A B-School Dean Is Going To Jail
Maria |
March 22, 2022

We are all aware of how significant and important rankings are in the world of b-schools, especially for those in the industry and pursuing an MBA, to the point where someone has committed a fraudulent act by manipulating their rating just to be on top of the game.

In this episode of Business Casual, John, Maria, and Caroline discuss Moshe Parat of Temple University’s Fox School of Business in Philadelphia, who is in his mid-70s and was recently sentenced to prison for data manipulation, as they unravel the story behind how the former dean was busted.

Episode Transcript

[00:00:07.570] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co host Caroline Diarte Edwards and Maria Wich Vila are going to talk about an unprecedented event that just occurred. It is the sentencing of a former business school dean for cheating on the rankings. This is the first time a College official of any kind has actually been prosecuted by a federal prosecutor, convicted and now sentenced to jail for lying on the rankings. In this case, the dean was Dean Moshe Parat of Temple University’s Fox School of Business in Philadelphia. If you’ve been following this case and we’ve written many stories about it, you’ll know exactly what happened. And in effect, he basically inflated the percentage of students who were enrolled, who submitted this standardized test and inflated the GMAT score for the entering class. And by doing these and other things, ended up getting a number one ranking for four straight years for their online MBA program in US News. But the school in Parat cheated on a number of rankings in addition to its online MBA ranking. But the big deal was getting at number one list, which of course, attracted a lot of potential students into the program.

 

[00:01:44.160] – John

So Dean Parat was sentenced to 14 months in federal prison, also three years of supervised probation, a quarter of a million dollars fine, and 300 hours of community service. That sounds rather severe, but when you read what the judge said to him at the sentencing, it’s kind of interesting. He said this could be my first case where from start to finish, I was never given one word or gesture to hang my hat on to be able to say that the defendant has had some remorse or that he accepted some responsibility. A constant theme coming from Moshe Parat is that he did nothing wrong, that he was betrayed by his subordinates. Any such assertion, which I’ve overheard in his comments and in his smirking from counsel’s table, is insultingly, silly, and it is contrary to all of the evidence that the court saw and that the jurors based their decision on. So what did he really do? He lied to a magazine. Do you think it’s fair that this guy who is 74 years of age should be going to jail?

 

[00:02:59.570] – Caroline

Well, I think he’s been made an example of right, because it’s not the first case of fiddling the data, quite frankly, but he seems to be extremely blatant about it and unrepentant. So if you play things differently, perhaps he would have got off a bit lighter. But I think the government wanted to send a clear message to schools that this is a serious offense, that people make important decisions.

 

[00:03:27.750] 

Right.

 

[00:03:27.990] – Caroline

Important life decisions based on the information that’s published about schools. And they decide which program to apply to. They may just decide which program to attend based on some of that data. And so it’s misleading people in a way that can have a significant impact on people’s futures. So, yes, it is serious, and I think it sends an important message to schools that honesty is very important here, and it’s not a game. It’s critical information for the market and for their customers, and that they need to understand that the integrity of the data is very important here.

 

[00:04:15.110] – John

Right. And the university itself has already stated that it lost a minimum of $17 million in remediation cost. This occurred through fines. It had to pay lawyers that had to hire settlements with students who filed the class action suit claiming that they were defrauded. So the University had put out a minimum of $17 million already. Maria, what do you think?

 

[00:04:44.020] – Maria

I mean, yeah, I think before we started recording, we were saying, well, is it worth it to go or does it make sense that someone would go to jail simply for lying to a magazine? And I think people lie to magazines all the time, but those things have no real repercussions. For example, if a Hollywood starlet claims that for a fifth birthday in a row that she’s 29, it’s her 29th birthday, or if a certain action star claims to be six foot two when they’re really five foot eight, like, okay, that sort of stuff happens, at least in the Hollywood world all the time, but there are no real consequences. I think in this case, the deception. First of all, it was clearly something that had to be orchestrated. Right. There had to be some sort of premeditated thought to go into this level of deceit. It wasn’t like, oh, I misspoke, and I said I was 29, but I’m really 47. No, it was a very significant amount of effort that went into this level of fraud. And as Caroline pointed out, people make decisions based on this. They chose to go to school.

 

[00:05:43.650] – Maria

They were paying. I believe the tuition for the online program was around $60,000. That’s quite a bit of money to pay for a school that you think you’re getting the number one online program and you’re really getting something that is a far lower quality. So I feel terrible for the school. I almost wonder if the school will now sue, if they haven’t already, if they will sue this person saying, look, we had to pay $17 million because of your individual fraud. And so maybe I think you said it was like 14 months or something, but we want you to give us some more money back because I feel bad for all the hardworking people at that program. I feel bad for the people who went to the school. There’s a lot of collateral damage as a result of this. And it’s pretty sad.

 

[00:06:33.770] – John

Yeah. And it does speak to how serious it was. It was an orchestrated campaign to cheat a statistics professor was actually asked to reverse engineer the rankings to see what would happen if they were able to, or if they simply reported stuff that they didn’t have, and what impact would it actually have on their ranking? And then they falsified a number of metrics to make sure that they were number one. And they were number one in 2015, 2016, 2017, and 2018, until they basically were forced were to go back to us due to say, hey, we made a little mistake on their data, never thinking that by admitting a simple mistake, which was not a mistake, it was deliberate, that the whole thing would unravel because then the university called in a law firm to investigate and law firm found outright fraud. And that led to one thing after another. But one of the interesting things in the case is why the US prosecutor decided to go after the Dean. It’s never been done before. And it turns out that the former Dean can blame himself for this. He was so arrogant, so smug that he filed a defamation lawsuit against the University after he was fired from his job.

