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.

Business School News | General | P&Q Podcast "Business Casual"
At B-Schools, Sustainability Is The Hot Topic
Maria |
February 21, 2023

Full Episode Transcript:

John Byrne: [00:00:00] Hello everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast. We want to talk about international students. Schools are now reporting that a good number of their international recruits who were admitted to programs this fall haven’t been able to show up or have changed their mind.

At the University of Illinois, the school, the Gies College of Businesses, lost about 200 international students in its Master of Finance and Master of Business Analytics programs causing a $7 million hit. To their budget at UC Davis Graduate School of Management, 40 students didn’t show up who were admitted, and that’s resulting in two and a half to $3 million hit on their budget this year.

Both of these things have occurred before the announcement of a hundred thousand dollars tax on H one B Visa. Which will make it more difficult for many employers [00:01:00] to hire international students and keep them in the US for an extended period of time. And we’re getting the new class reports of the, of the new cohorts of students who’ve arrived on campus in the fall of this year.

And Carnegie Mellon is. Down 30% for their international cohort over the past two years. UCLA Anderson School is down 25% over the past two years, and schools are preparing for the worst because of the H one B Visa decision which could affect future employment. Caroline and Maria, my cohosts are in the market helping people get into the best schools in the world.

And Caroline, what do you think?

Caroline Diarte-Edwards: Yeah, definitely seeing concern among international candidates and people holding off on applying for the US schools. So it’s really a shame. I think the international schools, particularly the schools like Inea and London Business School and the other top.[00:02:00]

International European programs will benefit, they’ll get talent that might otherwise have come to the us, which is great for those schools. And I’m very fond of those schools, but it is sad as from the US perspective for sure. On the other hand, you could also take the perspective that.

If you do have options for your career post MBA that don’t require that you absolutely have to stay in the US as an international candidate, then now could be a very good time to apply, right? Because definitely application volume will be down and schools will be perhaps. More open to candidates that might otherwise have been waitlisted or rejected in the past.

For some candidates, this is actually a fantastic opportunity to get into a top school, but from, for, at least from the school’s perspective, it is a shame because, I’ve experienced firsthand the value of a very internationally diverse classroom and the value that brings with a [00:03:00] diversity of perspectives that enriches the learning experience so much for everybody.

Enriches the debate and bring so much to the academic experience as well as the the network and the social experience. So it’s everybody’s loss, right?

John Byrne: Very true.

Caroline Diarte-Edwards: And I think it’s a very myopic perspective that the US government takes that. There needs to be a more of a refocus at US educational institutions on the domestic market because those international applicants bring a lot to the domestic students in enriching their learning and enriching their network.

Of course bring a huge value to the US economy when they stay. So there are very impressive statistics on the value of immigrants to the US economy. So Indian immigrants, for example, are only about one and a half percent of the US population, but they have founded to date about 8% of all the tech startups in the us.[00:04:00]

And for sure some of that top talent from India will now not come to the us. They will go to perhaps they will stay at the great schools that we’ve talked about in India, or they will go to other international schools. So for sure it will be a loss to the us learning experience and to the US economy.

John Byrne: Maria, you run applicant lab which is a platform that helps applicants get into highly selective schools. And many of the people who use your product are international students. What are you seeing?

Maria Wich-Vila: Everything Caroline is saying concern is think a delicate way to put it.

And I think it’s because as the more affordable provider in the market, I tend to get the applicants who maybe they don’t have the family business to fall back on. Maybe they don’t have, large sources of income elsewhere in their lives. And so I think the concern is very real and very merited, right?

I can’t. In good faith, tell someone, if they [00:05:00] really start, sit down and do the math and start to do, run the numbers, if they just assume that things are going to stay as is. And this is the big caveat that I’m, I want to get to in a second, but if we assume that things stay as is and if someone really is from a lower income tier from Nepal or India or some of the other countries that I work with, yeah, maybe sit down and do that math and think about, okay, if I do have to come back to Nepal afterwards, how will I pay back that loan? There, there is though some good news. Even if we assume that things stay status quo, which I hope, and I’m pretty, I’m I think it’s, I’m cautiously optimistic that they won’t.

But there are other markets as well. So I’ve had a lot of candidates, or former clients, I should say, graduate from business school, not be able to get jobs in certain in countries and then. Being able to move to Dubai. Dubai for some reason, has started attracting a ton of candidates, primarily from South Asia but from other parts of the world who might be having trouble getting some of those work permits.

