Stanford et al Set Sail – How to Navigate the New World of Business Education - Blog


Tempest in a tea cup or silent tsunami? In charting your career in the post-Financial Crisis era you are likely swayed by dueling theses: the cyclical thesis of a temporary dip and the structural shift of permanent industry change.

The ricocheting of theories can reduce any investment decision in your business education to more conjecture rather than conviction. After all, over 10,000 management programs now exist globally! Not to mention scores of online courses and un-accredited programs. In the face of a plethora of choices, changing admissions priorities and fierce competition at the top programs,how do you make an informed decision?

Could 3 simple, yet, essential gauges really keep you on track? This article and Crimson Oak’s upcoming 2013 Elite MBA Prep Webinar Series will assist in ensuring that your business career and education stay on course.

 

 

 

 

Arguably, the breadth of business education choices has only served to highlight the quality of top-flight programs. Corporations’ willingness to pay for well-educated professionals has also shifted to an almost bifurcated view: emphasizing either institution prestige or welcoming relevant job-ready curriculum / training. Long standing MBA-recruiting companies such as GE are ever more committed to finding prospects who “roll up their sleeves”.

This new found workman-like attitude of white-shoe firms, such as Goldman Sachs, is startling to many. Banks have overhauledperks, office location and overall compensation structure. After all, Utah and Cincinnati donot spring to mind when you think of Goldman Sachs banker, yet Goldman is actively relocating its workforce to those regions. Make no mistake, Wall Street traders & investment bankers are still compensated handsomely – there are just less of them. A recent Bloomberg article speaks to this new compensation world.

Within an overall depressed wage environment, distinction – even amongst top-tier business education programs - becomes paramount as a future executive. We suggest a simple 3-prong gauge to help you re-calibrate your business education decision making and is mapped against 3 premier MBA program initiatives.

 

1) FINANCIAL VALUE METRIC: WHARTON SOCIAL BANK

The almighty “money gauge” – the accumulated debt vs. the projected income figure - is top of mind for many across America. According to Forbes magazine, the average top 10 MBA program graduate makes over $120,000 in the first year of graduation. Five years after graduation the median salary is $200,000 for a top 5 MBA alum. The accumulation of student debt to secure a coveted program would seem like an after-thought best left for the middling mediocre to anguish about. But not so fast my future “Master of the Universe”, as UBS proves creativity doesn’t just stop at structuring collateralized debt obligations (CDOs) but also extends to creative capped and deferred compensation structures (IOUs). For the indebted, income, in particular cash income, is needed to finance the debt service of student loans becomes paramount.

The importance of cash income becomes more acute in certain scenarios. Firstly, within banking industry, banks are beginning to cap year-end cash bonuses and replace them with restricted stock, sometimes subject to claw-backs. Secondly, having a heavy debt burden upon graduating MBA program limits your career options: joining that exciting tech start-up looks a tad bit more risky. Thirdly, a USD denominated student loan burden, may be limiting for those considering international (developing nations) post-MBA opportunities, where the cash income may be devalued by the relative currency power. A simple metric of: total debt plus lost wages vs. total income in 5 years post-MBA is a useful gauge.

Innovation and extra reassurance has come in the form ofWharton start-up – CommonBond.com. The startup utilizes a web-based, crowd-sourcing platform to enable fellow Wharton alumni to extend loans to refinance their existing student loans at a lower rate ~ 1% lower than prevailing rates. Can we say Peer Pressure 2.0?


2) CAREER TRANSITION METRIC: STANFORD INNOVATION HUB

 

The choppy economic waters of the past few years have negatively affected two groups disproportionately: 1) recent college graduates ~22-27 years of age and 2) workers over 50 years of age. These two segments have traditionally looked to business education to facilitate a career transition. Career transition remains a primary driver for application to business schools. Learning to manage the ambiguity of the market and fostering learning agility in today's workers is paramount. The California incubator of MBA dreams, Stanford University, has done a spectacular job of career placement and offering new career routes. According to Princeton Review, Stanford ranked #1 with a “Career Rating” score of 99/100. Schools have beefed up on career counselors but many schools are still left without adequate resources. The 3-month post-graduate placement figure coupled with the incoming class composition vs. the employment industry composition will help you to evaluate the School’s effectiveness at placing career switchers.

The Stanford Innovation Hub represents the hub of dreams. Like a doting parent the University diligently channels its resources at the Hub to keep its students professional goals alive. Most recently launching the Innovation and Entrepreneurship Certificate Program. Although there are no signs of professors dressed in tutus as the “Tooth Fairy”, they, with the help of engaged counselors and alumni, systematically breakdown venture or career assumptions utilizing a hive of cross-discipline communication and evaluation parameters. The Hub inspires students to be innovative in their career approach and clarifies their career pursuits in either the executive or entrepreneur camp.


3) ALUMNI DENSITY METRIC: HARVARD’S ALUMNI DATABASE

Density – not the sheer number- is the key factor in measuring alumni network effect. Alumni density in either a particular industry or location can be telling. For instance, Northwestern Kellogg alumni are known to dominate consumer staples marketing departments. Harvard Business School alumni make up an estimated 35% of private equity general partners. Geographic alumni density outweighing stronger national brands can be found. For example, University of Miami and Florida State University are renowned in Florida and wield an inordinate amount of influence state-wide. The metric of number of alumni / per capita can be applied to city or the industry to gauge the potential network effect.

Having a large number alumni is not enough to help you with your career. How does the school utilize its database? Harvard Business School has one of the most robust alumni databases. The alumni database is supported by social media, community events and high value content. Technical aspects of the database are also impressive. It utilizes the latest interfaces for easy functionality, rich data on each profile and flagging of interests or advisory status for ease of connection. Who knew that something as moribund as a “database” could be re-positioned as a strategic advantage.

 

DRASTICALLY DIFFERENT DESTINATIONS


A few slight degrees off course today could lead later to totally different career destination reached tomorrow. The theory of “pathway dependency” rests on this observation. While no career is linear, professional advice, training and platform selection (your choice of firm or school) will assist in you reaching your ultimate career goals. Use these three simple gauges to stay on course. Grow & Lead.