 

[00:08:03.050] – John

And that suit required a fair number of depositions to be filed and people to be questioned. And the depositions were incredibly damaging to him and revealed the extent of the fraud. More than that, his deposition, which was videotape, caught him in a number of contradictions and outright lies. And it’s those lies and the arrogance that the former Dean showed that basically convinced the prosecutor to go after him. So his own arrogance and his own refusal to accept any responsibility and instead to blame others for this. And then the file lawsuit against the University is actually what caused the prosecutors to go after him, which I think there’s a lesson in this.

 

[00:08:57.750] – Caroline

I was just going to say I’m sorry.

 

[00:08:58.720] – Maria

I thought you were done. I think the lesson is to look up the definition of the word defamation before you sue someone for it, because it’s not defamation. If it’s true, what would be picking. I’m sorry. I didn’t mean to drop down. I really thought you were done.

 

[00:09:12.210] – John

No, that’s that he actually did it. It’s kind of unreal. It’s just crazy. He sued the University for $25 million, and it just totally unraveled him and got the US government after him because the prosecutor read his deposition and read the other depositions, and it was clear he was guilty of sin. They went after him. Lord knows what his own defense cost him already. I’m imagining it cost him an awful lot of money because he hired a very high powered attorney in Philadelphia to defend him. And frankly, I think the attorney did a disservice to him. He should have convinced the Dean to basically throw himself at the mercy of the court. And instead of arguing that he was innocent, he should have argued whether or not this is a federal crime. And they could have focused their defense on more technical legal arguments. Instead of pretending that this guy was innocent, when he was clearly not innocent and had no grounds to claim that he knew nothing about this and he himself was betrayed. It’s really remarkable. Now, we do know Incidentally and this has happened before, that different schools cheat on rankings. Even when they don’t cheat, they report numbers in the most favorable possible light by reinterpreting questions that are asked.

 

[00:10:51.210] – John

So when the questions on these surveys are not ironclad and allow room for interpretation, you can bet that the school will interpret the question in a way that allows the school to provide an answer that’s more positive to it. And then there’s also for some of these rankings where they actually survey alumni or students. On a number of occasions, schools have been caught basically lobbying their students to fill out the surveys in the most positive way, which always goes to the point that we’ve made in the past. Rankings are incredibly limited. They’re flawed and perfect, and people pay way too much attention to them. And I think this case, if anything, above and beyond the tragedy that it is for the school and the former Dean, who I said before, 74, actually is 75, and he has a number of illnesses, apparently, and his wife is ill and in a wheelchair, and he is her primary caretaker. So it’s really tragic that this guy’s arrogance led to his total downfall, but it is what it is. And I think it will send the message to other schools. As you point out, Caroline prosecutor wanted to make an example of them.

 

[00:12:11.580] – John

And I think that’s really true. Wouldn’t you think now, Caroline, that any admissions director or Dean who’s tempted to cheat on the rankings would never do it?

 

[00:12:22.210] – Caroline

I think it’s definitely going to be a case that sets an example and will be taken note of. I’m pleased because when I was an incident, I was responsible for lots of data sufficient for rankings. And frankly, it was the bane of my life because it took a huge amount of time. And it’s often frustrating because we were incredibly scrupulous in the data that we provided, and we had suspicions that some other schools weren’t. And that’s incredibly frustrating. And I think one good thing, for example, about the Financial Times ranking is they do actually go around and audit the data, and they go and store their staff at the schools, and they go through everything. And I think that ensures a certain quality of data, which may not be the case in all rankings.

 

[00:13:20.830] – John

Yeah. Ft is the only major ranking organization that actually does audits every three years of the school’s data, which is admirable. That raises a whole other question. To what extent is US News responsible for ranking the school without auditing any numbers, without the kinds of checks that the Financial Times does? And should US News bear some responsibility for basically creating a system through which a school can manipulate its data and therefore get ranked more highly by US News. Maria, do you think that there’s some culpability here on the part of US News?

 

[00:14:05.470] – Maria

I appreciate the trapped and leading way in which you’re trying.

 

[00:14:11.950] – John

To say.

 

[00:14:12.570] – Maria

Yes, let’s burn them to the ground. No. I mean, look, I think US News at a certain point, you just have to trust that if you’re asking people for their average GMAT scores, that they’re going to give you something honest. I mean, I think the fact that US News itself, as far as I know, was not sued as part of this or if they were, I’m assuming.

 

[00:14:32.000] – John

No, they were not.

 

[00:14:33.060] – Maria

Right. And I think if they would have tried, I think that would have been dismissed. I do think, though, that there is, as we’ve talked about before, the culture of trying to massage the rankings. Right. So I don’t think that necessarily outright fraud may be occurring at other schools. But I definitely think that there may be situations where maybe a candidate with a lower GMAT score. And if you take the GRE that way, we don’t have to include your lower score in our average GMAT. Like, maybe that will be better for you or one of my personal pet peeves. When schools try to really inflate how many people are applying to their school, they’re not lying about how many people are applying to their school, but some of them, I think, are engaging in less than savory practices in terms of making it sound like on their webinars or whatever, like anyone can get in, you can get in and you can get in. And I do think that schools sometimes are a little too they sort of mask how competitive the process is in their quest to get as many applicants as possible and therefore drive down the acceptance rate, knowing that the acceptance rate is seen as sort of a badge of eliteness of the school.

 

[00:15:43.360] – Maria

So I definitely think that whether or not peace schools consciously do it or not, I think they definitely try to do things like this with some rankings in mind. Whereas if the rankings do not exist, I like to think that they would focus on other ways to prove their quality.

