At B-Schools, Sustainability Is The Hot Topic
Maria |
February 21, 2023

In this episode of Business Casual, our host John and his co-host Caroline, along with their guest David Marchick, the Dean of the Kogod School of Business, will discuss an interesting topic about sustainability from the perspectives of the corporate and academic industries, respectively.

The discussion will rotate on why companies are seeking out graduates with a strong understanding of sustainability issues and a commitment to social responsibility and why, naturally, this has led to an increasing demand for graduates with sustainability expertise, which results in many business schools responding by offering specialized sustainability programs and certifications.

Episode Transcript

[00:00:07.130] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual. Our weekly podcast. We have a special guest today, the dean of American University’s Business School, David Marchick, who is head of Kogod School of Business. David actually joined the school as dean in August of 2022, so he’s a newbie. He spent quite a few years at the Carlisle Group in a senior position and has also assisted in two presidential administrations the Biden administration more recently, and the Clinton administration way back when. And of course, we have my co host Caroline Diarte Edwards, who is the former head of Admissions at INSEAD and the co founder of Fortuna Admissions. We want to talk about sustainability. This has become a very hot topic in graduate management education. There are a number of schools that are doing things in this area. And David just returned from a recent AACSB meeting where societal impact and sustainability were the key issues discussed. So, David, I want to start with you and let’s go to the basic stuff. Now, some of this may be obvious, but it may not be obvious to everyone. Why is sustainability so hot?

[00:01:30.810] – David

First of all, thanks for having me. It’s great to hear your voice on a podcast because I’ve listened to about 50 of your podcasts. That’s someone that didn’t come from academia. When I was approached for this role, I listened to everything basically as a study guide. So thank you very much for what you do, and I’ve become kind of an addict to your podcast. So thanks very much.

[00:01:50.320] – John

Thank you.

[00:01:51.040] – David

It’s interesting. I’ll just give you a little history. I started the sustainability program at Carlisle in 2008. 2009, I would say a bunch of I rolls and yawns. A lot of folks said, what are you doing? Why are you doing this? And we hired one person who was the first Chief Sustainability officer in the industry, and we put out our first sustainability report in 2009. Since then, this sector of the economy has kind of exploded. The Ft actually ran an article yesterday that said that business leaders cannot hire enough people in sustainability. There’s just not enough qualified graduates. And so I’ve been engaged in the sustainability movement for many years. And when I got to Kogod, I realized that we had a great program that was on the cusp of being even greater. So basically, companies are taking a much more holistic approach to their role in society, both the impact of their company on the environment and the impact of the environment on their companies. The issue of supply chain is a huge issue, both not only in terms of diversification, but also human rights in the supply chain. The issue of race, class, and gender and their products diversity are part of sustainability. And so companies are increasingly investing in this space. Their shareholders are demanding it, their employees are demanding it, and it’s going to become a much larger part of the ecosystem in businesses going forward. So that’s why it’s important.

[00:03:26.850] – John

Do you think business schools have lagged in adopting more coursework and embedding in the current world sustainability issues? Have they lagged business?

[00:03:39.690] – David

I think yes. I think academia moves slowly, as you and Caroline know. My sense is that the industry and investors are way ahead of academia, and academia is running hard to catch up. At Kogod, actually, we’ve had a sustainability program for ten years, so it’s part of the DNA of American University. We were the first carbon neutral campus in the country, and so I think we were a little ahead of the game. But I know that based on the discussions with Deans last week, this is a hot topic, and Deans and business schools all across the world are focused on catching up, and there’s student demand for it, and there’s employer demand for it. So business schools, like any other organization, respond to demand signals. Then there’s demand.

[00:04:27.510] – John

A lot of the demand is coming from the younger students because they are deeply concerned about climate change and the fact that governments don’t seem to be doing enough. So maybe the leverage point is, in fact, the corporation, which could actually take more progressive and faster leads than the government agencies have been willing to pursue. Do you agree?

[00:04:55.870] – David

I think that progress in the government level has been slow up until about two years ago, I think, obviously the United States President Biden and the Congress passed a landmark law investing in climate this year. Europeans have done the same. The SEC and European regulatory authorities are now pushing to require companies to disclose their carbon footprint. And so companies and auditors are investing and stepping up their game. I do think that and one of the themes at American is that business can be a force to create a more sustainable world. And I know that different types of businesses approach it differently. A consumer facing company approaches it from a customer perspective. Their customers are demanding greener products. Walmart, for example, gives out shelf space to greener products. And so consumer products companies are adjusting. In the technology world, it’s an important issue, but the most important issue is that employees are demanding young people demand to be working in a place, and they’re much more likely to go to a place that has strong commitments to environment, to social justice, to the values that young people are embracing. I see that with my own kids. I have a 21 year old and an 18 year old, and it’s very important to them, and I see it with students both at Kogod and also I taught for several years at the Tuck School of Business, and there was a big theme up there as well.

