The Survey Says

GMAC shared the results this month of a global survey of MBA graduates 

GMAC is best known to MBA students and graduates for administering the GMAT, often a formidable hurdle when applicants decide to take two years off to immerse themselves in business school.  But the organization is more than a mere exam-process vehicle.  It is engaged, for example, in in-depth research in business education.

This month, it published the results of an extensive global survey to share what business-school graduates from around the world say they obtained from having earned an MBA degree.  What did they gain in terms of compensation, productive work experiences, and promotion paths toward the top? What were the most important skills they used in business experiences? What specific skills were important at various points in a long career?

Over 12,000 respondents replied to survey questions last fall.  They included MBA alumni from over 70 schools all over the globe, most of whom attended U.S. business schools, many in familiar two-year, full-time programs. Graduates from 1959-2014 were represented. Graduates in age from 25-75 were included. GMAC asked questions that encompass a multi-decade career and asked questions relevant to those just a year away from campus. It probed to determine whether business-school knowledge was more relevant in latter career stages than in the beginning. And it asked graduates whether or not certain courses are more important in senior corporate positions than in entry roles. 

Respondents attended a wide spectrum of business schools (which means a range of MBA experiences and curricula).  They included graduates of MBA executive programs, one-year programs, regional schools, and those brand-name elite schools with 3-5 times more applicants than spots for students (including Consortium schools).  The survey, hence, drew conclusions based on the input from, say, a septugenarian MBA graduate from a local business school in the 1960's, from 1990's graduates of prominent schools in Europe or from those who just stepped from the halls of, say, Dartmouth-Tuck or UCLA-Anderson a year or two ago.

But praise the organization's comprehensive efforts.  While the MBA evolves and adapts to the times, there is common ground for most MBA graduates. There are common experiences in school, common core courses, and a common immersion into factors (markets, finance, economics) that affect business performance.  The survey results suggest, for MBA's, there is long-term value. 

Survey Shortcomings?

Like all surveys, there are flaws or short-comings, even in the GMAC survey.  Graduates who are doing well professionally or have done well over many decades may be more eager to take the time to complete a long list of questions and share their stories of promise and good fortune and report their upward-sloping compensation ranges.  As well, measurements of "success," "accomplishment" or "senior management" benchmarks are often a function of personal experiences, values and objectives.

Furthermore, the good or bad fortune of graduates is influenced by other matters besides hard work, preparation, and business-school knowledge.  Notably, an indefinite number of factors unrelated to the MBA can explain "success," including the economy, an industry's product timeline, market timing and plain ole good luck, being in the right place at right time (or being at the right place, but in the wrong time, as many 2008-10 MBA graduates would attest). And even in 2015, bias, nepotism and old-school fraternal ties might come into play. 

Summarizing the Results

Yet like many surveys, there are some intriguing trends and worthwhile messages.  Some of them are highlighted here:

1.  The more senior they rise within an organization, the more likely MBA graduates will admit they use knowledge and skills obtained from business school. 

This suggests a notion many have stated all along--that MBA learning focuses on senior leadership, senior management, and global businesses. Business schools are often praised for teaching students to become sector leaders, business heads and chiefs of finance and marketing. 

But the same schools are often chastised for not reminding new graduates that the road toward the top will be long and hard, and years of dues-paying grunt work will likely precede end-of-career success at the top of the organization chart. 

Survey results show that as business-school graduates become more accomplished over time, they more readily acknowledged that the analytical and management skills they were exposed to as MBA students helped prepare them for current, senior roles.  A public-policy, real-estate or operations-research course might seem irrelevant to a first-year associate, but the head of Asia operations will more likely say exposure to those courses long ago helped. A second-year brand manager at a major consumer-products company may not appreciate her intermediate accounting course until she becomes a business-unit head responsible for a substantial balance sheet and bottom line. 

2.  Recent MBA graduates (more than older graduates), the survey suggests, say professional and alumni networks have helped propel their careers (win coveted job offers or get early promotions). 

Such sentiments might suggest the difficulties MBA graduates of the last decade have confronted, when financial crises, recessions, and massive restructuring across many industries meant graduates had to push beyond MBA credentials to find the best opportunities. Meanwhile, more experienced MBA alumni, established in their roles, may not need to rely as much on networks and contacts.

3.  The survey concludes that more experienced MBA graduates, especially those who have advanced to the highest rungs in organizations, are more likely to feel comfortable with taking risks in their careers.

They are more willing to embrace innovation and change, more willing to be pro-active in business strategy and more tolerant regarding risks of all kinds (financial risks, market risks, business risks and social risks). 

Many inferences can be drawn from the results, although not necessarily conclusively. Some will argue it's easier to take risks early in a career, when reputations have not yet been molded and when graduates have fewer family constraints and can start, stop and transition elsewhere without significant responsibility.  

But these survey results may imply: 

(a) Those who are the types who embrace and gravitate toward risk-taking, business execution, challenge and change are more likely to advance high in their industries, firms or companies. (They advanced because they were risk-taking.)

(b) Those who have reached those highest rungs also have the experience, confidence and financial resources to be able to take risks they may not have been able to when they were strivers still seeking to show competence. (The are risk-taking now because they have advanced.)

4.  For most of those who work in conventional corporate settings, there are few timeline short cuts to "C-suite" positions (CEO, CFO, chief marketing officer, chief information officer, chief risk officer, etc.). 

Survey results say it takes about 17 years of related work experience to reach the top of an organization, business unit or sector. The average age is 48, and the survey tells us something we already know well--that the officer in their C-suite slot is likely to be male.  

5.  Large numbers of MBA graduates today don't work for mega-corporations. They (about 12% of those surveyed) are entrepreneurs or are self-employed.  MBA entrepreneurs tended to be those in technology or products.  Those self-employed tended to be consultants. Vast amounts of the survey might have been irrelevant to them. The survey, nonetheless, allowed them to opine and reflect on their MBA degrees, as well.  

Many in this group describe themselves as being slightly less risk-taking than those in C-suite positions. 

That contrasts from popular notions that entrepreneurs and owners of their companies are those with unlimited courage, willing to tackle business and financial risks boldly.  Like others, they attribute parts of their success stories to business-school learning. They take risks, they acknowledged, but they are measured, calculated risks, especially because they are singularly responsible for employees and accountable to demanding lenders and investors (venture capitalists, banks, and funding backers who want a five-year payout).