 

[00:16:00.070] – John

You know, there’s that old saw about the child who puts his or her hand on the stove and after being burnt once, never does it again. And I do think that this decision and the fact that this former Dean is going to end up behind bars is going to have the same effect. People who are attempted even to massage data make shy away from it, knowing that the consequences of it are that severe, that high before, it was just, okay, well, maybe I’ll get caught, maybe I won’t. What difference does it make? But boy, if you have the federal government after you forget it, you’re not going to take a chance and do something stupid like this. The other thing that Bear is pointing out is while there’s a lot of schools that do this here and there, they never do it to the extent that they get named, number one, that their program is actually at the top of the list. And then when it’s done, it’s often not done for so many years. So this was truly an extraordinary case and one that directly involved the Dean in a few other cases. For example, Tulane’s business school a number of years ago was caught cheating and the Dean was not implicated in the scandal.

 

[00:17:21.220] – John

It was more like the admissions director was who was reporting the data, and he was simply let go quietly. But it didn’t go straight up to the top of the business school like this one did. So it is an extraordinary case. It’s an unusual case. And this poor guy is going to end up in jail. Now as a result, on some level, I actually feel sorry for him, even though let me just tell you, he was a real bully. He was a micromanager. People who worked for him were afraid of him. He’s just not a nice guy. And the prosecutor was seeking up to eleven years in jail and a restitution of something like five and a half million dollars plus the quarter million dollars fine. So they only got 14 months. But I think that’s enough, really, along with the probation, the quarter million dollar fine, and as we pointed out before, the years of community service that he would be required to have. It’s interesting, when you hear what he said to the court generally at these proceedings, you plead for some sort of mercy and you basically say something that’s going to convince the judge to give you a little bit of a break, for goodness sake.

 

[00:18:49.330] – John

Instead, this guy just said, hey, I’m not sorry. In fact, I need to help my wife because she’s not well, and so therefore you shouldn’t send me to jail. Not a convincing argument. Not at all. Anyway. Any last words?

 

[00:19:15.310] – Maria

I have a question, actually. So, John, because I actually pulled up the article that you wrote when they first came out at the top of the rankings, and you actually wrote an unlikely winner, claimed the top spot. And so I’m just wondering, I guess you feel sorry for him because of some of his personal circumstances, right? If this guy were like a fit 27 year old who’s single and a bro, maybe you’d be like, whatever, it’s fine. It’s a year in prison. But how did you feel as a journalist when you I mean, didn’t you feel a little bamboozled by this?

 

[00:19:47.950] – John

Yeah, sure. Because while I reported with some skepticism and then got into some of the numbers and showed how they were, when you compare them to other competitors in the field, competitors with bigger brands, greater prestige, better faculty, better students, and his numbers are better than a UNC and Indiana. It just didn’t make any sense. So, yeah, I felt a little bamboozled, too, because even though I pointed that stuff out and was skeptical about some of those metrics, I still didn’t imagine that they actually cheated and just created them out of nothing. So that was pretty amazing. Here’s what Parat said when he addressed the court for the first time. I’m 75 years old, truly in the Twilight of my life and experiencing systemic illnesses. Not only the heart, but the diabetes is very serious, he said. And I am the primary caregiver of my wife, who suffers a myriad of ailments after a tremendous career of helping premature babies. But she cared for and supported me for nearly 52 years. She badly needs my support and I need hers. We have very little time left on God’s Earth to help others and provide some joy to our six young grandchildren.

 

[00:21:18.570] – John

It is my humble request that you will allow me to help Rachel and others less fortunate than us in the community. And that was his statement. No remorse, no responsibility accepted. Rather, he allowed his false claims that others betrayed him and submitted these numbers not on his behalf, but on their own behalf. And he had no knowledge about it. Nothing had nothing to do with it. This is what he said to get mercy from the judge. It obviously didn’t work.

 

[00:21:58.150] – Maria

Yeah, I don’t feel sorry for him at all. Sorry, John. I don’t feel sorry for him at all. Right. This is not a victimless crime. And yeah, you mentioned a second ago, Indiana and UNC, they also suffered because they got pushed down in the rankings unfairly. So it’s not a victimless crime. And if this guy really is in the Twilight of his life and thinks he’s going to meet God soon, all the more reason for him to leave a God-fearing life and use this as a chance to repent. So for him to dig in his heels and be like, I’m in the twilight of my life, buddy, all the more reason to maybe reconsider that whole repentance thing, whatever. I’m just saying different strokes for different folks. But if your wife depends on you, all the more reason to live by the street and narrow and not try to end up in jail.

 

[00:22:46.210] – John

Yes.

 

[00:22:46.850] – Maria

Sorry.

 

[00:22:48.250] – Caroline

I do think that it is surprising that US News doesn’t do more, though, to audit the data because it plays such a significant role in the market.

 

[00:22:58.050] – Maria

Right.

 

[00:22:58.310] – Caroline

Those rankings and perhaps even more so at the undergraduate level. And it plays a huge role in determining where people apply and the market dynamics. And to me, it’s shoddy journalism that they’re not doing more.

 

[00:23:20.990] – John

In fact, because you mentioned the undergraduate rankings in the last couple of weeks, there has been a professor at Columbia University, which was ranked number two by US News overall as a University, not just a business school, but the professor basically says it’s all based on false data. And this is a professor at the university itself who’s making these claims about Columbia University’s rise in the US news ranking. So there you have it. If anything, here’s the takeaway and we’ve said this before, it needs to be said again, treat these rankings with one big grain of salt because whether or not a school cheats, the methodologies of these different rankings hardly get close to measuring the true quality of an education. Yes, there’s some entertainment value if you parse the numbers, you might get some good data to use to help inform your decision about where to go or whether to accept an offer. But don’t just think that because the school is ranked three and another is ranked six and you got into three, you should be going to three. That’s the big takeaway. All right, Caroline and Maria, a pleasure as always. And for all of you out there, good luck on your MBA journey.

