The Demise Of The MBA + How Schools Are Dealing With The Supreme Court’s Affirmative Action Decision
Maria |
July 26, 2023

In this episode, our hosts dive into two super important topics related to the recent Supreme Court ruling. First off, they tackle the whole MBA scene, the perceived decline of MBA programs, and what that means with fewer applications and program closures in US MBA schools. They’ll also shine a light on the positive side, talking about the resilience of MBA enrollment and the growth of online MBA programs that make up for it. They also take a look at the rising popularity of MBA programs in China and India, and why they’re becoming promising alternatives after the Supreme Court ruling.

To wrap things up, they talk about the aftermath of the Supreme Court’s decision on affirmative action and share how certain business schools are tweaking their essay prompts to get a better picture of candidates’ backgrounds without straight-up asking about race or ethnicity.

Listen in as we break down how the recent Supreme Court ruling impacts MBA education and affirmative action!

Episode Transcript

[00:00:06.970] – John

Well, hello, everyone out there. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co hosts Caroline Diarte Edwards, Maria Wich Vila. We’ve got two topics for you today. One is the MBA’s demise, and we’re going to talk about that in the context of a column written by the former CEO of GMAC, Sangeet Chauffla, who entitled his essay reports of the MBA’s demise are greatly exaggerated. We’ll explain why he thinks that and what we think of his perspective. And then we want to talk about the aftermath of the Supreme Court decision on affirmative action and how some schools seem to be responding, changing their essay prompts, and getting that things that may help them admit a diverse class in the aftermath of a ban on outright affirmative action. First, let’s talk a little bit about the MBA’s demise. We know, obviously, that we’ve had a few years of declining applications to US. MBA programs, and there have been a number of program closures as well, which is partly the reason why some people might think the bloom is off the rose of the MBA degree, which, as Sangeet points out and this is really true.

[00:01:30.900] – John

It’s the greatest educational innovation of the 20th century because it is, in fact, still the number one graduate degree in America today, despite some decline. His argument is that you need to look at this in a global context. So while residential full time MBA programs in the west have declined and some have fallen to the wayside things in China and India have heated up, schools have gotten better there, and the market has shifted in the same way that the market in the automobile industry shifted from GM to Toyota to Volkswagen to BYD in China. And what we’re seeing here is nothing more than the ebb and flow of the economy and how that changes the dimensions of the demand for the MBA. And at the same time, he’s pointing out, which is something that we’ve pointed out in the past, that if you look at the growth of online MBA programs, you have seen explosive growth in the US. That more than makes up for any possible decline. And in fact, overall enrollment in MBA programs is probably at record levels, given the online MBA phenomena. Maria, what do you make of all this?

[00:02:48.150] – Maria

I think that he makes some really excellent points in his article, so everyone should go check it out, because I think he’s really thoughtful, and I think that it’s easy for people to fall into a pattern of hand wringing over everything. These numbers are down and these numbers are down. But he brings up really good points about the points that you brought up, about the overall numbers going up and just the demand and the locusts shifting more to Asia. The other point that he made that I thought was really insightful was that when a company is growing, it tends to hire MBAs because the MBA has sort of a general management strategic perspective versus when a company is cutting costs. They tend to hire people from the specialized Master’s programs, which are shorter in duration, much more tactical, much more hands on in one specialized area. And that was sort of a differentiation that I had never thought of before. So I think the overall category, I not only think that overall enrollment in MBAs total is probably the same or going up, as you pointed out, but in fact, if you broaden that umbrella to cover graduate education in business related topics, I think it’s overall very strong and will continue to be strong.

[00:04:00.840] – John

Yeah, very true. He makes a point too, and this is kind of interesting, is that for every MBA program in the US. That is closed with 50 to 100 student intakes, they’ve been essentially replaced by programs in the east with 500 to 1000 Cohort programs. Which is true. In fact. Caroline, you’re our global expert. What do you think?

[00:04:24.870] – Caroline

Yeah, I thought it was an excellent article, and I agree that it was a very interesting point, as Maria said, about his distinction of how companies will often recruit MBAs versus specialized masters. And then, of course, it’s true that a lot of those specialized masters are offered by business schools. So business schools have innovated, and they’re offering different programs beyond just the traditional full time MBA programs. So whilst there may be closures of some MBA programs, there are also new programs opening all the time. So it’s not as if there is a demise of the business course sector as such. Definitely not in the US. And I liked his segmentation of the market in how he talked about you have the elite programs in the US. Particularly, that are doing incredibly well and will continue to do incredibly well, and then you have the international programs that are in the one year programs and therefore more attractive to candidates who are looking for a lower cost option, and then you have the online programs. Right? And so there seems to be a sort of segmentation where candidates are choosing one of those three different options.

