Debunking MBA Myths
Maria |
March 8, 2023

Considering an MBA but feeling unsure about the myths surrounding it? Gain valuable insights from this podcast episode of Business Casual, where our hosts debunk the most widespread misconceptions surrounding the degree. From the common belief that a business background is required to gain admission, to the misconception that only finance or consulting careers benefit from an MBA, this episode provides important information to help you make an informed decision about your future. Learn that a high GMAT score is not the only factor in admissions and that getting an MBA is not a magic wand to easily achieve any career option listed in the career outcomes report. 

Stay informed and make the best choice for your career growth by listening now!

 

Episode Transcript

[00:00:07.210] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to our weekly podcast, Business Casual, with our co hosts Maria Wich Vila and Caroline Diarte Edwards. We’re going to talk about myths today. The MBA for some is something of a mysterious degree degree and mysterious experience. And there are a lot of myths that are attached to the degree, and we want to explore them. Maria, do you have a number one myth?

[00:00:34.080] – Maria

I think my number one myth about getting an MBA is that it is a magic wand to easily achieve any of the career options that are listed in the career outcomes report. So I think people look at those career outcomes reports and they look at the salaries involved, or maybe they see someone in the news and it says, oh, 20 years ago, this person got an MBA from a certain school. And so they think, well, all I have to do is get into the school. And then if that happens, boom, I’m instantly guaranteed the job at McKinsey. I’m instantly guaranteed a job at Goldman Sachs or whatever. And that is really not the case at all. I know you guys are probably sick of this little quip that I have, but it’s Harvard, not Hogwarts. It’s not magic. They can teach you a lot, but they also cannot change the fabric of space time, career vision continuum. And so certain employers, it doesn’t matter if you’re at Harvard and say, Lbs, Stanford, it doesn’t matter. You could eventually maybe get to that job that you want, but you might not get it straight out of business school.

[00:01:38.430] – Maria

You might have to take a few detours and do a few preliminary steps to make a complete pivot into something like, say, private equity. And this is something that I think a lot of folks just, they’ll say things like, oh, I’m not sure where will I eventually work? Will I like it more at McKinsey or at Bain? And I’m like, whoa, hold your horses. Like, you need to get an offer. A lot of dominoes need to fall into place first to even be in that position to begin with. So I think that’s my number one myth.

[00:02:03.550] – John

That’s a good one. Caroline, your number one myth?

[00:02:06.400] – Caroline

From an admissions perspective, I think that perhaps the number one myth is the GMAT. And I often speak to candidates or I sometimes speak to candidates who think that if they can ace the GMAT, then they’re almost guaranteed to get into a top school. And that is absolutely not the case, right? And then I also speak to candidates who count themselves out from applying to a top school because their GMAT isn’t fantastic. So I think that often candidates put too much weight on the value of the GMAT in the admissions process and get their hopes up too much if they’ve done really well on the GMAT and think that that’s going to open all of the doors for them. And as we’ve discussed before, it’s just one part of a much bigger picture and it is important, but it is certainly not the be all and end all of what it takes to get into a top business school. It’s just one part of a much bigger picture. So I would like candidates to keep that in mind when they are evaluating their chances for getting into a business school.

[00:03:11.520] – John

I’ll tell you, my number one myth has to do with the perception that many non business majors have about business school. Many nontraditional students, and when I say nontraditional, I mean to a business school, believe that the population that centers around a business school is a group of people who are greedy, who are interested in nothing but money and therefore have little to offer the world. And while that may seem to be an exaggeration, particularly for people who don’t feel that way, I can tell you that many people who major in other fields that are far away from business feel that, particularly those in humanities, there’s also what’s happening. And probably for the last quarter of a century in the US humanities, education has been in tremendous decline. And part of that decline is caused by parents who are pressuring their kids to major in business at the undergraduate level and then to go for graduate degrees, not in philosophy, geography, English or whatever, but in business. Because the fact that you actually get a job and earn money and have a decent living and to that extent I think it’s hardened the opinions of those who have stayed in the humanities about business.

