I am often asked about my diagnosis of the causes of the financial crisis, and what role business schools have played in its creation. My answers have been unwavering. The causes are many and varied, and have been well documented in both the academic and popular press. I will therefore not rehash those here. As for the role that business schools have played in its creation, my belief is that, while not wholly blameless, business schools have received a disproportionate amount of blame.

Business schools have been criticized for espousing and promulgating models of individual behavior based on economic self-interest. They have been blamed for failing to impart ethics; emphasizing shareholder profit maximization above all else; encouraging short-term profitability at the expense of long-term organizational health; and for helping design and create the exotic financial instruments that helped get us into this mess.

I agree that the economic system is structured in a way that sometimes provides management an incentive to enrich themselves at the expense of shareholders, or shareholders at the expense of other stakeholders. However, I believe that the criticism of business schools as encouraging individuals to act in a self-interested, even opportunistic, manner is largely overblown. Our teaching in that respect is less normative than descriptive. We seek to describe human behavior (which tends toward self-interest) rather than encourage our students to act in such a fashion. As evidence, look no further than the financial crises that preceded the current one. Many of those occurred before the advent of business schools, yet share some of the same self-interested human behaviors at their core.

This does not mean that business schools are beyond reproach. It is true that the development of some financial derivative products have been based on models that have come out of business schools. Moreover, although we have long understood the consequences of self-interested behavior, we have not been very effective in creating tools to keep such behavior in check.

However, our greatest challenge as an enterprise comes not from the development of complex models, but in the manner in we teach students to use them. That is, we are quite good at teaching students what to do and how to do it. However, we do not prepare them well enough to ask tough questions about why we are doing it in the first place, and why it matters in the grand scheme of things.

We produce skilled and proficient technicians who know how to calculate the net present value of a revenue stream. We teach students how to accurately value assets and price risk given existing formulae. We explain how firms can streamline operations in an effort to create optimal organizational structures.

Yet for all those positive contributions, we do a poor job when it comes to questioning the validity of the assumptions underlying the pricing models that we teach, describing the boundary conditions of such models, and integrating across disciplinary boundaries to create a greater understanding (and appreciation) for how individual parts interrelate to affect the whole.

In this sense then, I wholeheartedly agree with Garth Saloner from the Stanford Business School, as quoted in the Economist, “The business leaders of the future are going to have to do much more than just master the basic functions and disciplines,” he says. “They are going to have to understand all of the systemic elements that impinge on their ability to manage their organizations. That’s a level of general management skills and a level of critical analytical skills that goes well beyond what we have traditionally tried to achieve in MBA programs.”

The business world is complex. In a complex system, it is not enough to simply understand, or master, one narrow discipline. One must acquire a broad understanding of the interrelationships among disciplines. Business schools then would be well served to shift their focus away from the specialist model of training, and toward a more generalist approach. We should favor analytics over the simple memorization and execution of formulae. And we should focus our curricular efforts on imparting broad managerial skills.

In this way we can better prepare students for the workplace, training future managers to understand not only what to do and how to do it when given orders, but also to have the analytic skills to evaluate why it matters and whether it makes sense. Ideally then, our goal should be to train managers who do not just follow rules unwittingly, but who also understand the principles upon which such rules are based.

Educating a new generation of managers who understand why will put us in a better position to deal with future crises. Managers so equipped can better exercise sound judgment and respond flexibly to aberrations, rather than dogmatically adhering to existing models of the world that might no longer apply. Understanding the inherent complexities of human, and managerial, behavior can help us effectively deal with crises before they blow up, rather than engaging in a search for answers once things have gone horribly wrong.

As I tell my students, knowing what to do and how to do it makes you an obedient employee. Knowing why puts you in a position to become a steward of the corporation, managing in the best interests of all stakeholders.