[00:06:25.130] – John

Caroline, I’m sure you’ve noticed a greater interest in this topic among your applicants, right?

[00:06:30.590] – Caroline

Yes, absolutely. I went to business school 20 years ago now, and it was sustainability and environmental concerns came up, but it was more peripheral and it wasn’t really sort of a core element of my business education. And actually, I remember a year or so after I graduated from business school, my husband was offered a job as head of sustainability at a big multinational and he turned it down because he said it’s not something that they particularly care about, right. So I would not be a key decision maker in the business. So that has changed so much, as you say, that’s become something now a function that is really critical and strategic for businesses. And actually, now he’s an investor in climate tech, so he’s got back into that. But yes, I mean, I’ve seen having been reviewing applications at INSEAD starting in 2005 and then Fortuna over the last ten years, 18 years ago, when I first started reviewing applications, it wasn’t something that came up that frequently, right? Sometimes candidates had a particular interest, perhaps they were working in the field or they had an interest through their extra curriculars in environmental concerns, sustainability and so on.

[00:07:49.990] – Caroline

But it was not something that came up that frequently. And now it’s absolutely core for the latest generation. I think it’s not easy for business schools to keep up with that, right? Because as you said, David, business schools are not the fastest to embrace change and it’s not easy. And often faculty are quite entrenched in the way that they do things and the things they teach. So I’m curious, what are your thoughts about how business schools are adapting? Because I’ve seen how difficult it can be to drive change in an institution where faculty have their own domains and their own ways of doing things and aren’t necessarily keen on changing. So how do you think the business schools are responding to that? And what can they do to respond more to the demand from the younger generation?

[00:08:52.330] – David

By the way, the experience of your husband is very consistent with my own private sector experience. I mentioned that I started the program in 2008, 2009, to Yawns, and now Carlisle has it in its DNA and they have 15 to 20 people. And every single investment that Carlisle makes has an ESG lens on it, every single one. And part of that was because we had investments where all of a sudden a factory was underwater because of a flood somewhere due to climate change. So I think it’s very mixed among business schools. There are some schools, I’ll give you an example, berkeley, Anne Harris and the dean there. We’ve spoken. I think they’re doing great work in this space. She was just reappointed in her announcement. She said, One of my top priorities is driving sustainability through our curriculum. I’ve been really pleasantly surprised and at the embracement of this at the Kogod school. So every single department at Kogod now has incorporated sustainability into both teaching and research. So we have five departments the traditional departments accounting, It Management, Marketing, Finance all of them have embraced it and they all are driving sustainability both in their teaching they develop courses and in their research. So I’ve been very pleasantly surprised and maybe that’s because we have a great program both at the graduate and undergraduate level and we have growing demand and so we respond to demand signals. Some schools are still scratching their head. At the AACSB conference there was discussion among some schools of what’s sustainability? What does that mean? So I think the trend is in the right direction and there’s mixed adoption.

[00:10:34.990] – John

Yeah. And I think, David, you’ve also hired faculty in who are experts in this subject or who have a passion or interest in it. So on one level that’s another solution. If you have entrenched faculty who don’t really want to move you can always bring in newbies who have seen the light, I guess. How do you teach sustainability management? So you have an Ms in this topic and I know that as a new dean a key part of your strategy is to make your school a center for sustainability. But how do you actually teach it?

[00:11:16.670] – John

So great question. We’ve incorporated into each of our departments. So basically we have students that, for example come to us and they’re experts in environmental issues and they need to learn business or they’re experts in business and they need to learn environmental. So we have a core curriculum which includes five courses social Sustainability, Managing for Climate Change a marketing class about marketing with sustainable outcomes. And then we have lots and lots. We have over 40 classes that we offer for electives which include sustainable investing. Our board of directors, just to show you the commitment at American University has allocated 1% of the endowment for students at the cognitive school to recommend funds to invest their sustainable funds. And so our students go through, they hear pitches and they do a recommendation to the investment committee of the board as part of that class. Supply chain is a very, very hot topic in sustainability. You look at what Apple is dealing with in terms of supply chain in China but also focus on green supply chains, efficient supply chains. And also companies have had real problems with human rights problems in their supply chains. Entrepreneurship is a big area of focus in sustainability.