6.  About 17% of survey respondents work in finance.

They survey shows that the oldest MBA alumni worked more prominently in finance (about 20% for graduates before 1990).  For later graduates, the global MBA workforce in finance has remained flat, notwithstanding the financial debacle of the late 2000's.

MBA graduates in greater numbers are  marching into technology and consulting (17% and 12%, respectively, over the last five years).  The most notable decline is the significant decrease in recent alumni (over the past five years) choosing government and non-profit positions. 

Those in finance, as expected, are working in financial centers around the world:  Singapore, Japan, New York, and London, e.g. 

7.  As alumni, what do MBA graduates want from their alma maters?  The survey shows they don't want to be harrassed too much about how much they aren't donating to their business schools.

Meanwhile, they prefer their schools offer alumni seminars in business strategy, business analysis, and data science.  They also want continuing access to career-development offices, alumni networking events, and more contact with professors on campus. 

Of the 12,000 graduates participating in the survey, about 70% graduated within the past 15 years and 70% are from the U.S.  About 69% were male, reflecting a surprisingly woeful lack of gender balance at the MBA level (and contributing to a scarcity of women who enter the pipeline from MBA associate to sector head).

Expanding the Survey?

The GMAC survey omitted many questions and topics it could have (or should have?) covered.  No doubt it needed to present a polished, easy-to-check-the-box list of questions, one for which there are discrete answers and which would not be time-consuming for survey-challenged executives. For the sake of efficiency, it avoided topics where responses are ambivalent or deserving far more than a multiple-choice selection.

The survey, for example, didn't provide breakdowns among some segments of alumni--women and under-represented minorities, for example, although there was ample categorization based on geographies and industries.

It would have been informative, for example, to review trends and signs of success among Latino graduates or to review the MBA skills women in senior roles saw as affording them a big advantage in pushing their careers. It could have provided hard data about trends among African-Americans in corporate hierarchies and compensation. And it could have confirmed whether the pipeline to senior leadership is dwindling or promising. 

The survey, too, didn't give alumni a chance to opine on the future of MBA education:  What should business schools focus on? How should courses be taught and in what format and timeline?  What should be in a first-year student's core? How much emphasis should schools put in online offerings, international experiences, operations and management topics, ethics, politics, and psychology?

GMAC is already doing research and sharing its finding on many of these topics.  The 2014 effort was likely about getting maximum participation from the largest number of respondents possible, from all over the world and from all ages and letting the data alone speak.

Tracy Williams

See also:

CFN:  MBA Opportunities in 2015
CFN: Who are the Most Satisfied Business School Alumni? 2011
CFN: Is the MBA Under Attack, Too? 2013
CFN: Mastering MBA Technical Skills, 2011
CFN:  The MBA:  Remaining Relevant, 2011

On Campus: Always Adapting

Emory Dean Erika James

Business schools evolve and adjust to a rapidly changing business environment.  They adapt and overhaul to prepare another generation of managers, leaders, entrepreneurs, investors, advisers, consultants, teachers and bankers.

Some schools turn themselves inside out to make themselves relevant to the complexities of business today. Most align with other programs (medicine, journalism, engineering and law, e.g.) and consider altering the structure and timetable of degree offerings. Many now require overseas study (usually in the student's second year) and combine courses like finance, marketing and operations to show prospective employers that MBA graduates have depth across disciplines and functions. Sure, they continue to have required content. Students cannot avoid a core curriculum of economics, statistics, marketing, accounting, operations, policy, and finance.

Yet today's MBA students must squeeze in coursework in ethics, entrepreneurship, digital advertising, risk management, social media, derivatives markets, private equity, crisis management and global politics. Business schools offer courses in these areas, but must support scholarship and academic research in the same by hiring the right professors and organizing rigorous curricula.

It's all inevitable. It's normal for business schools to introduce new disciplines, programs and initiatives every year to keep up and stay relevant.  The sample below tells what's going on at many Consortium schools in early 2015.

David Thomas, dean of the Consortium's newest school Georgetown-McDonough, told an audience at a special forum led by Washington, D.C.-area business schools last fall that MBA students today are not going to school to select employers. This post-crisis period is characterized by electronic commerce, digital communications, and innovation.  New industries, products and start-ups emerge every week.

Students, too, still haven't forgotten about how the predictable, safe careers paths of their elders were derailed in the late 2000's. MBA graduates, Thomas said, are choosing "meaning and purpose" in what they want to do. Sometimes what they want to do is not doing what they can to secure a spot at Morgan Stanley or McKinsey.

Last fall, the school hosted a case competition for students to find business solutions for non-profit 

organizations.  Students made presentations on behalf of a foundation that supports families in Nicaragua and made recommendations for improvements in health care and education.

Like many top schools, Georgetown encourages and helps arrange international experience.  It sponsors a "Global Business Experience" program, where students are assigned to a company in a foreign "client" country and recommend solutions in finance, operations and organization structure. 

Students at Dartmouth-Tuck late last year formed a consulting team that worked with the U.S. Olympics Committee to assist in Boston's bid to be chosen as the site of the 2024 Olympic Games. Their project wasn't an academic exercise; it was a real business case, requiring analysis, study, recommendations, implementation and presentation. Boston is still in the running, and the Tuck team's contribution could make a long-term difference. 

The entrepreneurial bug has bitten everywhere, not just among venture capitalists on the West Coast. Major business schools have had programs and courses in entrepreneurship for decades now. For years, they offered a handful of courses, and there were always related student clubs and forums that invited prominent entrepreneurs.

Today, entrepreneurship (via academic study, special institutes, coursework, and student groups) is a major concentration at most schools. They offer a long slate of courses and invite successful alumni  regularly to explain their start-up stories to eager students. Students devote time to start-up ideas or legitimate business plans, and schools arrange for venture funding, sponsor competitions, and organize alumni networks to help students take signficant steps to execute their plans.

USC-Marshall now offers a master's degree in entrepreneurship and innovation. Cornell-Johnson sponsors its version of the "Shark Tank" television program, where students present their ideas and detailed plans to panels of professionals.  (A "Shark Tank" on its campus is scheduled for Feb. 15.)

At the senior levels and in diversity, business schools have begun to walk the walk, while talking the talk.  Some Consortium schools have appointed deans who are women or from under-represented minority groups. The dean at Georgetown (Thomas), for example, is African-American. Emory-Goizueta's dean, Erika James, who starts her second year in 2015, is an African-American woman. 

