from the old command and control type of leadership. Do this, or you're fired! Today, lot of employees are telling the employer: ''Give me this, or I'll quit.'' So, leaders have to learn how to manage very differently.

Related to that, they have to learn to manage an environment that's very uncertain, very fast moving. There's been a quantum change in the speed with which business is moving, and a lot of people are uncomfortable with that. One of the core skills we're trying to teach is how to make decisions effectively and quickly. Think about most organisations. They are terrible decision-makers. They take forever to make a decision.

If you look at most business schools as old as yours, they were set up mainly to cater to the managerial requirements of large companies. But increasingly lots of MBAs graduate and jump into entrepreneurship. Is this good or bad?

I don't know whether it's good or bad. It just is. One could argue that it is good. We're producing people who go out and generate new wealth-creating enterprises that the economy needs to flourish. Of our MBA graduates, 20 per cent have either gone into the funding of start-ups, or the business of start-ups themselves. There's been a big change. The old economy thinking was, ''which job do I take?'' Now, the question is, ''do I make a job or take one?'' The thinking now is more along the lines of: ''Before I decide to take one, let me make one.'' So, we have created things like business plan competitions. Students can explore developing a business plan, and present it to funders. We have venture fairs, where venture capitalists judge the business plans. We're creating incubators on campus where students can get their businesses launched. And we're approaching this-for the first time-from a truly global perspective. For instance, there's one young alumnus starting a business headquartered in London, listed in New York, and with a back office in Manila. So, here are people starting out with a truly global perspective saying: ''I'll go to the most effective place, function-by-function, to get this business launched.'' That's the kind of people we want to create-who're very comfortable moving around in the global economy.

If all this has to change, doesn't the methodology of instruction-how you teach-also have to change?

Sure. It comes down to creating efficient learners. The thing about higher education is that it is efficient for the teacher; not the learner. One instructor, 300 students, a huge hall-it's very efficient! It is irrelevant whether they've learned anything!

That's got to change. If there's one trend that this new economy has shown, it's the customer-centric organisation. The customer in our case is the learner. Learning doesn't stop when you get your undergraduate degree or your MBA. Right now, knowledge is decaying at a rapid pace, even as new knowledge is being created. Scott McNealy of Sun Microsystems estimates that an engineer's knowledge decays at the rate of 20-25 per cent every year. So what does an educational institution need to do? It needs to train people on how to think and how to learn. And create tools so that people can learn while they are there (in the institution) and for the rest of their lives. The idea that we're going to train people and give them everything they need to know is crazy.

How do we teach? We teach by courses. You take a course. The focus should be on skills, topics, concepts. And then (we need to) ask, what is the most efficient way for someone to learn that skill or topic or concept. Is doing the best way? Most adults learn by doing, not by being talked to. Let's then create the technology to enable learning by doing. Is it by dialogue and discussing with other people in a room? Is it via distance? On a concept-by-concept basis break it down, and find out the most efficient way of learning. That's going to happen; no question about it.

Change at the instruction level is one thing, but doesn't there have to be a change at the instructor level? How do you ensure that your faculty is clued in, especially if knowledge becomes obsolete at a rapid rate...

That's why research matters. We don't want to be teaching out of text books; we want to be writing the text books. We want to create the knowledge, or discover it even as the industry is discovering it. There used to be this debate that I refuse to participate in: research versus teaching. I don't see it as one versus the other. The best teachers are those who bring the latest ideas to the classroom. That's what students want-not someone who's going to stand there and recite out of the text books. They can read text books as well as the instructor. We're professors; that means we should profess. We should state a point of view. You may disagree with that, and then we should argue about it. We should have an opinion based on our thinking, our research.

Most business schools in the US and Europe started off with a specific geographic focus. Now that we take globalisation as a given, how have these schools coped with it?

Some better than others. But the biggest change has been a bottom-up one. Forty per cent of our MBA class this year was born and educated outside the US. That changes the dynamics fundamentally. For instance, when an instructor says, ''this is the way it happens'', a student from outside the US could put a hand up and say, ''no it doesn't; it may be true in this context, but not where I come from''. That's the thing that is forcing faculty and students alike, everywhere, to challenge their beliefs. So, there are lots of things we can do by having partnerships with schools around the world; by having our faculty spend time around the world.

Do you think the Indian School of Business, which Wharton is partnering in India, can be replicated elsewhere in the world?

We are currently involved in two start-ups where we are giving the technical advice, counselling, and support-ISB and Singapore Management University. Singapore Management University is starting out primarily as an undergraduate institution; ISB will be an MBA institution. This is a viable model. If you look at the education gap in Asia alone, we need to not only develop more brick-and-mortar schools, we also need to develop a technology platform (for management education) that we can get out to the world. There are estimates that the gap between supply and demand (of managers) is 500 million. How many ISBs will you need to cater to that?

If you look at the portfolio of skills an MBA leaves school with, has there been a major change between what it was, and what it is now?

I think that varies by school. Let me just speak for Wharton. We've always prided ourselves on creating students who can hit the ground running, as they say. So, we've always had a strong belief that students have to be grounded in basics. There are some fundamentals of business that students must know. And we're rigorous about that. We also lay a lot of emphasis on the softer skills: the leadership and communication aspects. Those skills are becoming more and more important. There once was an attitude among some business schools that the basics needn't be taught-they could hire a consultant to do that. My favourite counter-example has to do with one of our senior alumni, Lew Platt, who stepped down as head of hp, and now runs Kendall Jackson Wine Estates. I was talking to Lew and he said: ''I'm having great fun. We're involved in a lot of M&A activity because the wine industry is consolidating. When I was in hp I used to throw the question to a huge M&A group and they would figure out the answer. In Kendall Jackson, I am the M&A group! And I still remember how to do the analysis.'' That's happening more and more. Students are now in start-ups and small firms; they just can't throw the analytical part at someone else to figure out. They have to do it themselves. And, at the same time, possess all those leadership skills.

Has Wharton been working on the future of management education? How will it be 10 years from now?

Oh, yes. We've had a research centre called the SEI Center for Advanced Studies in Management. That's been our think-tank for new educational ideas. We're launching a programme this November for retraining senior executives to help them deal with the New Economy. We call this the Wharton e-fellows programme. It's a long programme where they're still in their jobs, but they come and spend their time with us, in South Africa, California-the programme will take people to where the action is. They'll be involved with the students in a reverse-mentoring kind of programme, where the executives will be working with the students on projects-not supervising them, but working with them. Often, the students have a better idea of what's going on in the New Economy than the executives.

That's a huge market isn't it-the market for retraining?

Yes. Continuing education, as we call it.

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