 

[00:24:48.830] – John

This is John Byrne with Poets and Quants you’ve been listening to Business Casual.

 

The Economist Dis on MBAs: Is the Degree Still Worth It?
A B-School Dean Is Going To Jail
Maria |
March 22, 2022

[00:00:00] John Byrne: Well hello everyone, this is John Byrne with Poets and Quants, welcome to Business Casual, our weekly podcast with my co-hosts Maria Wich-Vila and Caroline Diarte Edwards. Today we have a special guest, Heidi Hillis from Fortuna Admissions. She is based in Australia, is a senior expert coach for Fortuna, and has three degrees, all from Stanford, a BA in English literature, that’s my degree, an MA in Russian studies, and an MBA from the Graduate School of Business. And we have Heidi here to discuss some really fascinating research. Here’s what Fortuna did. They dug into the last Two class profiles of the Stanford Graduate School of Business.

That’s the class of โ€˜23 and the class of โ€˜24. They looked up all these folks on LinkedIn to identify a little bit more about their backgrounds, including their former employers and their places of undergraduate education to come up with an incredible analysis. Heidi, welcome.

[00:00:46] Heidi Hillis: Thank you. I’m glad to be here.

[00:00:48] John Byrne: Heidi, what is, what are the big takeaways from your deep dive discovery?

[00:00:54] Heidi Hillis: It’s hard to know even where to start. I think there’s a quite a few interesting kind of trends that we’ve seen that have taken place over the years. We were mentioning before the call that traditionally there hadn’t been, 10 years ago, if you’d looked, you wouldn’t have seen so many tech companies represented, but now there’s a big presence of tech companies who are feeding a lot of these MBA programs in Stanford in particular.

I think that the thing that was really interesting was, looking, not just at where the companies that were feeding the students, the applicants to Stanford. When they were working there, when they were applying, but actually the paths that they took prior to their current job.

So how many people were working, if you look at McKinsey, for example, or Bain and BCG, those are obviously companies that feed a lot of applicants to the program, but we found 20%, which seemed to be normal of, the class came from consulting, but if you actually look into the numbers in their background, You would see that actually 37 percent of these two classes had worked at McKinsey sometime prior, or actually in consulting, so it was, it’s The kind of the patterns that are behind, what you would normally see in terms of what Stanford tells us.

So you get a sense of the paths that people have taken. And so that’s something that was really interesting to see.

[00:02:16] John Byrne: Absolutely. And of course, this is this analysis goes so far beyond what any applicant would learn by simply looking at the class profile that the school up because, this level of detail is never available to people.

[00:02:33] Heidi Hillis: No, and yeah, for example, you could see that, Stanford will say that they have around, each year around 50 percent of applicants are international, which is a great statistic and gives you lots of hope if you are an international student. But when you dig into the numbers, you actually understand that.

75 percent of the people who get into Stanford actually went to a U. S. University. So even if you’re international, it does have does seem to have kind of an advantage of having been educated in the U. S. That seems to be something that they look for. However, I think. The concentration of universities in the U.

S. that are feeding to Stanford is something also that, if you’re looking at it, you might find a little bit dis, disconcerting. There’s a few programs that are really, obviously the top. Programs as you would expect places like Harvard, Stanford, Yale, the Ivies but if you look at the international universities very diverse from all over the world, really lots of people from different places, which is also really interesting.

[00:03:38] John Byrne: Yeah I tell you, one of the things that struck me in the data is how consistent it is. 10 years ago, we did the same exercise at Stanford and a bunch of other. Schools from Harvard and Dartmouth and Columbia and talk and a few others and back 10 years ago, we found that 25. 2 percent of the class of 2013 were from Ivy League colleges.

And the Ivy League 8 schools, not including Stanford. And if you included Stanford, it would have been 32. 6%. So now, let’s move forward to your data. And in 23, 30. 7 percent went to Ivy League schools, even above the 25. 2. And in 24, 27. 9 percent went to Ivy League schools. So it looks like Stanford has gotten even a little bit more elitist than it was.

Yeah,

[00:04:41] Heidi Hillis: It’s, it is it’s what the data says, right? Obviously, this is a sample. We have 80 percent of the two classes. So we don’t know where those other people went. And that might skew the data a little bit in another direction. But it is, if you look at there’s 15 schools, that include the Ivy’s and then you have UC Berkeley and obviously Stanford that really are contributing, 49 percent of the class of 23, 47. 3 percent of the class of 24. So that is a pretty heavy concentration and But, if you actually look into the data, you see a lot of people also, each of these is actually an individual story.

You see a lot of people who come from other schools as well. So it’s not like you have to give up hope if you come from a different school. I see a lot of individual stories that, from the whole range of U. S. schools that really are feeding into Stanford. So I think what the data doesn’t also tell you, unfortunately, is how many of these Of people from these backgrounds are actually applying.

So

[00:05:39] John Byrne: good point.

[00:05:40] Heidi Hillis: It’s it’s hard to know. And sometimes I think people this is. A path that a lot of people who go to these schools plan to take from the very beginning. So I would see, it would be interesting to know that I don’t know that we will ever find that out. But, um, that’s something to keep in mind as well.

[00:05:56] John Byrne: Yeah. And that’s a fair point. Because how reflective are these results of the applicant pool reflective of an elitist attitude probably a combination of if I had to guess, but, it is what it is, and these institutions obviously are great filters, so you come from McKinsey, Bain, BCG, and you go to Harvard or Stanford or Penn, and you pass through a fine filter, and it makes you less of a admissions risk than if you went to, frankly, the University of Kentucky and worked for a company that no one knows of.