[00:12:35.810] – David

This is one of the fastest growing areas for venture capital. Venture capital fundraising doubled last year for sustainable funds to 64 billion. That’s a lot of money in venture capital that needs to be allocated. And then we have courses that we offer with other parts of American University the Law School on sustainable reporting and disclosure. One of our actually grizzled old veteran accounting professors, a wonderful guy, he’s like a kid in a candy store. He’s teaching a new course this semester called Sustainable Reporting and Outcomes and it’s all about measuring sustainability. How do you measure environmental outcomes. How do you measure social outcomes? And we have some wonderful guest lectures in the class from Ernst and Young and PwC and a lot of the big firms and financial firms as well. So it’s a broad based curriculum, and we’re developing new courses every semester.

[00:13:32.050] – John

And that’s crucial. I mean, Peter Drucker once said, what gets measured gets managed, and what doesn’t get measured managed. And it’s really so true. Now you have an Ms and sustainability management. I hear that it’s quite popular, that in fact, you have had a 100% increase in applications. Is that right?

[00:13:54.320] – David

That’s right. I’ve listened to many, many of your podcasts about challenges in graduate enrollment and the MBA programs in particular. And sometimes I need to get a tissue listening to you and Caroline. But in our sustainability program, the demand is extraordinary year over year. At this point, we’re 100% up in applications. We’re not going to take we’re not going to grow our class, obviously, so we’ll be much more selective. We’ll grow some, but we’re not going to grow 100%. And the quality of students is just extraordinary. It’s much more domestic, which is interesting. So our MBA program and other parts of our graduate programs very much reflect the trends that you talk about all the time. Heavily international, declining domestic students in this program, it’s 70 30 domestic, and the domestic student quality is just extraordinary. It’s interesting. I became really excited about this, in part because I had a conversation early on with a bunch of students where it went like this I’m a new dean. How’s it going? Why did you come here? And the students said, well, it’s the best sustainability program in the country. And I kind of said, okay, right, I got it.

[00:15:05.990] – David

Where else did you apply? And they said, Duke, Columbia, Northwestern, et cetera. And I said, I didn’t get into some of those schools either. They said, we got into all those schools. We wanted to come here. And so I thought, we have something here that is special. And I’ve approached my new role like a business, which is basically doing assessment of our strengths, and we’re going to invest in our strengths, and this is one of them. So actually, let me just add one thing. You mentioned new faculty. This year. We’ve hired two that started in the fall, two new faculty, one tenure track, one non tenure track who’s a sustainable entrepreneur. We just hired a new person from UNC, got his PhD in sustainable finance. He starts in the fall. We have one more position open for an industry executive. We have an executive and residents position open. We’re very close to hiring that person. And then we’re going to try to hire a very senior tenure track professor next year. So we will have hired, in a three year period, five new faculty members of sustainability and executive and residents. And so we’re we’re investing heavily.

[00:16:12.620] – John

I also think that, you know, given the public policy implications of sustainability that studying it in Washington DC is a really good idea.

[00:16:20.600] – David

100%. I mean, part of this is just intuition, which is I taught at Tuck. They are great at what they do and if you want to go to McKinsey Bain or BCG Tuck, it’s a great place. Wharton is going to be fantastic at Finance Stanford for an entrepreneurship coming to the nation’s capital. Being an American university with the strength of our policy school, our law school, our international school, it’s tied up into our DNA and there’s so much of a policy, public affairs, communications and regulatory posture to sustainability work. It’s basically an external facing function in businesses. It just makes intuitive sense that a school like American would be good at it and invest in it.

[00:17:12.250] – John

Now, what’s the case for doing a specialty degree like a Master’s in Sustainability Management as opposed to the MBA? Because I think of the MBA as sort of a Swiss knife but you can apply it in many different ways and if you go for a master’s in a specialty you pretty much better know that you want to be in that field and you want to be in that field for most of your career. Isn’t that true?