[00:04:35.790] – John

And the truth is very opposite from those beliefs, which is you’re going to find in a business school a remarkable array, an eclectic group of people with fascinating backgrounds who come from all walks of life and all over the world. And the diversity of backgrounds and the diversity of opinions and perspectives and the desire to do something meaningful with your life is a powerful combination. Business school students are not naturally greedy and interested on only money and that has never been more true than it is today. That’s my big myth. There’s a big pet peeve for me.

[00:05:17.960] – Maria

Maria that’s interesting that you actually bring up, then, a myth about undergraduate, the undergraduate experience that you have to major in business, especially. I think parents and families, understandably, want to push their kids towards business, law, medicine. But just realize that a lot of these banks and consulting firms happily hire, readily hire people with English degrees, history degrees, philosophy degrees. It’s more about how well can you think? Do you have a good mind, basically? And some of the critical thinking, the communication skills that you get as a humanities major are in fact more powerful in some ways, right? Someone who can crunch a ton of numbers, but who communicates in an off putting way or who can’t explain their thought process. Well, that person will actually be less successful, typically in business than someone who perhaps you can teach someone how to add and subtract, but you can’t necessarily always teach those softer skills. So I don’t know how many parents of high school people we have listening to us right now, but I would just urge you to not be so focused on one specific major.

[00:06:22.830] – John

So true. What other myths are there out there that you’ve heard from candidates who are now considering an MBA degree but have long delayed the consideration of one because of one reason or another that turned out not to be true at all?

[00:06:40.700] – Caroline

Well, one that I think that often comes up is candidates hesitate because of the cost of a program and think that if they haven’t got the financial means behind them already, then they can’t afford to go. And it’s true that it can be very off putting when you look at the fees and the total cost of when you include all the living expenses, et cetera, et cetera, and you take into account your foregone earnings for two years or one year. It is a very expensive proposition, there’s no denying that. But as we’ve discussed in the past, the return on investment typically is very strong, especially if you go to one of the top business schools. And that, I think, is a useful data point that is reflected in some of the rankings. We love to hate the rankings, but some of the rankings do collect useful data on the financial progress of MBA alumni. And certainly it seems to show year after year that people are doing very well post MBA and that it really is generating a return. And then also, of course, many candidates can qualify for scholarships and there’s a lot of financial aid available, especially at the top schools.

[00:08:06.160] – Maria

Right.

[00:08:06.480] – Caroline

And many of them have very, very deep pockets. So if you are a candidate who comes from a background where perhaps you haven’t had the opportunity to earn a big salary or to save a great deal, then you may well qualify for quite substantial financial support. So I think it’s a shame sometimes candidates count themselves out from going to business school or they count themselves out from applying to a top school because of the headline price and haven’t necessarily realized that there’s potentially a lot of financial support available to them. And in any case, that MBA degree will generate returns for them that will enable them to recoup their costs pretty quickly.

[00:08:52.410] – John

Yeah, that’s true. And then the other part of this is there are people who think it should be Harvard, Stanford, Wharton, or Bust, or if I don’t get into an M7 program, it’s not worthwhile. Right?

[00:09:03.790] – Maria

Maria yeah, this is absolutely one of my biggest pet peeves. I really think people need to keep their eyes on the prize as to what attracted them to the degree in the first place. And those very benefits that Caroline was just mentioning, right? It’s not a matter of, well, only the people from the M7 have good career returns and good results, and everyone else is out of luck. No, all of these MBA programs, for the most part, right, any sort of reputable program, not top seven, not top ten, but top 30, 50, maybe even more, can really provide a lot of value to you in your career. And it’s interesting. Sometimes people, I don’t think, believe me, but I say to them, look, I know people from Harvard Business School who they have not necessarily succeeded. They have not necessarily gone on to make the big bucks. Some of them have even gone to jail. And yet one of the most we’re not going to cough cough, but it’s true. And yet simultaneously, within sort of my extended network of people I know, they’re one of the most financially successful people by far, went to UCLA Anderson.