That’s just the reality of elite MBA admissions, right?

[00:06:40] Heidi Hillis: Yeah. And so you will see that the people who are not going, you’ll see a lot of the people who you would, the profiles that you would expect, the Harvard undergrad that then goes to Goldman that then was working at a PE firm.

That’s a really typical profile that you’ll see. But you’ll also see some really, unique and interesting ones, which I think, Okay. Helps you understand that if you don’t have that path, you also have a real chance at these schools, and maybe even more of a chance, again, not knowing, how many of those Goldman P.

E. Harvard grads are applying. So I’m thinking of the guy that I saw who he went to UPenn undergrad, studied engineering, started out a kind of pretty typical path working in private equity, but then made a big pivot to work for go to Poland where he was working in a real estate investment firm and the head coach of the Polish lacrosse team.

So you have really interesting profiles like that, that you can see that. aren’t necessarily taking that typical path. And sometimes that really does help you stand out.

[00:07:42] John Byrne: True. Maria, what surprised you most about the data?

[00:07:48] Maria Wich-Vila: Wow. I think we already covered, the, one of the biggest ones was the number, the percentage of people who would had some sort of either their undergraduate or graduate education within the United States.

Intuitively, I had felt that was true. And sometimes when I try to, give some honest, tough love to applicants from certain countries, and they’ll say, oh, but Maria, I think you’re being a little too pessimistic. After all, X percent of the applicants at these schools are international, and Y percent are from a certain geography internationally.

I’ll say yes, but that doesn’t mean that they’re all Solely from that area. A lot of them are, do have significant international educational experiences. I think another, speaking of the international piece the percentage of people who had significant international work experience as well was something else that really jumped out at me.

Because it would signal to me that Stanford really does value this global perspective both within probably its domestic applicants and also its international applicants. So I thought that was also a really interesting piece of data that jumped out at me.

[00:08:52] John Byrne: Now remind me what percentage was that?

[00:08:56] Heidi Hillis: People who are international

[00:08:58] John Byrne: who have had international work experience.

[00:09:01] Heidi Hillis: I think it was 30%.

[00:09:02] Caroline Diarte Edwards: Yeah. Yeah. Yeah, it’s pretty

[00:09:04] John Byrne: impressive.

[00:09:04] Caroline Diarte Edwards: 30%, which I was thrilled to see. As well as coming from in Seattle and Europe. Obviously the international schools put a heavy emphasis on international experience and I hadn’t fully appreciated that. A school like Stanford would also.

really value that to the same extent. And it’s great to see that candidates are making the effort to get outside of the U. S. and get international experience because I think you gain so much from that exposure. And you bring more to the classroom if you’ve got that experience. I know that both Maria and Heidi.

I’ve worked outside of the home countries as well. Pre MBA and I think that you just have so much more to contribute to the whole experience. And it was great to see that 30%.

[00:09:50] John Byrne: What else struck you, Caroline?

[00:09:53] Caroline Diarte Edwards: We talked about the concentration of academic institutions, and I was also surprised about the concentration in employers.

So while there is a very long list of employers where the students have worked pre MBA when you dig into the career paths that they’ve taken there is some interesting concentration. Heidi had noted that the reports that There are 26 companies that account for nearly one third of the class in terms of where they were working right before Stanford.

But when you look at their whole career history, those same 26 companies represent over 60 percent of the class. So that is, yeah, that’s quite extraordinary that so many of the class have experience of working at quite a short list of companies.

[00:10:46] Heidi Hillis: I think that’s reflective of, if you really think about it, you have a lot of these companies.

You’re talking about the Goldmans and the Morgan Stanley and McKinsey that have really large programs that recruit out of undergrad that are really training grounds for. A lot of people that then on to do, work in industry or go on to work for in finance in particular, a lot of people starting out at some of these bulge bracket banks and then going into.

Private equity or smaller firms. So the diversity within finance in terms of where they were working prior to MBA is quite large compared to consulting because there just aren’t as many consulting firms, but a lot of people in financing, a lot of different firms, but they, a lot of them really do start out in these training programs, these analyst programs that are so big and popular.

[00:11:34] John Byrne: Yeah, true. And looking back, I did this exercise as well. The feeder companies to Stanford 10 years ago in the class of 2023, 22. 8 percent from McKinsey, Bain, BCG, and your data, 22. 5 percent work there. Incredible consistency over a 10 year period. When you look at the top six employers 10 years ago, they were McKinsey, BCG, Bain, Goldman, Morgan Stanley, and JP.

Morgan Chase. They accounted alone for 34 percent of all the students in the class of 20, 2013 at Stanford. In your data for 23 and 24 they account for 29. 8%, just a few percentage points less. So remarkable consistency. And I think you’re right, Heidi, this is a function of the fact that these firms bring in a lot of people who are analysts and actually expect them after 3 to 5 years to go to a top MBA school.

So there’s a good number of them in the applicant pool to choose from and let’s face it, they’re terrific candidates.

[00:12:46] Heidi Hillis: Yeah. I think another pool of really terrific candidates that you see, and I don’t know what the 2013 data was saying, but is the US military, which is really, I think, again, something that I felt having worked with lots of military candidates myself, understand that, Yeah, intuitively, I would have expected, but to see it in the data is actually really interesting.

You just see Stanford in particular, I think, is really looking for leadership potential, and it’s so hard to show that as an analyst, as a consultant, but as in the military, these people have such incredible leadership experience that it really helps them to stand out.