[00:17:38.370] – David

It is. The average work experience of our sustainability students is about six years. So they’re 28, 29. They know they want to do this. I’ll give you a couple of examples of student profiles that are interesting. So we have a fabulous student who works at a major transportation company. She is head of communications, sustainability communications for one of the largest transportation companies. You know, it I can’t say the name. She’s wanted to go into their operations part of the business, manage their green fuel, manage their supply chain, create more efficient operations. She has not been able to get in and the COO basically said if you get more of a business exposure, business background, I’ll hire you. So she’s getting a sustainability agreement with us. We have a wonderful student from India who worked for Ernst and Young. Ernst and Young, one of their fastest growing parts of their business is their sustainability advisory business. She wants to go back to Ernst and Young and work I think it’s called CCAs, the center for Climate and Sustainability at Ernest and Young. And then we have a young man who came up through the Forest Service. He’s a forestry expert and he wants to go into climate investing, carbon investing as the carbon markets develop. He wants to become an expert in that space. And so he felt that he needed the finance and the business fundamentals and understanding sustainable measurement in order to be effective in that space. So those are kind of a few student profiles and they’re coming to us from top schools in the United States and abroad. And the quality of students is just extraordinary.

[00:19:16.050] – John

Yeah, that’s amazing how much Broadway is there on this? In other words, I’ll ask the delicate question and one where the answer may be obvious, but still our listeners need to hear it. Is this a fad?

[00:19:31.030] – David

It’s a good question. We have discussed and debated that. We don’t think it’s a fad. If you asked me three or four years ago, I might have said it could be a fad. But I’m on the board of an asset manager where this is a big issue. And if you look at fund flows from investors in the last 18 months to two years, the fund flows have been extraordinary. So I guess what I’m saying is, like Caroline’s husband 510 years ago, I would say the rhetoric was ahead of the fundamentals of business, and now the business is ahead of the rhetoric. So I don’t think it’s a fad. I think that if you look, there’s, obviously political pushback in Florida and other states, but businesses are running hard, and we started a sustainability speaker series at Kogod. We have eight CEOs coming from entrepreneurs like Seth Goldman, who founded Honesty, to the CEO of Marriott, from small companies to big companies that are embracing I’ll just give you one example. Marriott’s CEO, they have eliminated all those great shampoo bottles that I’ve always stole from hotel rooms. I have a ton of them. Flashlights. Maybe you all have stolen, too. I’m seeing Caroline nod. They eliminated those. So I asked them. All right, so what’s the big deal? All right, John, you’re a smart guy. How many bottles do you think they don’t put in landfills a year by eliminating those and putting the pumps into showers? Okay, millions. Millions? Millions. Okay, Caroline, you have a guess.

[00:21:11.130] – Caroline

Yeah, I would say it’s in the millions as well. I don’t know. I will say 20 million.

[00:21:16.730] – David

Okay, 500 million a year.

[00:21:19.400] – Caroline

Oh, my God.

[00:21:20.280] – John

Oh, my God. Really?

[00:21:22.490] – David

Okay. So that’s good for the environment. It’s also good for Marriott’s, bottom line.

[00:21:28.170] – John

Yeah, but now I take the shampoo away.

[00:21:31.310] – David

I know. Actually, when I talked to them about this, I told my wife, I said, Where are all those shampoo bottles we stole? And they said, they’re upstairs next to the flashlight. So I went up and took a picture of them and sent them to the Marriott people. I said, Sorry I took all these from you.

[00:21:48.850] – Caroline

At least they did end up in landfill.

[00:21:52.470] – John

One element of your program, incidentally, and is very common in many graduate management education programs today, is experiential learning. Can you comment on what kind of projects your students are doing in the Ms and sustainability management?

[00:22:07.920] – David

Okay, so we have a great experiential learning component to this. Not only internships in Washington, DC, which is one of the reasons that people come to Washington, DC. But we also have a program abroad. For the last number of years, we’ve taken all the students to Scandinavia, Denmark, Sweden, et cetera, and we work with businesses to work on real problems. So sustainable fashion, making products from more sustainable inputs, sustainable packaging, and making packaging much more efficient. Actually, I have a great story from Carlisle days. We owned a shampoo company and we wanted to make it a green company. And part of it was getting more shelf space at Walmart. And so we reduced packaging waste, we improved the ingredients, we improved disclosure, and the company doubled in sales and sold to Johnson Johnson because it got a lot of green shelf space at Walmart. So obviously, offshore wind has been a big area. Electric vehicles. Europe, as Caroline know, just passed regulation that said no more gas fired vehicles in 2035. Real estate is a big issue. Companies and multifamily property investors are trying to figure out how do we put more infrastructure in for EV charging because their clients are demanding it. And so our students get to work with these great companies throughout Scandinavia during the summer on wonderful experiential learning opportunities where they’re dealing with hard problems, and then they also get great internships in Washington, DC.