James, for many years, held senior positions at another Consortium school, Virginia-Darden, before Emory offered her the deanship.  She also has a Ph.D. in organization psychology at yet another Consortium school, Michigan-Ross.

En route to Emory, she and others have done interesting research on women as CEO's of major companies.  They examined what happens to the stock price of a public company when it announces it has appointed a woman CEO.  Research shows that in many cases (all other factors being controlled or acknowledged), the stock price declines.  They tried to explain the cause. Often, the decline might be caused by the market's lack of confidence in the selection or by a perception that investors force women heads to prove themselves before share prices catch up. 

James arrived in Atlanta just in time to help shepherd Emory to the top of a list of schools with the highest rates of offers among MBA graduates last year. Both Emory and Consortium school Dartmouth-Tuck reported offering rates of 98% (through August, for a recent graduating class), along with graduates of Chicago and Penn-Wharton.  Offering rates, the statistics themselves, imply many factors could be in play:  

(a) The schools are doing exceptional jobs in helping graduates find employment by attracting major recruiters and preparing students for the process.

(b) The schools are in regions or have relationships with companies, sponsors, or firms where there are historic pipelines to financially stable employers. (General Motors and General Mills, for example, will consistently turn to Michigan-Ross when it needs to hire financial-management MBA's. Coca-Cola will likely approach Emory year after year to recruit MBA's in marketing and international management, especially since vast contributions of Coca-Cola stock explain much of the university's high endowment.)

(c) Yet offering rates at some schools will be affected by a portion of students who are pursuing non-traditional careers or are contemplating start-ups or small companies, where offers are not timely or formal or offers don't exist. A few graduating students withdraw from the process, while exploring a different kind of opportunity.

Michigan-Ross, in the past year or so, has introduced new research studies called "Positive Business" and "Open-book Finance," based on recent work from some professors.  Open-book finance would aligns the finance function with business-unit management and human resources.  It encourages companies to share details of corporate performance (revenues, costs, profits, profit objectives, growth goals, etc.) with all employees, not just business-unit managers or those working in finance.

Researchers indicate employees are more productive and more committed to job functions when they understand their impact on bottom-line performance and understand what the company must do to reach revenue-profit goals. 

Last month, an opening of relations between the U.S. and Cuba was proclaimed in headlines everywhere. Now even business schools are following the coattails of the major news story. Virginia-Darden didn't wait to find a way for MBA students to have a business experience in the country . This month, 26 second-year students spent a week in Havana studying the culture, politics and history, monitoring a training center for entrepreneurs and visiting other small businesses.

Financial engineering and quantitative finance are disciplines not far removed from the MBA core. In most cases, they are divisions within a business school, an attachment to or an advanced offering in the finance discipline.  Students can take related courses or earn a master's degree in quantitative finance.  Some MBA graduates in years past have specialized in quantitative finance or earned separate degrees. 

Carnegie Mellon-Tepper is widely known to have one of the best programs in quantitative finance. At the business school, students can earn a master's in computational finance. Many of them are preparing for careers in asset management, hedge funds, capital markets and financial products, or academic careers in finance. 

At Tepper, students take familiar business-school courses in accounting and economics, but veer immediately into coursework that will include options pricing, derivatives, risk management, arbitrage, data analytics, asset pricing, and advanced statistics. Tepper likes to distinguish itself from other schools with this special offering and permits MBA students with some interest in these courses to pursue them, if they wish.

Yale School Management ("SOM") moved into its sparkling new quarters, Evans Hall, a year ago, after vowing to follow other schools in building architecturally appealing, state-of-the-art facilities. Yale's large glass structure with blue hues and adorable courtyards is already a popular destination for other schools on campus by hosting events, symposia and conferences. You won't hear anymore a Yale SOM student disparage about having to scamper from old building to old building to attend classes or participate in case-study groups.

In the past year, Yale MBA students launched a group, "RevYale," that encourages MBA students to act as mentors to undergraduate students, particularly those that lead student groups and those interested in starting organizations on campus.  More experienced MBA students act as partners and mentors to undergraduates, whether they are interested in art, music, politics, sciences, or business.

The Yale MBA students provide guidance in leadership, finance, and organization management, based on their experiences and studies. The undergraduates get to have an MBA "big brother or sister" in their midst and learn something about the value of graduate business education. Yale SOM gets to steer smart minds toward an eventual Yale MBA.

Tracy Williams

See also:
CFN:  Wall Street's Favorite Business Schools, 2014
CFN:  Yale SOM Gets a New Look, 2014
CFN:  Georgetown Becomes the Consortium's Newest School, 2013
CFN:  Wisconsin:  Preparing for a Diverse World, 2014
CFN:  Is the MBA Under Attack? 2013
CFN:  MBA Diversity: A Constant Effort to Keep Up, 2012
CFN:  Fighting the Gender Fight at Harvard Business School, 2013

Preparing for a Diverse Work World

Phil Miller, Consortium board member,
Assistant Dean, Univ. Wisconsin

Phil Miller is assistant dean for research programs at the Wisconsin School of Business, a Consortium school. He is also a 15-year board member of the Consortium and has been one of its most ardent, consistent supporters. Few have pushed harder for diversity initiatives at Wisconsin and for increasing the awareness of the business school than Miller. Wisconsin is like many large, well-known business schools.  The efforts to promote and maintain diversity among students and faculty are ongoing. They don't stop. Arguably, few have thought longer and deeper than Miller about how to improve diversity at schools like Wisconsin. 

Miller shared perspectives in a Nov. 14 edition of the Capital Times, the news journal based in Wisconsin.  He explained yet another reason why business schools must take a greater, more emphatic and visible lead in diversity: If business schools are not diverse, more than ever before, large, reputable companies will be reluctant to recruit there.   

The article mentions cases where companies like Procter & Gamble, General Motors and Alcoa halted their recruiting programs because the student population at schools like Wisconsin wasn't as diverse as it could be.  The companies stopped not only because schools didn't have meaningful diversity in its ranks (among students and faculty at undergraduate and graduate levels), but because they felt the students there would not be sufficiently prepared for a diverse workplace (or, just as much, a diverse customer base).

Think about it.  Companies, especially large, global institutions with international markets and customers, want evidence, too, that students are prepared to work for, work with or lead others that have different backgrounds and perhaps different perspectives and points of view.  

