Here comes the Jack Welch MBA

Famous ex-CEO, best selling author, sought-after speaker and media celebrity Jack Welch has decided to launch his own online business school. An investor group (Welch has a 12% stake according to the Wall Street Journal) is buying a bankrupt private school in Cleveland that was well on its way to losing its accreditation. Welch and his wife Suzy (former editor of Harvard Business Review) will help plan the curriculum and recruit faculty. Welch also will record a weekly video for students.

Privately-owned online schools such as the University of Phoenix have captured a significant share of the MBA market. Their appeal has been based largely upon convenience and relatively low cost. As the director of a face-to-face MBA program that costs about 50% more than the advertised price of the Welch MBA, is this going to keep me up at nights?

Maybe. I think the key factor will be the success (or lack thereof) that Welch U has in attracting faculty. Suppose Jack opens his checkbook and gets a team of superstars to be his lecturers: Michael Porter for strategy, Jeremy Siegel for finance, etc. Also suppose he keeps it open and pays enough to attract solid faculty from mid-tier business schools to actually engage with students on challenging assignments and projects. These might be recently retired faculty whose CREF accounts look like mine. At some scale you might be able to deliver this degree online for $21,600 and make a decent ROI.

The other side of the coin: what if Welch decides his own personal star power is enough of a draw and sticks to the other aspects of the Phoenix business model? Hard to see how he beats Phoenix at its own game; he has to change the game by adding more value than his name.

At NC State we tell prospective MBAs to evaluate all programs based on (1) what they will learn in the classroom (which is more than listening to a lecture) and (2) what connections they will make with faculty, fellow students, and alumni that they can leverage for the rest of their careers. I am skeptical that Welch U will compete very well on the former dimension and very, very skeptical that they will make any effort regarding the latter.

A word of warning to all prospective Welch U faculty: don't end up in the bottom decile of the student evaluations; Jack originated the "rank and yank" personnel policy at GE!