This morning’s Wall Street Journal reports that Darden ranks tenth nationally among B-schools, in a poll based on the views of corporate recruiters, up from #13 previously. Darden also ranked fourth “most improved” among the entire field. The Journal reports that recruiters were heavily influenced by student interviewing skills, factual mastery, and positive “attitude” (leadership, healthy motivation, and lack of arrogance)—these are attributes that the Darden MBA program develops in its students. As I have written in previous blog postings, our students live the Darden brand of “high touch, high tone, and high octane” professionalism.
The lead article in the Journal poll says, “With demand growing for M.B.A. graduates, it is a seller’s market out there.” Average starting salaries for M.B.A.s have risen for the past three years. I have emphasized that with projected rapid growth of the global economy, this is an excellent moment to get an MBA.
As the demand for MBAs has risen, so has the supply. With the proliferation of MBA programs, many people wonder whether the MBA is retaining its value. The Journal reports that half the recruiters think it is retaining its value. Another quarter have no opinion. And a quarter said they “believe the value of an MBA has diminished”—a response contrasting with the fact that they still recruit at B-schools. The angst about the value of the MBA has been with us for years and is a result of the incredible success of MBA programs. Still, my counsel to all prospective applicants is to reach for the highest quality possible and invest in careful due diligence research on the various programs.
Consistent with the angst, yesterday’s New York Times published an article reporting several cases of young hedge fund managers who have no interest in going to business school. It seems that they are making so much money that “an M.B.A. is a waste of money and time—time that could be spent making money.” The half-page photo is of a 28-year old who founded a hedge fund and earns a seven-figure income. The headline to the story is “Bye, Bye B-School: Hedge Funds and Private Equity Alter Career Calculus.”
Whew. I have never thought of education as a “waste.” But consider some background:
**This is not news. I’ve been a business academic for 25 years and have heard such expressions annually, especially clustering at the tops of economic cycles. In the early 1980s, we heard these views from oil-and-gas deal-makers in Texas. Then it was junk bond underwriters at firms like Drexel Burnham Lambert. Then it was derivatives hotshots at large banks. Next it was tech inventors in the 1998-2000 Internet boom. What goes around comes around. Lots of the hot businesses have come and gone. And when the businesses go, the hotshots become career changers who can benefit from what an MBA program offers.
**It shouldn’t be just about the money. At Darden, we want to graduate people who have impact on the world of practical affairs. Most of these will go on to create a lot of wealth for themselves and others. Some will serve as leaders in government, the military, and not-for-profit organizations. But virtually all of our graduates understand that a business career is about much more than creating a large pile of money. It is about building an enterprise, delighting customers, designing new products and services, recruiting and retaining great employees, organizing the work, and serving investors. Business is not just about “me.” A related point is that business is not just about “now.” A good MBA degree program arms one for success over the long term and for a variety of career moves.
**This is not representative of the applicant population we see. The reporter quotes just six twenty-something hedge fund managers and then implies that the career calculus for everybody is now like this. The fact is that a large portion of the students attending Darden and other highly-ranked b-schools consists of career-switchers, people who want to make a better life for themselves and yearn for the education to do so. A good MBA program can be an excellent means of helping highly talented people find the most rewarding pursuits. If you already know what that pursuit is, then go after it. But our experience shows that most twenty-somethings still seek it.
**This is not consistent with the evidence we see at Darden. Our school has experienced very large increases in applications and a very good placement rate for our graduates over the past two years. If there were angst about the value of an MBA among applicants and recruiters, we would know it.
One could offer much more comment, but enough already. The story is told that a newspaper mistakenly reported the death of the American author, Mark Twain. Twain wrote to the editor that “reports of my death have been greatly exaggerated.” One might say the same about the value of an MBA.
Posted by Robert Bruner at 09/17/2007 08:34:45 AM