As companies expand, it's not just about America. ("This is not America's century," Consortium CEO Peter Aranda states in the same article. "U.S. companies used to be able to go someone, plant the flag and be better then everyone else. That is no longer reality.) It's about international talent, multiple markets and unique cultures. It's about an expansive, broad customer base that may be as unfamiliar to Madison, Wisconsin, as Wisconsin may be to them. Business schools, Miller says, must prepare students to do business anywhere and with colleagues and clients from around the world. 

Hence, when they roam non-diverse campuses, attend their corporate receptions and give presentations to students, companies have become concerned the students aren't ready for or accustomed to diversity.  

Wisconsin felt the pressure, needed to do something about it, and Miller has taken a lead there for many years. "Diverse perspectives enrich the education of majority students," he told the Capital Times.  

"Businesses drove us to change, not just to provide a diverse pool for their hiring needs, but also because so many majority students were not prepared to face a diverse work world," Miller said.  He has had many administrative positions at the business school the past 15 years. 

There has been noticeable progress at Wisconsin. In the undergraduate business school, the percentage of blacks, Latinos, Native Americans and Asians has risen from 2.7% to 7.3% in the last seven years, according to the article. 

The statistics are better at its full-time MBA program.  Its affiliation with the Consortium is a factor in better numbers, because the Consortium helps ensure a steady pipeline. In the current second-year class, 14% of the class is classified as minority; 14%, international.  In the current first-year class, the numbers are even better:  17% minority and 25% international. 

The school is also unique in offering special concentrations in such fields as risk managment, insurance, arts administration, investment analysis, and supply-chain management.  

The school, like others around the country, was swift-kicked to improve diversity on campus. But it quickly understood the premise.  Recruiters weren't going to show up on campus, and students who attended the school would be disadvantaged.  

And recruiters these days (at least those from global companies with global markets) want to be assured business-school graduates will thrive in a business environment with other professionals who were born elsewhere, who had starkly different upbringings, who were nurtured in different cultures, who likely speak different languages, and all of whom have invaluable perspectives and points of view.

Tracy Williams

See also:

CFN: Krawchek's Pivot Move, 2014

CFN: Vista's Smith Found a Way, 2014

CFN: Fighting the Gender Fight at Harvard Business School, 2013

CFN: Making Demands on Diversity, 2013

CFN:  MBA Diversity:  A Constant Effort to Catch Up, 2012

CFN:  Knocking Down Doors in Venture Capital, 2012

CFN:  Diversity:  Time for an Update, 2011

Wall Street's Favorite Business Schools

This is not an assessment of the ranking of business schools, although such rankings tend to be unveiled this time of the year when fall classes start.  This is about the MBA programs that tend to send large numbers of graduates into coveted positions in investment banking, corporate banking, sales & trading, capital markets, and equity research.

This is less about the schools' efforts to channel and push MBA students into certain directions.  For the most part, they don't.  Business schools don't shove students into banking and finance, although there are implied messages (based, for example, on the resources the school might devote to finance, finance instruction, and career-advisory services in finance).  Business schools certainly don't ignore benefactors, including sponsors that will include large banks and private-equity firms or alumni holding senior positions in finance. And schools do their best to cultivate close relationships with top institutions.

Business schools, for their part, facilitate a pathway into banking and finance, if large numbers of students prefer to go in that direction.

This is more about the major financial institutions and where they go to fill up the first-year slots in banking and finance.  What are the favorite schools (including those with ties to the Consortium) and why?

The careers website eFinancial Careers updated its list this month. It tries to list schools based on a calculated index, which of course will inevitably be biased or flawed. It acknowledges that.  But the exercise presents a valid picture.  It can tell MBA students and graduates from where major financial institutions (from Morgan Stanley to BNP Paribas) hire business-school graduates in financial centers in the U.S. and Europe. In other words, what are the top "target" schools, not necessarily the best schools, but the top schools where they have had success in steering graduates toward major positions in finance?

Some of that success is due to aggressive efforts by the financial institutions, including their recruiting programs and the relationships they establish and nurture at certain schools.  A lot of that success is influenced by the alumni employed at the bank or firm.  If a large number of senior and influential bankers at a certain bank went to Michigan-Ross, then it is likely the bank will continue to maintain a meaningful relationship that results in a high-frequency recruiting pipeline.  Another factor is the institution inferring that if past graduates of the school have performed well, then the bank should go back and get more of them.

This latest list includes the typical business schools known for corporate finance and investment management and for sending dozens of graduates to Wall Street every year. That includes Penn-Wharton, Columbia, and Chicago-Booth.  The list of 35 includes at least seven Consortium schools:  Yale, Cornell-Johnson, Dartmouth-Tuck, UCLA-Anderson, Michigan-Ross, NYU-Stern and Carnegie Mellon-Tepper.

But the list includes some surprises and perhaps some notable omissions.

Yale SOM, a Consortium school, with its history and tradition in general management and public administration, is third on the list.  The list suggests it is a more popular target among major banks than Harvard, Chicago or MIT--at least based on percentages and the school's success in its graduating landing the best banking positions.

Stanford is no. 8 on this list, even if the more popular notion is that its graduates tend to prefer entrepreneurship and technology. We don't observe many of its graduates heading to the East Coast to work for Citi or Deutsche Bank, but the school has an advantage in residing next door to some of the country's top venture-capital firms. The venture firms, if they choose to, can manage an open-door relationship with the business school just across the road.

Rice-Jones in Houston appears high on the list (14th), higher than even Michigan-Ross, Duke and Dartmouth, despite the well-documented record that Tuck sends large numbers into prominent slots at the top banks and finance firms.  And most would have thought that Texas, another Consortium school in Rice's region, which doesn't appear on the list, would be a more attractive finance target than Rice. 

Virginia-Darden and Indiana-Kelley, Consortium schools with prominent programs and graduates in finance, are not on the list.  Regional preferences among its graduates may explain that.  eFinancial doesn't claim to offer a perfect or a fair list. It reminds list-users that it attempts to capture what appears to be favorite target schools among favorite target banks.

Critics might dismiss one impactful bias about the list.  It opts to divide financial institutions into three tiers and gives more credit to schools with graduates who go to work at the top-tier banks (Goldman Sachs, Citi, JPMorgan, e.g.).  It, therefore, penalizes, schools with large numbers of alumni who work at such institutions as Credit Suisse, Barclays, RBS, Regions Financial, US Bancorp, Sun Trust, HSBC (not regarded as top-tier by these list-preparers) or work at the prominent boutique firms that, in some tallies, have seized some market share from the bulge-brackets.