You could do worse than live in, Dubai’s not perfect, but [00:06:00] you could also do worse than live in Dubai, right? The salaries are pretty high. The standard of living, if you have a white collar job there is, it’s not the worst outcome. So it’s not I can’t stay in the us. That’s it.

There’s no other it’s not a binary of, it’s either the US or it’s nothing. And then I think the second point is I, we’ve just seen. So many things, let’s take something from a different facet of policy. The tariffs, right? The tariffs were announced and the markets went crazy, and in the months that have followed, oh, actually, here’s the tariff, but this one company, their products aren’t gonna be subject to the tariff.

And then there’s this other company that maybe they’re not gonna have to pay the same tariff. And I can’t help but wonder if some of these. Some of these very large companies that are getting tariff exemptions, their ability to lobby for. The H one B, maybe lowering of the H one B fee. If they’ve been able to successfully lobby tariffs, they might be success, able to successfully lobby against these, true, these [00:07:00] visa fees.

And a lot of these big companies, these big tech companies are in fact some of the largest employers of post MBA talent in the us. So I am cautiously optimistic that. This could be, hopefully right now it’s the big, the flash and storm and the, the making, the big splash, right?

Everything’s about showmanship and making the big splash. And maybe in the aftermath of the storm, that initial PR media storm, maybe the reality will start to calm down a little bit. Yeah, the other good news is that if you’re applying now, that means you would enroll in 2026. You would, if it, if you’re talking about the US two year program, you would graduate in 2028.

At that point, who knows what might happen. I like to think that what we have seen so far in terms of the Visa policies, hopefully. Roughly the floor about as bad as it can get. I think if they start implementing a similar thing to OPT, that could be the same thing. But if we just assume that okay, right now what’s been announced is that these foreign students all have to do, you can’t stay here, you have to [00:08:00] go someplace else.

It, we assume that’s like the initial negotiating position. It’s just gonna chip, it’s just gonna get, it’s got nowhere else to go. It’s even worse. So we’ve, we now have two and a half years roughly until. People applying now would have to really implement, or be really affected by this in a.

In a pragmatic and tangible way. And so that’s why I’m hoping that the little chipping away and the chipping away things will start to get a little bit better and a little bit better and a little bit better like we’ve seen with other facets of policy. Didn’t like a bunch of the CDC employees that were all fired under Doge didn’t more than half of them I think were recently rehired.

Yes. Back again true. Whatever you think of the policy, it seems like some of the policies are. Being slowly walked back. And so I think if you. If you’ve got an adventurous spirit, I, and by the way, if you apply now, sorry. I know I keep going, but I like, if you apply now, let’s say you get accepted, you don’t have to show up until August of 2026.

So that will give you [00:09:00] time, like definitely. Apply now and see what happens between now and August of 2026 to make the decision to not apply now, because you’re rightfully scared. I’m not blaming anyone, but to not apply now, maybe by maybe six months from now he’ll be like, ha, just kidding. I’m doubling the number of H one Bs.

Yeah, we have no idea what’s gonna happen. So things are So give yourself that optionality.

John Byrne: Yeah. And things are so uncertain that could very well happen because, one day at tariffs are on one country the next day they’re not one day they’re pausing the ab the interviews for student visas, the.

Say they’re not there’s litigation all over the place, challenging many of the presidential actions that have been taken that have put them in limbo despite all the headlines. So it’s, it, there’s more uncertainty than there is certainty about any of these things. And as you point out, you, if you [00:10:00] did apply this year, the odds are gonna be in your favor if you’re an international student, frankly, because there is no question.

That international applicant volume will be down at all the top schools in the us, which means that to maintain some semblance of a global class. Admission directors are going to have to dig a little bit deeper into their international applicant pools to select candidates. In a way, if you play the long term and in the BA, in, in many graduate degrees or long term bet, I think you’re gonna be.

Oddly better off. And it may even be that the schools will really even go out of their way to help international students in ways that they haven’t in the past because of these actions in Washington. And what do I mean by that? Just a more welcoming reception than the already welcoming reception you would get hiring immigration lawyers and people that can help you.

If in fact there is a [00:11:00] challenge of one kind or another. I think the takeaway is not to be discouraged and throw up your hands to say, ah, I always dreamed of coming to the United States and getting an MBA or a graduate degree in business. Use this as an opportunity to actually increase your odds of getting into a better school with the understanding that when you get out there, probably most likely be an administration change and a change in these policies if they even get completely adopted as Maria points out.