[00:13:23] John Byrne: Yeah. And let’s tell people what the data shows.

How many out of us military academies,

[00:13:28] Heidi Hillis: In all in total, we had, 20 over the two years. So that’s in the two classes that we found. So that’s, a pretty large number. And they come from all the different academies, right? So you’ll find them from different, not academies, in the army, navy and the marines.

So you’ll see that. And you also see quite a few, in the data we’ll, we see a lot from the Israeli military as well, but that’s actually a little bit difficult to because every Israeli does go into the military. So it’s they have that in their background. Any Israeli candidate would have Israeli military background as well, but again, that’s.

Place that people can really highlight their leadership. So you had eight people from who had been, who were Israeli and obviously had military experience where they were able to demonstrate significant impact and leadership prior to MBA.

[00:14:18] John Byrne: Yeah. In fact, 10 years ago, roughly 2%. of the class went to either West Point or the U.

S. Naval Academy. Good number of people actually from the military. Maria, any other observations?

[00:14:34] Maria Wich-Vila: Yeah, I was also surprised at the fact that within those top employers And when we look at the tech companies, it was Google and Facebook and Meta with a pretty large showing. Google was actually the fourth largest employer after the MBBs and, but then, I was expecting there to be an equal distribution amongst those famous large cap technology companies.

So I, I would have expected even representation amongst Google, Meta, Microsoft, Apple, Nvidia, Amazon, et cetera. And yet. Apple and Amazon only had one or two people each versus Google at 25. So I thought that was really fascinating and it makes me wonder if perhaps it’s a function of maybe Google and Meta might give their younger talent more opportunities to lead impactful projects, perhaps.

I’m just guessing here, but maybe Apple and Amazon perhaps are more hierarchical. And maybe don’t give their younger talent so many opportunities, but I was really surprised by that. I would have expected a much more even distribution amongst the those famous those famous tech companies.

[00:15:40] John Byrne: Yeah. You’re right. And I crunched the numbers on the percentages and Google took three and a half percent of the two classes and that’s better than Goldman, Morgan Stanley, JP Morgan Chase. Facebook had 2. 7 percent and Microsoft at 1. 5, and I was shocked at Amazon because, Amazon is widely known as the largest single recruiter of MBAs in the past five years.

At one point, they were recruiting a thousand MBAs a year, but in, in one sense, maybe Amazon quite doesn’t really have the prestige. For Stanford MBAs who might rather work elsewhere, I think that might be is, you look at the employment reports at a lot of the other schools and Amazon is number one at a number of schools and very low percentage of people from Amazon going to Stanford.

We don’t know, of course, how many. Leaving Stanford and going back to Amazon, but it can’t be that many.

[00:16:41] Heidi Hillis: I wonder if there’s something about just a proximity effect here. You have the plate, like the meta and Google just being so close to Stanford, maybe it just, attracts more people applying because they.

They’re almost on campus and maybe, just being Amazon all over the world and different places could be not attracting as many. I don’t know.

[00:17:03] John Byrne: Yeah, true. The other thing, the analysis shows, and this is what you also gather from the more public class profile is really the remarkable diversity of talent that a school like Stanford can attract year after year.

It is, it blows you away, really. The quality and the diversity of people despite the concentration of undergraduate degree holders or company employers, it’s it’s really mind boggling, isn’t it?

[00:17:33] Heidi Hillis: Yeah, they come from everywhere and really interesting paths and even the people I think that, have those kind of typical paths, you see a lot of diversity within them as well.

So I think, even if you’re coming from a Goldman or a McKinsey having lived in another country or gone to done a fellowship abroad or running a non profit on the side. These things are actually what helped them to stand out. But you do see some really interesting, I think, profiles, too, of people who’ve just done, you get a sense of what it would be like to be in the Stanford classroom.

People from really unique and different backgrounds. People who come from all different countries and lawyers, doctors people who have run, nonprofits in developing countries people running large programs for places like Heineken or Amazon too. But, it’s a real diversity of backgrounds.

[00:18:27] John Byrne: Now, Heidi, I wonder if one is an applicant. Is this discouraging to read and here’s why if I’m not from Harvard, Stanford, Penn, Columbia, Brown, Cornell, Dartmouth, and if I didn’t work for McKinsey, Bain, BCG, Goldman, Google am I at a disadvantage and should I even try? Some people look at the data and come away with that conclusion.

[00:18:52] Heidi Hillis: I think it’s a reality check for a lot of people. I think it’s just, it’s really, it just helps people understand, what it, the difficulty of this, why it’s so competitive, but I think that there is, again, behind the kind of the percentages, you do look at these individual profiles and I would get, I would actually take a lot of hope from it if I were looking, as an applicant, because especially if you are.

Maybe a little bit more of a big fish or small fish in a bigger pond or big fish in a smaller pond you go to Rice or you go to Purdue or, and you do really well, those are the people who, they’re definitely looking for that diversity of background as well as the international.

I think that’s really neat. think that, instead of looking at the data and saying, why not, why I shouldn’t even apply, it’s why not me look at these other profiles of people who have taken really unique paths that that do get in. So I think it is actually a Kind of a mix of both, it is a reality check for a lot of people, but it’s actually, there is so much diversity in the data as well.

I think also one thing that we haven’t really covered is about is just the prevalence of social impact in, that’s really taken hold of the class. I don’t, again, going back to your 2013 analysis, I’m not sure how easy it was to tell that, but a lot of you can see reflected in the both the types of organizations people are working for, but also their titles and the kinds of work that they’re doing that that there’s a huge 40 percent of the class of the two classes had some kind of social impact in their background.