Remember, this is a list, one that will be out-dated by next summer and one, like all others, should be examined with caution.  While it may be true that Bank of America and JPMorgan enjoy recruiting large numbers from NYU for corporate-finance roles, it doesn't mean a graduate from UNC-Kenan Flagler or Emory-Goizueta won't have a chance to gain an offer.

Tracy Williams

See also:
CFN: Who Are the Most Satisfied Business School Alumni? 2011
CFN:Yet Another Ranking of Business Schools?  2010
CFN:  Be Cautious with Business-School Rankings, 2009
CFN: UCLA--Going Out on Its Own? 2011
CFN:  Yale SOM Gets a New Look, 2014
CFN:  Georgetown Becomes the Consortium's Newest School, 2013 



 

Finance: Still a Popular Destination?

Almost a third of Tuck's grads went into finance

Take a peek at the latest statistics.  At many business schools, they're out and available. MBA graduates from the Class of 2013 have launched their post-business-school careers, and they haven’t avoided financial services as much as the popular impression suggests. 

True, countless thousands who've entered and finished graduate business school since the worst days of the crisis opted not to pursue banking, trading and investment management or other financial-services paths.  The industry has endured transformation of all kinds (regulation, business restrictions, non-stop restructuring, and souring popular sentiment).  And it’s true, too, the industry had become a turn-off to some smart students who in years past would have pursued investment banking without a thought.

In current times, the rewards, comforts and predictable career paths in finance are still uncertain. Don't forget, too, the knocks on jobs and roles that had once been perceived as  prestigious and awe-inspiring on the cocktail circuit.  Many MBA students at top schools, so goes popular sentiment, will likely prefer more humane, more constructive routes in a long business career.

But the statistics are out for recent business-school classes, and they suggest MBA students continue to flock to certain areas in financial services.  Finance will still attract those who are inherently interested in finance, those who have finance in their bones, so to speak. 

Perhaps the numbers are not surging as much as they were pre-2007, but they aren't insignificant.  Or  perhaps banks, investment managers, and trading firms are doubling down to make special efforts to present themselves more fashionably to students, describing career opportunities better, and promising easier lives on the work-life-balance front.   

However, perhaps the industry is more defined, better understood after all the years of restructuring and gearing up for an environment ensconced in new regulation.  Of course, some hard-core students, fascinated by markets, deals, transactions, and cash flows, will head toward finance despite what they hear, see or are told.

Compensation helps, too.  It continues to be one attraction.  Data and anecdotal evidence suggest financial institutions still pay well, even if the industry pulled back and rationalized (and reduced) compensation after the mid-2000’s splurge.

Let’s take a look at Dartmouth-Tuck, a Consortium school. Its career-advisory unit recently shared data for the most recent graduating class after it received a sufficient number of responses from departing students. Tuck is a good example, because it has an outstanding history preparing graduates for Wall Street, has attracted large numbers interested in finance since its early days, and has a reputable finance division.  

The Tuck data indicate consulting is the hot spot these days.  MBA graduates are flocking to what is referred in campus jargon as "MBB"--McKinsey, Bain and Booz. In Tuck's Class of 2013, consulting firms hired 27% of the class (and offered the highest amounts in compensation).  In all, 33% are working in consulting roles, including those working at non-consulting firms or working in the consulting arms of the big accounting firms (Ernst and Deloitte, e.g.)

For some MBA students, consulting offers an experience, similar to what they might have received at an investment bank. They get to do extensive research and analysis.  They get to study corporate strategy and make recommendations regarding growth, expansion, and acquisition. They participate in “live transactions” and prepare exhaustive presentations for clients. They travel around the country. 

They also get to have meaningful contact with clients and sit in meetings with clients' senior managers.  Some become experts in the industries of their clients. Hence, while consulting has always been a favorite first job for MBA students, consulting might be swiping a handful of those who a decade ago would have marched right into Goldman Sachs or Morgan Stanley (or Lehman Brothers, back then) at the first whiff of interest on the banks' part.

Yet the numbers going into finance haven’t dwindled that much. MBA graduates at top finance business schools like Tuck (and arguably NYU-Stern, Michigan-Ross, Virginia-Darden, all Consortium schools) are finding their ways back to Wall Street, but perhaps in a variety of roles.  About 30% of the Tuck Class of ’13 headed to financial institutions, and about 35% are working in finance functions. In investment banking, 14% of the class went to work there; 11% are working in classic investment-banking functions (equity or debt underwriting, M&A, client advisory, etc.)—numbers that don’t suggest a lack of interest in  this generation of students.

Tuck’s statistics, nonetheless, show a dearth of classmates headed into private equity and venture capital (only 2%).  The small percentage stands out because many go to business school with expressed interests (and great enthusiasm) about private equity and venture capital. The numbers might reflect the scarcity of opportunity in such a fiercely competitive segment and the unorthodox ways some of these firms recruit.  (Blackstone and Carlyle may recruit at top business schools across the country, but Silicon Valley venture-capital firms may recruit informally or prefer to recruit only from across the street at Stanford).

The latest statistics may also reflect the lack of opportunities on trading desks at big banks, which have had to scale back because of new regulation.  MBA graduates interested sales and trading nowadays don’t have the chance to work in structured career pathways at a Credit Suisse or JPMorgan and will likely look for opportunities, if they exist, at hedge funds, many of which struggled last year and may not be swarming business schools this year. Some students interested in sales and trading can seek similar opportunities at investment managers (Blackrock, e.g.).

Tuck’s statistics show first-year compensation in finance hasn’t fallen into a sinkhole. But the range is as wide as ever, partly because the impressive, mind-shaking salaries and bonuses have been paid out primarily at the bulge-bracket and boutique banks in financial centers (New York, Chicago, San Francisco), and not always at the smaller, regional institutions. 

Still, in a post-crisis era, compensation doesn’t seem to always drive MBA graduates’ career decisions. Indeed these are different times. MBA graduates know the time they spend at Bank of America, Aetna, or UBS right out of school won't last decades. Furthermore, they seek flexibility and a life on weekends or seek some comfort that when the next crisis occurs, they won’t appear on a bank’s long reduction-in-force list.