Wouldn’t you think that’s the best strategy, Caroline?

Caroline Diarte-Edwards: Yes, I agree. I think that it’s good to take a longer term perspective because it is such a long timeline, right? If you’re applying to a top two year program as you say, you’re gonna be coming out of the program at the end of the Trump presidency and things may look very different.

And Maria rightly points out that. Everything is very volatile, right? So one thing gets announced and the next week it [00:12:00] gets rolled back, right? They’ve done so many things where they’ve realized, oh, actually that was a really bad idea after all. So

They’ve changed things. So things may not it might, may not turn out to be as bad as we fear.

And then I would also encourage candidates. To apply to the US schools, but why not hedge your bets and apply to an international program as well? Agreed in a time of uncertainty. As Maria said, create options for yourself. And so I would encourage candidates to apply to the top US programs, but also apply to top international programs as well and see what offers you get.

And then you can make a decision. As Maria said, it will be closer to the time when you would be starting the program and there may be more clarity about the situation in the US and what your options are in international markets as well. So I think that given the current circumstances, a good strategy is to hedge your bets and apply more widely than you might [00:13:00] have otherwise done.

John Byrne: Plan Bs are good. Let me just say business schools in the US have for years advised international students that those should have a plan B in the event that they can’t get with a US company. The other thing to, to keep in mind incidentally, in terms of MBA employment is that most of the companies.

That basically employ the lion’s share of MBAs are all global concerns. So you can be hired here and if there’s any challenge in getting you employed here in the us you can simply start in an office outside the United States with a hope of coming back when things clear up. So that is also another important thing to keep in mind.

And I’ll just say this. Despite whatever messaging you’re reading in your local newspapers or on your streaming platforms or television stations about how immigrants may not be welcome in the us that’s not true at all. Universities are diverse places. Welcoming. [00:14:00] Embracing loving the diversity of their students and particularly those from different cultures and backgrounds that enrich the educational experience.

There is no Dean that I’ve ever encountered who said they want fewer international students. It’s the exact opposite. They’re putting out message after message, telling people that they’re still welcome and wanted. Needed in the classroom. Now, Maria, in the past we’ve seen applicants who try to say, okay, can I time my application and my enrollment in a program to what I think might be the next recession?

And we know that in recessions applications go way. In part because some people lose the opportunity to gain advancement in a recession. Some people get unemployed. Some people just realize, hey, a recession is a good time to take a time out and get a new educational credential, which may allow me to do things I otherwise can’t do.[00:15:00]

But it’s almost impossible to time a recession and I’m imagining it’s impossible to time what’s going on here now.

Maria Wich-Vila: Yeah. I mean if we could all time, when everyone’s been talking about a stock market crash that to, not to bring another disparate topic in, but like everyone’s been talking about, it’s a bubble.

It’s a bubble. I’ve been hearing ’cause a bubble for a year and a half. True. Yeah, you can’t time or ask, for example, ask the people who enrolled in business school, like who got into business school in 2020. Like there’s always gonna be these external shocks. We can try to predict a recession, but who knows if it’s going to happen?

Who knows if there’s going to be some sort of virus or the opposite of a virus. Maybe there’ll be a virus that helps us all live healthily forever. Who knows? There’s so much uncertainty out there that who knows what to do. So I think. I think yeah, have that optionality. I think go ahead and apply.

Now if there is a recession though, which everyone seems to think is coming at some point, at that point, it’s going to be harder to get accepted. And as Caroline has pointed out, so rightfully, if other international, high quality international students are [00:16:00] spooked by the current H one B talk, now is your chance.

International candidate. Jump in there, shoot your shot like you might be able to get into a school, assuming of course that you’re qualified, but. You might have a lot less competition now than you normally will, so this could be a golden opportunity for you. And one final as one thing that I wanted to point out was that I was thinking, okay, Maria, let’s say that, you just said that maybe there’s gonna be walk back of some of these and there’s gonna be, maybe he’s gonna change.

But even if there isn’t a change, right? Let’s think about this. The companies themselves are gonna have, and you started to alluded to this John, when you mentioned that a lot of them are global concerns. They’re gonna have now a two year window in which to say. Okay. We know that we’re not gonna keep these people in the states, so let’s open a huge office in Vancouver.