Whether that’s, running their own nonprofit on the side or volunteering or. Running trans transformational kind of programs within companies that are, either in finance or consulting or in industry. That’s a big trend. I think that people can take heart from as well.

So if you’re working if you feel like you’re in an organization where you’re not getting the leadership that you. can use to highlight your potential for Stanford, that’s definitely a place you can go is working for in volunteer capacity for a non profit or on the board of a of some kind of foundation.

Those are the kinds of places that you can highlight your potential

[00:21:00] John Byrne: true. And I know we have a overrepresented part of every applicant pool at an elite business school are software engineers from India. And I wonder in your analysis, how many of them did you find from like the IITs?

[00:21:18] Heidi Hillis: That’s a good question. The IITs, it was again, it was one of these you have about 50 percent of classes internet, so 25 percent of the class. was educated outside of the US. The IITs are going to be up there. Let’s see from India, 2. 1 percent of the class came from India. So probably, I don’t know offhand exactly how many of those were IITs, but

[00:21:43] John Byrne: I’ve had a lot of them.

[00:21:45] Heidi Hillis: Yeah, probably a lot of them. Although I think, that’s the other thing is that people who come, to work with me from India, they feel like if they haven’t gone to IIT, then that’s going to be a disadvantage. But I think, you’ll find that there are, there’s representation of other universities as well.

Definitely.

[00:22:00] Caroline Diarte Edwards: Yeah, I was just looking at the list of undergrad institutions. And for example, you’ve got Osmania University from Hyderabad. So it is not, it’s not all IIT. Okay.

[00:22:12] John Byrne: Yeah, exactly. And Caroline, 1 of the things about the institutions that are really represented here and that I don’t really see unless I missed it.

I didn’t see a Cambridge or an Oxford. Two of the best five universities in the world. And I wonder if that’s just a function of fewer people in the applicant pool or what? What do you think that could be about?

[00:22:36] Caroline Diarte Edwards: I had a look through the uk Institutions and you have got cambridge in there.

I think I also noticed. Bristol university there are a few different universities. So i’m aston university, which is not it’s not on a par with Oxford or Cambridge. So I think that speaks to the point that Heidi made that you don’t have to have been to an elite school to get into Stanford.

Aston is a good solid university, nothing wrong with Aston, but it’s not it’s not one of the top UK universities. So there’s definitely some interesting variety in the educational backgrounds of the students going to Stanford. And

[00:23:16] John Byrne: then, yeah, it is if you’re a big fish in a small pond, like Afton, you’ll you could still stand out in the pool.

[00:23:26] Heidi Hillis: Absolutely. There’s a lot of really interesting background, you have look hard on blue and you have Miami University and some really smaller universities abroad. I think. Again, it’s really, if you look at that, it does give you hope because it’s really what you do afterwards and if you, obviously, if you come from one of these schools, you probably want to be in the top, 5 percent of the graduating class, you want to show that you have the GPA that can support an academic background that they feel comfortable that you’ll be able to compete academically, but, and maybe that’s what you’re Offset by the, the GMA or the scores, you don’t know, we don’t have those on here.

But, um, the path post university really becomes much more important in those cases. What you’ve done since then where you’ve, how you’ve risen from starting at a entry level position to, running a division or heading a country group or something like that.

[00:24:21] John Byrne: And as far as Cordon Bleu goes, every good business program needs a Cordon Bleu, for God’s sake, right?

You want to eat well at those NBA parties, don’t you?

[00:24:32] Heidi Hillis: Absolutely.

[00:24:35] John Byrne: Maria, I’m sure that was true at Harvard.

[00:24:38] Maria Wich-Vila: I wasn’t the one doing the cooking but I certainly, I was certainly a member of the wine and cuisine society where I happily participated in the eating and consuming a part of that.

But to, to the point that we were just recently talking about. regarding being a big fish in a small pond. Not only have I seen it personally with applicants that I’ve worked with who did not attend these elite universities, but even many years ago, I attended a, an admissions conference where Kirsten Moss, who was the former head of admissions at Stanford, she actually told stories about how they’ve accepted people who even attended community college.

But within the context of that community college, they had really moved mountains. And she said that one of the things that they look for is, Within the context and the opportunities that you’ve been given, how much impact have you had? So maybe you don’t have an opportunity to go to Yale or MIT or IIT for your undergraduate, but whatever opportunity you have been given, have you grabbed that opportunity and really made the most of it and really driven change?

So she specifically called out, I believe, I believe there were two students that year at the GSB who had both started their educations, their higher educations at community college. Anything is possible. It really is about finding the people who, wherever they go, they jump in and make an impact.

[00:25:55] Heidi Hillis: Yeah, I think that to that point, I think it can almost be a more difficult if you’ve gone to Harvard and then worked at one of these, gone on one of these paths because we know that there’s, that’s an overrepresented pool in the applicant pool to stand out among those to have had that, that pedigree sometimes can be a disadvantage, right?

If you haven’t done as much as you should have with that, or if you started at that high level to show that level of progress over the course of your career is actually a little bit more difficult. Okay. And coming from a community college and rising to, a country level manager in some places is actually puts you at a significant advantage, I would say.

[00:26:31] Maria Wich-Vila: Because it’s hard for those people, it’s hard for those people to stand out, but also I think some of them go on autopilot, right? I think some people are on this kind of achievement, elite achievement treadmill, where they’re not even really thinking about what do I want to do with my life?

They’re always reaching for whatever that next, what’s the best college to go to? It’s Harvard Princeton. Yeah. Okay. Now that I’m here, what’s the best employer to work for? It’s McKinsey, Bain, BCG and without actually perhaps stopping to think about what is my passion? What impact do I want to make in the world?