Tracy Williams

See also:

CFN:  Are MBA's turned off by investment banking? Oct-2012 CFN:  Who's headed into finance, 2012? June-2012 CFN:  MBA job-hunting: No need to panic yet, Feb-2012
CFN:  Who's headed into finance, 2013? June-2013
CFN:  MBA's: Eye on summer '14, Nov-2013
CFN:  Where do you want to work? Feb-2013
CFN:  Today's bulge brackets, Jan-2013
CFN:  Goldman tweaks the banking ladder, Sept-2012

Yale SOM Gets a New Look

Yale SOM's Evans Hall opens up in January (NH Register photo)

Yale School of Management, one of the Consortium's 18 schools, is opening up a new campus facility, Evans Hall, in New Haven in mid-Jan., 2014.  The school will launch the new state-of-the-art building with receptions, lectures, presentations and celebrations of what has made Yale SOM special and unique among the panoply of business schools. The week's theme is "Leadership in an Increasingly Complex World."

The new campus will feature the marvels of business-school technology and covers 242,000 square feet, at a cost of $240 million, much of which was made possible by benefactor Edward Evans, who was an undergraduate student at Yale and later CEO of Macmillan, Inc., the publishing house. Besides interview rooms and three libraries, it will even have a student gym and entertainment space.

Yale's dean, Edward Snyder, migrated to Connecticut in 2011 from Chicago's Booth School of Business. In the midst of Chicago's Gothic maze, Booth is a modern, self-contained business school campus, the kind of campus Yale SOM students and faculty might have envied.  Once Snyder arrived in New Haven, he spearheaded the completion of a new campus, a new facility featuring the latest business-school bells and whistles. And his experience in helping to open Chicago's new doors no doubt got many SOM faculty, alumni and students excited about a new campus for Yale.

Building modern facilities is a frequent occurrence at top business schools.  They know that to attract top students, schools must pay attention to their physical being. Facilities, campus and amenities sometimes rank as high as innovative course offerings, curriculum, career placement and notable faculty when students decide whether or not to attend.  While Yale SOM attracted top students over the past decades, many alumni and school leaders felt that an impressive, separate campus was necessary to lure the student that might otherwise be more interested in attending Wharton or Harvard.

Yale and Chicago are certainly not the only schools with new campuses.  Stanford now has its new Knight Management Center, home to its business school since 2011, featuring courtyards, magical classroom technology, chic ambience and sunlit, outdoor cafe settings.  Wharton and Consortium school Michigan have also opened new campus facilities.

Yale SOM has had a colorful history. When it was launched in the mid-1970s, it wanted to be different from other schools. It offered a management-education mixture of the public and private sector.  The degree it certified upon its graduates then was the "MPPM"--a master's in public and private management, arguably a combination of the MPA and MBA degree. Graduates would be steered toward Morgan Stanley, the World Bank or Capitol Hill. At one point, the "O" in "SOM" stood for "Organization."

At times, alumni, recruiters, employers and other constituents interpreted the degree in many ways. And at times, new deans pushed the emphasis one way or the other. Eventually SOM settled on the MBA degree, and it has tweaked the definition of what that means from time to time. In its first three decades, Yale SOM didn't have a separate facility, but existed in a pleasant, neighborly network of "houses" on Yale's Hillhouse Ave.

The new Evans Hall reinforces the notion that Yale SOM has become a top business school in a classical way, although the school, more than many others, tends to walk and run to its own drumbeat by remaining small and enjoying experiments with new ways of instruction or new approaches to the MBA experience. Its integrated curriculum is its latest novel approach.

Yale joined the Consortium in 2008 and has graduated dozens of Consortium MBA's since then. 

Yale being Yale, the school and new facility will seek to fit in well with the rest of the Yale campus.  Evans Hall, with blue hues, courtyards and exquisitely selected artwork, wants to be identifiably Yale, circa 2014.

Tracy Williams

Fighting the Gender Fight at HBS

The pot is stirring at Harvard Business School

Harvard Business School made the front page of the New York Times last weekend.  It wasn't because one of its alumni is perched atop a Fortune 500 company or another announced a blockbuster merger with another mega-company.  It wasn't because one of its alumni is waging a ferocious shareholder campaign to take over a multinational company. And it wasn't because one of its alumni is the announced head of McKinsey, Goldman or Booz Allen.

It was because its dean and staff are fighting a fierce fight to change the culture of the school and make it more accepting of the growing number of women on campus. According to the article, women now comprise 40% of the students in the business school. But the culture still remains entrenched in male dominance--in case-study groups, in classroom discussions, in the assembling of secret societies ("Section X," one is supposedly called), and in seizing the highest-compensation opportunities after graduation (especially in private equity, venture capital, investment banking and consulting). The article points out how males at the school are better at "touching the money," finding easier pathways to lucrative job offers.

Harvard, in the article, is applauded for recent successes and progress. It highlights the efforts of Dean Nitin Nohria and his team of administrators, who want to spawn an environment where women can thrive. And they want to change attitudes and increase the number of women faculty.

In business school, class participation, the art of leading discussion and presenting ideas and arguments, can comprise much of the final grade in a course.  In many Harvard courses, participation, as subjective as it is assessed, can be as much as 50% of the final grade.  Harvard administrators want to change how professors assign participation grades, because aggressive, outspoken males in class--honed by aggressive styles from stints in banking and trading--dominate class discussions, outshine others, and dismiss input of females in class.  Harvard wants to change the classroom dialogue and the benchmarks by which students are evaluated.  They are even recommending women to attend sessions on how to raise their hands (highly, visibly and confidently) in class.

This revolution of sorts, a punishment of old, male conventions and traditions at Harvard, has been welcomed by many, but has caused uneasiness, discomfort in others. The Harvard administrators press on, aware that right now the impact is cast only on campus and that the current group of students are part of a grand experiment.

Frances Frei, one of the deans on staff in the business school, is the face of many of the changes, the one who has decided progress is possible by making "unapologetic" (her favorite word) moves and making things uncomfortable for the old guard.

The article highlights what most have speculated about HBS for years--that the experience of attending the school involves intense immersion inside the classroom, in case groups, and, perhaps most important, outside the classroom in networks, social interactions, and after-hours gatherings. Social success, social connections and even social match-making, it seems, count as much, if not more than, aptitude inside the classroom--in finance, marketing, accounting, and operations management.  Some students worry more about social dynamics than about basic principles of valuing a corporation.