Let’s open a brand, an enormous new office in Toronto. Whatever that is. Because I was thinking back to over the summer when it looked like maybe a bunch of international students wouldn’t be able to get any student visa at all. And I know that some of the business schools we’re looking [00:17:00] at, do we rent out some space in Toronto and do Zoom classes?

We do a hybrid. What we did during COVID. I’ve heard that. I think Rice, I was actually having dinner last night with a dear friend who was, say he’s from Texas and he was saying that Rice has some sort of a campus in Paris and that they are leaning really heavily on their global campuses around the world to still be able to service these students who had gotten accepted.

So things like that, like if. Even if our sort of my very cautious and perhaps irrational optimism turns out to not be true, let’s say the things get, the OPT is banished and all, everyone is banished and it’s the worst case scenario. Again, there’s gonna be two and a half years for these companies. To quickly find, okay, fine, we’re gonna open up an office in Mexico City and we’re gonna pay people really well and we’re gonna what?

Whatever that is. ’cause they’re, the companies are still gonna want the talent, right? Just because the political administration doesn’t want the global talent in the country. That doesn’t mean that the country’s employers don’t want that talent. They [00:18:00] want that talent, they want that intellect, they want that energy and that drive to make their companies better and to make more money.

So they have a very strong incentive to not only be lobbying for these. Visa changes to go away, but if they don’t go away, they have a very strong incentive to come up with some way to provide, to provide those incomes and to provide those perks and some sort of a compromise type of situation.

So again I think if you’re applying now, if you’re going in with eyes wide open, shoot your shot. That’s my, I would absolutely tell people to to try that.

John Byrne: Yeah, I totally agree. And, generally this is my rule of thumb and Maria and Caroline, you may or may not agree with this, at the top MBA programs, they’re so selective that the people who apply to them generally are very self-selecting group.

So I always say that roughly 80% of the school’s applicant pool. Is qualified to actually get accepted, get in, do [00:19:00] well, and land a good job. And yet we know that at Stanford, the acceptance rate is 6%, that Harvard is 12 Wharton and Columbia is, a little under 20 or so. So there are a lot of really good candidates who aren’t getting in.

Which leads me to this, if you’re an international student who thinks okay, so these US schools just might dip a little more into the domestic pool to make up for the offset of international candidates. As it turns out, there is a little notice. Clause in the big beautiful tax bill that was passed here under Trump that places severe limits on federal loans for graduate students.

Now, the current grad plus loan program allows students to borrow up to the cost of their graduate programs. That comes to an end in July of next year. After that, grad students borrowing will literally be capped at [00:20:00] 20,500 bucks a year with a lifetime graduate school loan limit of a hundred thousand. That’s a big deal because, at the top MBA programs it’s not on typical.

For a student to borrow over a hundred thousand dollars easily. And so these caps are also going to affect domestic enrollment. So again, that, that contributes to your ability as an international candidate to get in both. The likely decline in competition not only from internationals but also from domestic students here, interestingly enough, that Bill, which passed has different limits for a professional graduate degree, but the bill basically says that only med school and law school qualify as professional degrees and not business school.

That’s another wacky thing that’s happened that will affect. Domestic enrollment as well. So I, I side with Maria and [00:21:00] Caroline to me the advice is, look long term. Don’t be affected overly affected by the change in policies in the US or the climate here. Understand that if you apply now and you matriculate next year and you graduate in two years after that you’re gonna be facing probably a very different environment.

Also understand the odds are in your in your favor, in getting into a highly selective, really good program in this coming year. And know that, while people too often calculate the value of an MBA based on short term variables, like what’s my starting salary gonna be? What is my sign-on bonus?

The truth is the MBA has enduring value over your lifetime. So it rewards you over your entire career and not just for the first or second years. And you can’t go wrong by graduating into a network of helpful and supportive people from a great school and [00:22:00] receiving a great education. So I think bottom line, we’re telling you apply.

Don’t get convinced by your colleagues or anyone else that this is a bad time to come to the us. Opportunity. Some of the best opportunity come comes when people perceive there to be significant challenges. And I think this is really true with business school. We hope we convinced you to come and try and hedge your batts too, as Caroline noted.

I think that’s really super important to have a plan B when you apply and toss a bunch of apps to the European schools which have excellent superb world class MBA programs and real international cohorts. 90% of the students not from the countries where the schools reside. Toss a bunch of them in your mix for your target schools to give you these different options at the end of the day.

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

Maria

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