And so I feel sometimes those autopilot candidates, I feel a little bit bad for them because they’re doing everything quote unquote and yet sometimes when you speak with them, that passion just isn’t there. And I do think that may ultimately harm them in the very, very elite business school.

Admissions because business schools want people who are passionate because at the end of the day, in order to do hard things, you’re going to need passion at some point to get you through those low periods. And so I think that’s something business schools look for. And I do think that sometimes these.

These kind of autopilot candidates might sometimes be at a disadvantage.

[00:27:29] Heidi Hillis: Yeah, I think that, to that point look in the data, when you look at it, you see so many people who’ve gone to McKinsey, Bain, Weasley, or Goldman, but then there’s a, you see a lot of success for people who’ve actually pivoted.

So those pivots that are post The second or third job really do show you that, if you’re if you get a candidate who’s coming from, still at McKinsey, okay, that’s fine. They have to be the top 5 percent of McKinsey, like they have to be going to get so many McKinsey applicants that the only the, you can look at the data in a couple ways.

One is, oh, my God, they took 12 people from McKinsey and the others. Oh, my God, they only took 12 people from McKinsey, right? That’s So if you want to be one of those 12, you have to be the top 12 in the world, right? Whereas if you’ve gone to McKinsey and then done an externship at a health care startup and then moved on to be a product manager at for health at Google, that kind of a path is definitely showing a little bit more, maybe risk taking, maybe ability to follow your passions.

So I think that. When I see candidates who come to me, for example, and they’re like, not thinking about applying now, but maybe in a year or two, I say, look for an externship, maybe think about pivoting out of one of these places and looking for some operational experience.

And because you see in the data that works.

[00:28:42] Maria Wich-Vila: And they’re doing themselves a service not only in terms of enhancing their admissions chances, but even just in terms of determining, what do I want to do with my career? If I do eventually want to go into industry, what functional role do I want to have?

What industry do I want to work in? So it’s, it actually benefits them in the long term to do that as well, even if they don’t go to business school. I think those secondments and externships and second job, post consulting jobs are extremely valuable. Totally agree with you.

[00:29:06] Caroline Diarte Edwards: And I’m sure they also bring more to the classroom as well.

I would think that’s also why Stanford is selecting some of those candidates, because not only have they worked at McKinsey, but they’ve also led a non profit in Africa or worked in private equity or whatever it is. So they have much more breadth that they can bring to the classroom. And I think that It’s seen as a very valuable contribution

[00:29:29] John Byrne: in Heidi.

Did you see that? The majority of the candidates to examined actually did work in more than one place, right?

[00:29:37] Heidi Hillis: Yes, most of them did. There were very few that, you see working at one place. And I would say that those are people that would have really risen through the ranks.

Someone who’s worked at Walmart and become, started in, I don’t know, in one state, but then to become a regional manager and things like that really are going to onto a global role. The people who have stayed at one place really have shown significant career progression within that.

And then the other people I think you do see a lot of movement. The big. The most typical would be from investment banking to private equity and then you do find in finance, there’s a little bit less kind of movement into other industries. You see a lot of people staying within finance, but within finance.

Yeah. Yeah. The other industries, especially consulting or other, tech, people are really moving into other places and it’s becoming, it is a little bit difficult. We have these categories that we’ve talked about, for example, healthcare, but it’s hard to categorize some of these companies.

Are they healthcare? Are they tech? There’s a lot of overlap. And so everything’s a little bit of tech in something nowadays. So whether it’s finance and fintech or education and ed tech or health care and health tech, these are all merging and combining. It’s hard to categorize them.

[00:30:53] John Byrne: So looking at the data here I wonder if you’ve seen your old classmates in the sense that these new people are very much like the people you went to school with at Stanford. I

[00:31:05] Heidi Hillis: put this out and it’s really interesting to a lot of my classmates downloaded the report and read it. And a lot of them came back and said, oh, boy, I would never get in now.

It’s these people are super impressive. I think that you see a lot of. It’s just become more and more competitive. And I think that with more information and more people every year applying, it is becoming really difficult. I think that you do see a lot of, I am encouraged by the diversity part of it that you see still Stanford.

I feel like they do take risks on some really interesting profiles and candidates that maybe some other schools are less likely to do. And so that’s what does give me. A lot of hope when I get some kind of really nontraditional candidate who wants to, their dream school is Stanford. I feel like, I say all the time, there’s a 6 percent chance.

You’re going to get in, but there’s 100 percent chance. You won’t get in if you don’t apply. So you’ve got to, you got to give it a go. And that’s, the attitude that we take to it.

[00:32:04] John Byrne: Indeed. So for all of you out there read Heidi’s article on our site, it’s called who gets in and why exclusive research.

Into Stanford GSB and I’ll tell you one conclusion I have about this is that, man, if you really want to get into Stanford, you need a Sherpa, and and Heidi would be a great Sherpa for you because the, just the profiles of these folks, where they’ve been, what they’ve done, what they’ve accomplished in their early lives is so remarkable that To compete against, in this pool for a spot in the class you need every possible advantage you can get.

And and having an expert guide you through this trip probably would be a really big advantage. So Heidi, thank you for sharing your insights with us and the research, the very cool research.

[00:33:01] Heidi Hillis: Thank you

[00:33:03] John Byrne: and for all of you out there. Good luck. And if you want to go to Stanford, you got to check out this report.

Okay. It will inspire you to up your game, even if you are from Harvard, Stanford, Wharton, or wherever McKinsey, Bain, BCG, Goldman, Google, you want to look at this report and you want to really think about. What it will really take to get in. I think it will inspire you, motivate you to really put your best foot forward.

Thanks for listening. This is John Byrne with Poets& Quants.

Maria

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