[00:10:14.210] – Maria

UCLA Anderson has an amazing entrepreneurship program, and people just don’t they either don’t believe me or they discount it. And really it’s the person makes the school, and it’s not the school makes the person again, it’s not Hogwarts. It’s not like they put a sordiding hat on you or they wave a magic wand and now you’re suddenly this amazing entrepreneur. You’re suddenly transformed, and you’re a completely different person than the person you were going in. If you believe in yourself, which hopefully you do on some level, otherwise you wouldn’t even be applying, you should believe in yourself that you’re going to have a lot of success regardless of whether or not you go to a top 510 or 25 school. To Caroline’s point about the people being afraid of the cost and hesitating because of the cost, yes, there is financial aid available, but there is, I think, less financial aid than perhaps there was for people at the undergraduate level because they do take into account things like your most recent salary. And so maybe somebody who did get a big scholarship to go to undergrad and is now working in finance, they might be expecting the same treatment again this time around out, and it might not happen.

[00:11:16.160] – Maria

And what I say to people, even if they don’t get a scholarship, is when they accept you, they’re taking a bet on you. They’re placing a bet on you versus the other people that they rejected for that same spot. And if they are willing to place a bet on you by giving you one of these coveted spots, you need to be willing to place a bet on yourself, because how can you go to a school and say, yes, I deserve you know what? I’m going places school. You need to you’re going to want me in your alumni pool. You’re going to want me to represent you 10-20 years from now, and yet you’re not willing to put your own skin in the game. So that’s my sort of tough love to those folks.

[00:11:55.030] – John

Maria, I’m shocked that you would point out that Harvard MBA from your own alma mater would be in jail.

[00:12:03.350] – Maria

I don’t love it.

[00:12:05.750] – John

We actually do know a few. And if you actually were to search on poets and quants, you’ll find them, you definitely will.

[00:12:13.930] – Caroline

But I think all business schools have alumni who they probably regret admitting to the school. Right, it does happen. And I also know people who have been to top schools who are floundering in their careers. And some of the most successful people I know are not people who’ve been to top ten business schools have been to other business schools. So it’s absolutely right that it’s about who you are and what you make of the experience. And some people will be incredibly successful going to a tier two or a tier three business school.

[00:12:49.510] – John

Yeah, that’s really true. And when you look at the ROI data, it does turn out that a lot of times the people who go to a school that is not ranked very highly have a bigger increase, have a bigger MBA bump immediately after getting a degree than those who go to an elite school. Now, part of the reason for that is you have to be quite accomplished to get into a Harvard, Stanford, Wharton, INSEAD or London business school. And you probably are earning a good amount of money to begin with. So the actual percentage bump may not appear to be as big as it would be from someone who is applying to, let’s say, a public university that’s not in the top 20 or top 25, and then the employer rewards that person very handsomely upon graduation. So you tend to get a bigger bump immediately. Longer term, I think that all gets ironed out. And there’s no doubt we’ve done some research with firms that show that generally the higher ranked schools do return a larger lifetime income number than the lesser ones. Another myth I think about the MBA is that it’s essential to be successful in business.

[00:14:13.310] – John

We know that it isn’t essential. We know that. I think it does increase the odds that you will have a more meaningful career and be in a position to make a more meaningful contribution in your job. But it still isn’t an essential ingredient to success in the world of business. I would rather have it than not. And one of my big regrets is never having gone to get an MBA when I was much younger. But what do you two think about that?

[00:14:39.070] – Caroline

Well, John, I don’t think that you have suffered through not having gone to business school, and I think somebody should give you an honorary MBA degree for your contributions to the industry. But absolutely true. I’ve heard that they say at HBS when the students join, that you do not need to be here to be successful. You would be successful in any case, right, that cohort of students who have managed to get into a school like Harvard Business School do not need that experience in order to be successful in their lives. They would be successful, right? But the wonderful thing about going to business school is that it opens doors that might otherwise have been closed. So perhaps you will you’ll be able to do things that you wouldn’t otherwise have been able to do and you’ll be successful in a different dimension than you might have been if you had not gone to business school. And I think there’s also I live in here in Silicon Valley and you often hear comments coming up about how going to business school is not valuable. We’ve heard comments from that about that from Elon Musk and Sheryl Sandberg and various others in the tech industry.