That might be disconcerting to some, especially to those who deem themselves unconnected, disadvantaged, or without means or ties to the business elite. That might be fresh air to those with connections, special ties, and less of a knack for dissecting financial statements, cash flows, and volatile currencies.

That's not the way it should be, asserts HBS's current leadership. And the leadership has decided it will change the ways of the school even if it means making unpopular decisions, some of which have rankled many who knew Harvard better as a two-year fraternity for the sons of the elite.

Will HBS succeed? Will the experiment work? Or will it work on campus, but its impact will simmer once its 900 graduates march off to a resistant real world?

Harvard staffers are operating on an old premise for overhauling a culture. Making changes sometimes means inflicting discomfort and pain. Old ways, old patterns and old prejudices against women must be smashed, not just gingerly dealt with. Taking bold steps requires stirring the pot.  Not only is Harvard guiding female students on how to raise their hands in class, but it is monitoring the tone and flavor of discussion in class and evaluating professors on grade participation. It is even setting strict rules on the costumes women might wear or the parts they play at theme parties or end-of-year follies.

Harvard deans understand that changing Harvard won't mean sudden changes in hiring practices and the work environment at private-equity firms, venture capital firms, banks, trading floors and consulting firms. They hope for some eventual trickle-over impact.  They know what they do at Harvard will be watched and replicated at some business schools--at least those schools that have harbored similar cultures of marginalizing women. They know, too, that graduates today will one day become decision-makers, business chiefs and industry leaders in due course and could be influenced by values they adopted in school.

Has Harvard (not a Consortium school), however, addressed similar issues and a similar feeling of disenfranchisement among under-represented minorities on its Boston campus? Maybe not. Or not as vocally. Some among under-represented minority groups will avow they, too, sometimes feel excluded from social groups or closed, social societies on campus or feel uncomfortable raising their hands and presenting their views in classes filled with boisterous former investment bankers on the front row.

Harvard, or at least this group of deans running the business school these days, hopes that a plan that helps resolve gender issues is a plan that crosses boundaries and creates a culture that is a comfortable, conducive setting, so that everybody can thrive--not just brash former M&A bankers taking a two-year break from Wall Street. 

Tracy Williams

See also:

CFN:  Venture capital and Diversity, 2011
CFN: MBA Diversity:  A Constant Effort to Catch Up, 2012

Georgetown Becomes The Consortium's 18th

Consortium Gets DC Footprint

On deck is Georgetown's McDonough School of Business.

This week The Consortium selected Georgetown's business school as the 18th Consortium school. Georgetown will join the other schools formally in July and start admitting Consortium students in the fall, 2014. Consortium Executive Director Peter Aranda made the announcement June 24, marking The Consortium's first new school in three years. Over the past five years, besides Georgetown, The Consortium has added Cornell, Yale, and UCLA and invited back UC-Berkeley after it departed in the early 2000s. 

Georgetown follows the footsteps of other prominent business schools affiliated with The Consortium, including such schools as Emory, USC, Yale, Texas, Dartmouth, Wisconsin, and North Carolina. 

What does Georgetown bring to The Consortium table? It gives the organization an immediate footprint in the Washington, DC, area.  Consortium business schools, often known nationally as top schools by just about anybody who ranks, rates or evaluates MBA schools, are scattered about the country with imprints in major metropolitan areas (e.g., New York, Los Angeles, Atlanta) and with a presence in most regions in the U.S.  But The Consortium had not had a representative school in Washington. The closest business school is Virginia's Darden School.

That attractive location is another plus for a prospective MBA student. Strong MBA applicants have well-reasoned criteria when they choose among top schools.  They examine and choose schools based on course offerings and curriculum, based on a school's strength in certain concentrations (finance, marketing, international business, e.g.), based on faculty and staff they meet in the wooing process, and based on a general vibe, a comfort feeling they are well-suited for the school.

They also may select a school based on geography.  Most strong applicants visualize their lives after school and try to determine where they want to launch careers, where opportunities will be plentiful and where they want to reside over the next decade.  Opportunities and lifestyle in Atlanta will, therefore, make Emory's business school attractive. Opportunities in technology entrepreneurship and Silicon Valley will make UC-Berkeley attractive. The lure of the Midwest will drive Indiana and Wisconsin to the top of lists. For years, NYU has benefited from being a long stone's throw from Wall Street.


Opportunities in international business and Washington being at the crossroads of critical activity in business, law, and government service make Georgetown attractive.

Georgetown's McDonough School is now under the helm of Dean David Thomas, who arrived on campus within the past two years after a heralded career as a professor at Harvard Business School. His specialty there for two decades was organization behavior and human-resource management.  He has already made impressions along the Potomac. For example, taking advantage of the university's strengths in international business and affairs, the business school now requires first-year students to spend three weeks studying the "Structure of Global Industries," which provides a blueprint for students to study all aspects of business from a global perspective.

Thomas apparently also figured the school could do better in diversity initiatives, starting with the student body.  Georgetown hired Shari Hubert as associate dean of admission to increase diversity in applicants and matriculating students. Hubert, an MBA graduate from Harvard, has extensive experience in recruiting in positions she held at Citigroup, GE Capital, and the Peace Corps. Joining The Consortium was an appropriate next step for Thomas and Georgetown.

The McDonough School's MBA program is of modest size by most standards with about 250 students in a full-time MBA class--about the size of Dartmouth's Tuck, not as big as the programs at NYU or Michigan.  (The school has about 1,000 MBA students--including part-time and executive programs--and about 1,400 undergraduates.)

Otherwise, its profile is as familiar as those at other Consortium schools.  Students typically have about five years of work experience and are about 27-28 years old on average. About 1,800 prospects apply to the full-time program with admission rates hovering around 35%.  About 30% of recent classes are women. Also like other top schools, a significant percentage of graduates go into finance (28% in a recent year) and consulting (26%).

This bundle of advantages will now make for tough decisions for the prospective Consortium applicant, who--if she decides she wants to remain on the East Coast--must ponder choosing among rich business-school experiences at Virginia, North Carolina, and now Georgetown.

Tracy Williams

See also:

CFN:  Cornell Makes 15, 2009
CFN:  Welcome Back UC-Berkeley, 2010
CFN:  California Dreamin': UCLA Joins The Consortium, 2010
CFN:  Is the MBA Under Attack, 2013?
CFN:  The Global Imperative on Campus, 2012

Who's Headed into Finance in 2013?