[00:23:50.950] – John

Caroline, you think sustainability is here to stay?

[00:23:54.200] – Caroline

Yes, I do, because obviously the problems are here to stay, unfortunately. Right. And that is the key driver here, is that we’re in a tickle and unfortunately it’s going to take many years to resolve this and hopefully we’ll be able to. But thank God the younger generation is embracing this issue and getting involved because it’s going to be a critical challenge for the younger generation and it’s going to take decades to sort out. I think it’s going to only become more important rather than less important.

[00:24:33.430] – John

Yeah, that’s really true. Climate change isn’t going away. It’s getting worse. Implications of it are getting more horrible. I mean, we’re witnessing tragedy after tragedy in the world because of it. And Lord knows we need real action. And corporations need people who have both the passion and the skills to make a difference in this area. And David, I’m sure you agree because you are doubling down on sustainability at your school.

[00:25:06.450] – David

We are. We’re investing. Let me just give you one other thing we’re doing which tees off your focus on corporations. So we put together an advisory committee, which we’ll announce in the next 30 days or so. So I thought, okay, let’s put together an advisory committee. And you’ve been around schools. Some of these advisory committees are a little sleepy. Some of them are not so sleepy. So I went out and these are folks that are mostly unaffiliated with American University. So we have a 25 person advisory committee. It includes ten CEOs. Ten CEOs. It includes the top executives that either run, have run, or supervise sustainability at major firms like Starbucks, JPMorgan, KKR, folks that are on big boards like Twitter. Well, one of them was on Twitter before Elon Musk bought it, but Alcoa Warehouse or Rockefeller Foundation. So we’re getting very, very senior people that want to be involved in helping a leading sustainability program take it to the next level. And we have a meeting in two weeks. And one of the topics on the table is what’s the future of work? So if you asked me, going back to Caroline’s husband’s example, if you asked me in 2007 what was the future of sustainability, I never could have predicted it. Never. And so 15 years later, it’s totally changed. We want to get from these folks what’s it going to look like in ten years and so that we can stay ahead of the curve and adapt our program to help students deal with problems that they’ll be dealing with for the next ten or 20 years and not just the next two years.

[00:26:50.150] – John

Right. Well, David, thank you so much. It’s been a real pleasure to have you. We’ve been listening to David Marchick, our guest today. He’s the new dean at American University’s Cogn School of Business, who had served as a managing director at the Carlisle Group for twelve years and has been involved in two presidential administrations. David, one last question for you. You are not an academic, you’re a kind of a corporate type. What is it like for a corporate type to go into an academic environment and lead a business school?

[00:27:25.650] – David

That’s a great question. You should ask the associate Deans that suffer from my 05:00 A.m. Emails and lack of understanding of why something will take two years instead of two months.

[00:27:41.250] – John

David, there are that many of you out there.

[00:27:45.350] – David

Actually, it’s been great. I feel blessed to have had different types of careers and I wanted to do something where I could give back and help young people. And so when I left Carlisle, started teaching a tuck and I loved it and then I’m really enjoying it. I’ll give you the positives are it’s mission oriented, the faculty are great, the students are great. Yesterday was the first warm day in DC. And just walking around campus with the backpacks and the kids out on the quad, it was just fun. And invigorating academia moves slowly. It moves much more slowly. I actually pulled this chart the other day together, which one of my team members did which. I said give me the top ten companies in the world by market cap in the year 2000, and of those ten, only one from 2000 is still on the list Microsoft. Otherwise nine of the ten have been replaced. And I said, give me the top ten business schools in the country from 2000 appeared today and all of them are the same except for one. And basically Duke dropped to like eleven and Yale came in as now number eight. This is in US news. So academia moves very slowly and I fear that the people that work with me are suffering a little from my pace, but I’m learning from them and hopefully they’re learning from me.

[00:29:13.950] – John

Well, David. Thank you.

[00:29:16.190] – Caroline

Business people like you, Dave.

[00:29:19.410] – John

There you go.

[00:29:20.120] – David

Thank you. Hopefully it works out. And like I said, like we used to say in Carlisle, when we made a new investment, asking five years how it goes. So hopefully it works out.

[00:29:30.050] – Caroline

We’ll check in then.

[00:29:31.970] – David

Thanks for having me. And thanks for everything you do.

[00:29:34.340] – John

It’s been a pleasure. This is John Byrne. Poets and Quants. You’ve been listening to Business Casual, our weekly podcast.

At B-Schools, Sustainability Is The Hot Topic
Maria |
February 21, 2023

[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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