[00:15:55.670] – Caroline

And so, yes, maybe you don’t have to have a business degree or have gone to business school to do well, but it certainly reduces it opens doors and it reduces risk, right? So if you want to be an entrepreneur and you go to business school, you’re going to have a much stronger foundation which will enable you to increase the chances of being successful if you do start your own business or you join a startup right. It reduces the chances of you failing because of some aspect of whether it’s whether it’s cash flow or not understanding the process for fundraising or not having enough strategic perspective. The wonderful thing about business school is it gives you that breadth of understanding across all aspects of business and gives you the ability to tackle any business challenge. And that is an incredibly valuable basis to have if you’re going to start your own business. So whilst people do sometimes say entrepreneur doesn’t need to go to business school and having an MBA isn’t terribly valuable for that type of profile, I completely disagree.

[00:17:10.810] – Maria

And you know, Caroline, when I was making the decision to go to business school, the very nice and very smart billionaire scion who ran the company I was working for at the time, came and tried to talk me out of it and he was making the argument, the argument about getting in as well as going. He was making the argument of, like, well, you don’t need this because the way you’re going, you’re doing so well, you’ll be running a division within X number of years anyway. And that was a good it was a very compelling argument. But what ultimately tipped the scales for me was this idea of probability of I had seen other people in this company be elevated to run a division or to perform an acquisition for the company. And then once they’re in charge of the acquisition, then they go to run it once it’s part of the it’s been sort of integrated. And I had also seen people just fail miserably. And I thought to myself, the ultimate reason that ultimately tipped me was I thought, well, if I’m going to get one of these jobs anyway, eventually, isn’t it worth it for me to spend two years to really make sure that I know what I’m doing, so that if I get that job, it’s not a guarantee of success, but at least I am limiting I am increasing the probability of success.

[00:18:16.660] – Maria

It’s not 100%, but maybe I’ve increased it from, say, 25% to 40% or something along those lines. And so that was what ultimately convinced me.

[00:18:24.130] – John

True. And now we’re talking about basic skills and tools that you gain from the MBA. We’re not even going into the whole area of the value of that network of people, like minded people who want to make a real difference in the world and who think that this degree can help them do that. And having those folks on your side as friends and at least in school as colleagues even, is a tremendous advantage for a lot of people. And I think that’s a really key part of any great MBA program. So I think we debunked a good number of very popular myths. I want to add one. I’m not so sure that anyone who does their homework would consider this a myth anymore. But I want to put it out there because while a lot of progress has been made in enrolling more and more women in business schools, I think there is still a persistent belief that business schools are largely maledominated cultures that are less welcoming to women and particularly female students. I think that is a myth today. Yes, there are fewer female faculty members than there should be. Yes, there are fewer female protagonists and case studies than there should be. But by and large, I think most business schools have very well embraced and welcomed female applicants and students in a way that makes them feel very included in most business school cultures. Do you two agree?

[00:20:02.050] – Caroline

Yes, absolutely. And actually, there’s one other thing I could add to the list of common myths. John? I sometimes speak to candidates who think that they don’t have a good chance of getting in because they have a nontraditional profile, right? So maybe they are a journalist or they’re a lawyer or even a musician. And I remember admitting a poker player. Sometimes people think that I’m not a management consultant, I’m not an investment banker. I don’t have the profile that they’re looking for. And in fact, often it’s a non traditional candidates who actually have a much better chance of getting in.

[00:20:43.470] – John

Many of the others, yeah, I love.

[00:20:45.870] – Caroline

Working with the nontraditional candidates because they often have fascinating stories and really interesting ambitions and fascinating motivations for heading off to business school and the dream of what they want to do in the future. So actually, they often have a better chance of getting in than those profiles that they think are the typical feed of profiles into business school, which, unfortunately, often there are way too many investment bankers and management consultants applying to business school. And their chances can actually sometimes be surprisingly slim.

[00:21:18.900] – John

True. Well, there you have it. All right, for all of you out there, we hope we have debunked any of the myths that perhaps you may have had about an MBA program. And what you can tell from this discussion is we are all in. We believe in this education. We’re tremendous ambassadors and advocates for it. You don’t have to convince us. Well, thanks for listening. This is John Burwood. Poets and quads.

Debunking MBA Myths
Maria |
March 8, 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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