See an opportunity in the ongoing financial crisis seems to be the mantra of every management guru. And crisis specialist Robert F. Bruner, also the dean of University of Virginia’s Darden School of Business, too is on the same course. “Many say ‘the worst is over’, yet there remains lessons to be learnt,” he says. Bruner, who has also authored books on crisis and M&As, feels the current situation is an exciting time akin to another industrial revolution. The B-school dean was recently in the capital to host Darden School of Business's alumni/admission reception and shared lessons from the financial crisis, the M&A cycles, changing career paths and more with Businessworld Online’s Chetna Mehra. Excerpts:
 
What according to you are the lessons B-school students could glean from the ongoing crisis?
The biggest lesson is that crisis will continue to reappear over the time. There is no amount of regulation to prevent the reoccurrence of crisis. My study history shows that they come again and again and we get lazy, we tend to believe that we have been able to manage the global economy so well that there would be no crisis.
 
Well, that proved false and the result is that households, businesses and governments must learn to live very prudently and manage the peers in a way that will help them to bear the next crisis when it comes. This means significantly to have less gap outstanding, to borrow less money, to consumer purchases, generally to bear in mind that every 7 to 10 to 15 years they will be more difficult. That’s the biggest lesson.
 
The lesson for business schools is to adopt and change curriculum. I will offer you three examples. First, we should teach about business ethics. The reason is that we discovered in the last crisis that people were doing some shady things that build up a gap. We need to inspire people to pay attention to what’s right, pay attention to the things that will help society or will harm society.
 
The model of what business schools have been teaching for two decades is a model of very great rationality among investors and decision makers. So, we saw in this crisis that people panic and in fact panics and manias are what crisis is all about. There are many insights we gain from studying these events. We now must incorporate them into the business schools teachings, to help prepare the next generation of decision makers for the reoccurrence of crisis. Finally, it’s not possible to legislate or regulate the crisis because every new crisis by definition is a surprise and it appears somewhere in relation to the core of the economy.
 
The third big thing is that business schools should teach more about the interface between business and government because it appears very appropriate. Governments will play a bigger role in the life of the business community. 
 
Do you think investment banking will be back in vogue when the situation improves?
I do believe it will come back. The fact is investment banking is intermediary in capital raising all over the world and is likely to be lifted by the immense need for new capital to finance the infrastructure, real estate, and new companies. There is a massive need building in the world for fresh capital and investment bankers. So, investment banking is likely to come back, but the large question is, how fast and about that I just can’t say.
 
The worst is behind us and to get an MBA degree today is favourable to position yourself when the recovery comes, which I call the ‘second industrial revolution’. 
 
What is Darden doing in this direction?
We have written case studies, and the beautiful thing about the case methods is it’s really agile. You can take out an older case and put it in a newer case and continue to update the curriculum rather than having to wait for the text books that will come out and has all the latest ideas. Text books are only refreshed with great difficulty and I think you would find that case method works well. 
 
We have simulations about panics. Why panics happen? And we have students who undertake lots of individual reports because they want to learn more about the financial crisis.
 
Out of the things you just mentioned, do you think business ethics can be taught really at this stage of life within classrooms?
The average age of our students is 28, at this stage they may have learned it or they haven’t. But I believe it’s never too late to learn about ethics. The reason we teach, in fact is that through out your life you should be reminded about the deep ideas and ethics. People get distracted as they grow, sometimes they forget them. Sometimes they get corrupted even and the reason we teach the ethics in business school is to give our students a strong reminder about ethics before they become practicing managers. We teach them to ask questions so that when they go to work for their companies they can began to stimulate the managers around them to think about ethics as well. So, it’s a very important mission for business schools.
 
Do you think the way finance is being taught in the B-School also needs to go through a transition, as the recent practices perhaps partially led to the current crisis?
I think the change is necessary but not the radical change for instance, the tools of financial engineering that under pinned this crisis. You need to learn financial engineering in order to structure a subprime loan. Those tools are immensely valuable, they make life better for an average person but they can also be misused and abused. We shouldn’t throw out these tools because they can be misused. We simply need to be very clear in helping the students understand the limits to good practice.
 
How important is risk management when it comes to teaching?
I think it’s very important. Arguably the major financial institutions didn’t practice risk management rigorously enough. My argument would be that not only risk management is valuable but it should be practiced more even. Risk management is based on the same theories and tools as financial engineering and is very important for the survival of prosperity in businesses and banks. It has to be done right.