Cornell attracts its share of Consortium finance MBAs

On your mark. Get set. This week, over 300 new Consortium students will launch their campaigns to earn an MBA by heading to New Orleans for the Consortium's 47th Orientation Program.  As in previous years, they will be engulfed by activity, events, recruiters, school staff, seminars, sponsors and celebratory gestures. For most of them, OP is a festive, uplifting time. They pause and take a week-long breath before embarking upon the frenetic pace of graduate business school. 

Among the new MBAs, who's headed into financial services in 2013?

How many among the 300-plus have expressed an interest in concentrating in finance at school or a career in financial services? As they take new twists and turns over the next two years, what do they aspire to do when graduation comes in 2015?

Let's consider the current environment.  The awful, dreadful financial crisis is receding into memory, although there is a haunting, lingering impact. The crisis and economic recession caused upheaval and changed the landscape at banks, broker/dealers, investment funds, insurance companies and private-equity firms.  Financial institutions are rushing to hire just as many experts in compliance, risk management, regulation and technology as they are in luring investment bankers, brokers, wealth managers, and traders.

With steady improvements in the economy  and with remarkable upturns in equity markets, this year's new MBA students won't need to whisper when they declare an interest in financial services. The job or role they dream of may actually exist in two years. Or the job or role may turn out to be something they never knew existed in their first days of a corporate-finance core course.

The new class of Consortium students, after the OP, will disperse and head off to 17 different Consortium business schools all across the country.  Of the total, over 130 have expressed some degree of interest in financial services, even if it is a tentative or preliminary interest. That number already suggests renewed confidence. In previous years, especially during the morale-plummeting crisis years, fewer than 100 dared to raise a hand to say they were interested in banking, trading or investment research.

Many of them, like other non-finance MBA students, are in career transition. Some are opting for finance after stints in other fields (non-profits, public service, engineering, or marketing).  Some are currently in banking or trading and will use the MBA (and what they learn in class) to leap from one segment to another (from, say, private banking to equity research).

No doubt they understand what they are about to take on.  They know this isn't the 1980s, when an MBA graduate Dartmouth could join Morgan Stanley's corporate-finance unit and plan to be there for 20-plus years and, with confidence, take steady, resolute steps to managing director.  They know it's possible Morgan Stanley may not exist (in the way we know it today) in 20 years. (Drexel Burnham, Bear Stearns, Salomon, and Lehman Brothers, favorite firms for MBAs in the 1980s, don't exist in 2013.)

They know they must plan a career in five-year segments. Even in finance, they know they must reinvent and rebrand themselves all the time and be willing to try something new when pushed against the wall. They know they must explore a variety of institutions, segments, roles, and options.  They know, too, the best opportunity may not be at Goldman or Citigroup, but could be at a regional investment fund, at a financial institution in Brazil or at a futures brokerage in Chicago.  If they don't know now, they will learn that roles in compliance, risk management and financial regulation are more valued by some banks than first-year jobs in M&A or on the currency desk.

MBA students in finance (including those at Consortium schools) tend to head to business schools with strengths in finance, where finance faculty are widely known and where finance recruiters swarm. They also head toward schools that already have a large concentration of students in finance. They want to be with others with similar aspirations or they don't want to be at a disadvantage. Like-minded students want to be with each other.

In this year's class, Cornell and NYU business schools will have the largest number of Consortium finance students. Michigan, Texas, Virginia, Yale and Indiana follow closely behind. These numbers are as expected, because these schools tend to support the largest numbers of Consortium students and some of them have historically attracted many students with an eye on Wall Street, banking, private equity, or investment management.

Students today, including Consortium students, are mindful to keep they must keep options open. When they are asked to indicate an interest before they start school, they will likely show many hands.  Many finance students will say they will pursue finance, plus something else. Often, that will be finance and consulting or finance and marketing.

Consortium students in the Class of '15 are similarly spreading their wings, while they have primary objectives. Over a dozen expressed an interest in venture capital and are likely aware of the difficulty in securing a position in a major venture firm, particularly one that resides on Sand Hill Road in Silicon Valley. Venture-capital firms hire MBAs from top schools and cherish candidates with strong technical experiences (and degrees), but are notably erratic in how they bring on whom they hire.

Another dozen or so are interested in investment banking. That wouldn't be unusual in any class. Despite the topsy-turvy world of investment banking (Who's laying off or reducing staff this week?), investment banking is still an important segment of finance, it will always be here, and there still remains the lure of working for such firms as Goldman Sachs, Lazard Freres, and JPMorgan.

Many more also say they will explore financial management, which captures areas from private banking and asset management to corporate finance at non-financial companies.  Others are interested in finance in specific industries:  real estate and energy, e.g.

The pairing of finance and consulting seems to be as popular as ever.  That might be a result of some students aiming for a particular firm experience (at, say, Goldman Sachs or Booz Allen or Blackstone), hopeful for an opportunity to have a prestigious, meaningful experience in their first few years and not necessarily loyal to a particular industry. Or they wish to be in an advisory function, which is what investment banking and consulting are about.

Not many expressed an interest in community banking, insurance, or financial brokerage.

Students willing to explore multiple concentrations also suggests a few more trends: (a) They know that the optimal dream job for an MBA graduate may not yet exist or is still in the making or (b) They may not yet be familiar with industry details to know they might be suitable for a certain segment. Many MBA candidates will learn over the next two years (or after they are hired by a financial institution) they are best suited for roles in risk management, audit, compliance or research.  The business-school experience is supposed to permit students to explore, get their feet wet in alien territory, and test new fields.

The daunting rat race of the recruiting process hastens the exploration effort, and that's unfortunate. It thrusts the new student into a boiling pot, where they must make career decisions overnight. Students declare where they will go to school in April or May, and by August, before they have sat through one marketing case study, they are swept into the helter-skelter pace of finding a summer internship.

For now, they get to explore, contemplate, and plan.

Tracy Williams

See also:

CFN:  Outlook for MBAs, 2013
CFN:  Consortium Orientation Program, NOLA-Bound, 2013
CFN:  Consortium Orientation Program, Minneapolis, 2012
CFN:  Consortium Orientation Program, 2011
CFN:  Consortium Orientation Program, Orlando, 2010
CFN:  Consortium Orientation Program, Charlotte, 2009