Laura D'Andrea Tyson has a string of achievements in the academic world as well as in the highest echelons of policymaking. For over three decades, she has ventured into what has traditionally been male territory.

An economist with a keen interest in international trade and competitiveness, Tyson was the first woman to be appointed chairperson of the White House Council of Economic Advisers in 1993. Two years later, she became the national economic advisor. Interestingly, Tyson was the highest-ranking lady in the Clinton White House. After her stint with the Clinton administration, she joined Haas School of Business becoming the first female dean of Top 25 US B-school. She repeated the feat in 2002 with her appointment as the dean of London Business School (LBS), a Top 10 international B-school.

Not surprisingly, Tyson has regularly featured in listings of the world's most powerful women. She has figured in The Australian's list of the 100 most powerful women and the London Times' list of 25 most influential women in the world.

Among the major initiatives at LBS, Tyson has undertaken a major revamp of the MBA programme based on a survey of global recruiters. In this interview with Businessworld 's Indrajit Gupta and Neelima Mahajan, she discusses the survey and other issues concerning management education. Excerpts.

Last year, London Business School carried out a survey on global business capabilities. Why did you feel the need for it?

We try to be responsive to the market. It is important for us to know what our clients – students and those who hire them – want. Also, we are in an international environment in London right now, with students from around the world. So we need to ensure that we are responding to customers globally. We had the opportunity to use some of our regional advisory board members (from all over the world) who were willing to design the survey with us. So we had a lot of help.

At that time, we were systematically reviewing all our programmes. Since we were going to be making changes anyway, we thought that we should get as informed as possible by this kind of market research.

One of the things the survey talked about was the shift from knowledge to skill development. What does that mean for the focus of management education in future?

I think there's been a bit of a pendulum swing and often we swing a little too far in one direction, and then there's a correction. If you look at management education since the late 1960s, there was a view that it was too trade-oriented. LBS was coming into being at that time. So we followed the general developments and focused on rigorous content in every discipline, drawing research-oriented faculty. But perhaps due to that focus, schools didn't pay enough attention to the softer set of interpersonal and leadership skills. So we wanted to get a sense of what skills were more important.

There was another issue about personal attributes. For example, you can train people to be good communicators; you can train them to be good team players. But can you train them to be more creative?

Nothing in the survey results was surprising, but some things weren't there (earlier). For instance, on the attributes side, humility had not come out. We should be able to teach humility as well as leadership.

We figured there are challenges for B-schools. One is the selection process – whether the students you are taking have the interest, and possibly already some of the personal attributes, to develop and can show in their personal experiences that they have some of these skills. Two, we also have to think about how to encourage some of the skills.

Two other things that came up are easier to do. One is the need to internationalise curriculum. Business education grew out of the US. So the textbooks, cases and the methodology still have a disproportionate US influence. So how do you globalise? If you develop more cases, the more you have a tool; the more projects you develop, the more you have a mechanism. The second other thing is giving students the opportunity to pull together strands from, say, finance and marketing strategy into capstone projects, end-of-the-year presentations, so that they get out of the disciplinary-focus into something broader.

Traditionally business schools have been structured along very sharp disciplines and have hardly encouraged a multi-disciplinary approach. How does that orientation need to change?

You must find faculty who are interested in topics cutting across disciplines. For example, we have a faculty member in Economics and one in Organisational Behaviour. They are both working on operational issues in cross-cultural settings. One is talking about the economic differences of places to locate to and the other is talking about the cultural differences. So they can design a course on working in different national environments from a cultural perspective and an economic perspective. We are developing some cross-disciplinary centres. We are putting together a centre of corporate governance which has faculty from Finance, Accounting, Economics and Organisational Behaviour.

How easy or how difficult has it been to frame that research agenda differently? People often talk about how research is becoming far more specialised and so people are more interested in creating sharper niches.

The problem is that the incentives for a junior faculty member are biased towards narrow-focused work published in their academic work. Two things happen. For example, one of our faculty members is up for promotion to professor this year. She has worked in finance but is interested in IPOs and the financing of IPOs. So she talks to people involved in entrepreneurship and accounting – something she would normally not do.

Also, people establish their credentials in a narrow way because that's what the rules are. But that doesn't mean that's where you have to stay. If the institution provides enough alternatives for you to think beyond that, then there will be views that I would like to do something different. I did narrow economic academic work and it was well received and then once I had tenure, I moved institutions and started to work in an inter-disciplinary group by choice. So you can bring senior faculty members who can become part of the institutional momentum to do more inter-disciplinary work.

Increasingly we are finding in India and the US that business is being taught at the undergraduate level itself. What sort of changes will that bring in the way you plan curriculum?

The experience seems to be that students who do an undergraduate degree in business do a MBA years later. I would encourage people not to do an undergraduate degree in business.

It's perfectly reasonable to take some business classes but it seems that's the last time where you can do some broadening before you do some ‘deep diving'. In the US, a lot of people get undergraduate business degrees but still do their MBA because they realise the difference between a professional degree and undergraduate exposure to management. Kellogg is handling this in a different way: they say that if you have an undergraduate degree in business, you should be able to get the MBA in a shorter time. So they have actually gone to the model of a two-year MBA programme, except if you have an undergraduate degree in business.

Henry Mintzberg once made a sharp comment about how business schools really leveraged the experience students bring into the classroom (See ‘Mintzberg Unplugged', BW , 27 September 2004). What is your view on that?

This depends on faculty. If you are an energetic, interactive case professor, you can get tremendous learning power out of your students. If you get up in front of the class and lecture, you are leaving a lot of money off the table. At Harvard, it is pretty regimental because everybody does that same case that day. But at LBS, some of our classes are cases, some of them are going to be straight lectures, some are going to be a mix of cases and lectures. As for Mintzberg – I have never actually had a chat with him – it's nice to have all these extreme views but that's what they actually are: extreme. There are lots of students who can be helpful to one another and there will be others who will be hard to engage.

The other way students get engaged in teaching one another is through projects. Much of the work in the first year is done in project teams but this has a drawback: some team members ride off the others. So we need a blend. Here, we have second-year projects which are individual efforts; we have shadowing projects in the first year; we have team stuff and interactive classes but we also have straight lectures. In shadowing projects, you choose a leader and ‘shadow' them for a week. At the end of that, you present a report to them and to your class about what you learnt about leadership or about the organisation by watching the leader. Someone once actually wanted to shadow the Dalai Lama!

In your report, the late Sumantra Ghoshal made a sharp comment that companies often say that people know what they need to do but they don't really do it; therefore, the need for being action-oriented. But in a two-year time frame, can you really change an individual?

You equip individuals with the capacity to do it. You may go into an organisation which doesn't really want you to do it. Some recruiters say they want all this but they don't want the student to come in with high expectations: one of their concerns about MBAs is that they come in and think they are leading the organisation. They want them to come in equipped to lead the organisation, but they don't want them to lead it. So it is a balancing act.

Some organisations say, OK, let's bring you in, here's how you would manage, how you would innovate… And others say this is your job, this is how we rank your performance and if you try to do something else, you are not going to be viewed as a team player. So recruiters need to think about what they are hiring for. We have to ask ourselves: are we equipping students with the right set of things so that they can go into different kinds of organisations and adapt.

This year, LBS introduced the option of allowing students to finish their MBA in 15 months as opposed to 21. Do you draw some parallels with Kellogg on what you've done with this accelerated MBA?

We are trying to give people flexibility to finish the MBA in less than two years based on their experience and abilities. In many respects, LBS has historically followed the US two-year model. But we are drawing students from all over the world where their alternative is mostly the one-year model. We considered moving to this model but decided not to. Because we felt that students and recruiters benefited from the summer internships. But to make that work, they needed to come back to the school after internships.

We also realised that our school is expensive in terms of opportunity costs. So if someone wanted to and could finish the degree requirements so that they left, say, in January of their second year, that was fine. So we were listening to recruiters and to students. In a way, recruiters like the two-year model because of internships. We have two kinds of students: students who want the two-year model because they are coming here to change their career, or they are going to concentrate on something they have never concentrated on before. Then we have the one-year model people who are ‘accelerators': they get their certificates and move on. This is how we try to please our somewhat diverse audience.

Have you got any indications of its acceptability yet?

No, not yet. A lot of students who come to us are attracted by the two years. In a two-year model, you do skill development in terms of outside activity related to the school – like organising business conferences. So, students have the opportunity to show their leadership, organisational, teamwork skills in out-of-the-classroom experiences, which you can't do in one year.

Would you consider introducing a one-year MBA?

I wouldn't rule it out. But we need to learn more from our hybrid model. It's not a one-year, it's a one-year plus something. We think it's likely to be more attractive than our pure one-year model.

There's a wave of research centres that are now coming up in India. What's really changed in the last few years, and what importance does India hold for LBS?

There's been a relatively recent recognition of the significance of India to the global economy. In the 1990s, that was eclipsed to some extent by what was happening with China. Over the last five years there's been more balance. China and India are both being seen as very significant, different models of development but equally interesting and important. And that is affecting universities around the world.

In the US – I spent most of my academic life there – I was always interested in what was then frowned upon as regional studies. Knowledge or interest of a particular place was a negative because it suggested you weren't serious about your discipline. Now, at least from an institutional point of view, we've got to find a way to understand what's going on in these places because that is where the future growth of students and research funding and everything is. How can we be there? We can be there in part by setting up a research centre. The problems then will be populating the research centres because the faculty is not always interested. They are interested in their discipline, in their home location, in the networks that they know. So it will be a slow process.

So are satellite research centres ruled out for LBS?

For us, it is different. For the last 15 years, the school has gone about making its student body and faculty increasingly global in nature. So in a sense the place we chose to be in had this highly multi-cultural, multinational mix. We started admitting a significant number of students from India and China. We started to internationalise the faculty. That way we have been consistent.

What's harder for us is research. All those initiatives are university supported. If I want to set up a research institute in Mumbai, I would have no budget. We have to think about ways to be global that fit our financial model. The best ways for us to do that are through student programmes where we can generate some revenue from the programme. Or we have funding for a small centre at LBS on India which we use to develop cases. So we are trying to build some research for our programmes based on that centre. That's our strategy for now.

If you have more global quality schools here like the Indian School of Business, is there some danger that a lot of students would prefer to stay on in India because the value proposition is much stronger now?

Yes, over time with more quality suppliers here, you will have two effects. One, more suppliers actually help generate a market: so people who didn't think about the MBA before will do so now. The question is that when they think about the MBA, do they think globally? Each student has to think about this because it is the issue of family, financing, etc. I don't think we're concerned that we will lose demand because of the growth in alternative programmes here. The strategic question for us is that we, as a global school, should be doing more outside of London. That's a 10-year ambition for us and we are thinking about that.