[00:05:45.470] – Caroline

And if your program doesn’t fall into one of those categories, then, as he says, you may find yourself in the mushy middle, and that’s not a comfortable place to be. And so I think that’s why we have seen the demise of some programs, particularly in the US. Where they struggle to compete with the other options that candidates have now, right. Which they might not have considered in the past. It’s a much more global market than it used to be, or any in the US. Or a much more national market in the US. For candidates who may not consider going abroad, but they may consider other options in the US. Beyond their local area than they might have considered in the past. And so some of those more local options struggle to attract candidates because, for example, why not do a great online program from a prestigious MBA versus choosing a local no name business school MBA option? So I thought that segmentation into those three buckets was quite interesting.

[00:06:51.490] – John

Yeah. And yesterday we had the second day of our online MBA festival. And what’s interesting is we interviewed current students along with admission officials, and many of the students were in that 20 something pocket, which is usually obviously the sweet spot for a full time residential program. And for whatever reason, maybe it’s through the sole earner in their family. Maybe it’s because they just have a job. They don’t want to leave. They’re happy there. They don’t want to go off for a year or two years and would prefer to get the degree online. So you’re also seeing some of this different kinds of segmentation, even in the online MBA market, that’s drawing some people away from the residential full time market. I had to laugh, Caroline, at your use of the word mushy and, of course, your English accent, because it brought me back to the days of stopping by a pub on a road trip in the UK and having fish and chips with those mushy peas.

[00:07:52.970] – Caroline

Mushy peas. I love mushy peas.

[00:07:55.750] – John

There you go. The other thing I think that needs to be pointed out, too, is that we obviously follow very closely and speak most about what I would call the elite programs, the most highly selective programs in the world. And even though in those programs applications may be down, they are still highly selective. Their applicant pools are incredibly deep. It’s very competitive and very hard to get into those schools, which is why Caroline and Maria are in the business that they’re in, helping people get into them because they’re not very easy to get into. And there’s no shortage of demand for programs that have great brands, terrific alumni networks, the best and brightest faculty, and in fact, the best and brightest students. So there is that truth in the marketplace. So when you read the naysayers out there about the decline of the MBA, you got to remember, they may be talking about the closure of a second or third tier MBA program that had 50 people going to it once a year and was in the red. They’re not referring to Harvard, Stanford, Kellogg, Columbia, Dartmouth, et cetera, which is at the high end of the market and still is incredibly strong and robust.

[00:09:19.400] – John

The other thing about business education in general is business schools, I think, have never been stronger, and here’s why. Most schools have capped their undergraduate enrollment. So if they have undergraduate business students, there are so many people who want to major in business today that they can’t accommodate all of them. So in most of the schools, there are limits, quotas that prevent many people who want to major in business from majoring business, because there’s been such an explosion in undergraduate enrollment. And Maria mentioned the specialty masters market. That market has exploded with specialty degrees now in sustainability, in, obviously, supply chain management, which is a very hot topic, business analytics and the traditional finance, accounting, and marketing specialty master’s degrees. Most of the schools out there have a large portfolio of these degrees, and they’re quite popular, and the employment rates out of them are very good. So you look at the overall picture, and business schools probably have never been in a better position. Let’s talk about the Supreme Court’s decision. After the Supreme Court made its decision on affirmative action, we had a podcast and we did an instant analysis. Now we’re seeing more of a market response out there.

[00:10:38.910] – John

Caroline, what are you seeing?

[00:10:40.640] – Caroline

So there have been a number of changes to essays, so some new essays or tweaking of the wording of existing essays. And I found this very interesting because maybe I’m reading too much into the tea leaves, but I do think that a lot of this is in response to that decision. Well, so one obvious change is that HBS has actually taken out a question relating to candidate background. So they have taken out a question that read, we understand that your racial, ethnic, and cultural background may not be fully captured by the above options. So that was referring to the checkbox, right? The racial ethnic checkbox. Please feel free to use the space below to share more about your racial, ethnic, or cultural identity. So they have taken that out. But on the other hand, other schools have asked questions where they seem to be inviting candidates to say more about their background. So it’s interesting that HBS is taking question out and other schools are adding questions in.

[00:11:42.660] – John

And they may be more sensitive to this because the two cases involved Harvard and UNC at the Supreme Court. So they’re probably in the overreaction stage.

[00:11:53.590] – Caroline

Yes, they’re in the hot seat, right? So they probably deleted that pretty quickly. So, number of changes. So I’ve noticed changes at Kellogg, Tuck, Fuqua. I’ll start with Kellogg. So Kellogg has two brand new essay questions. So the first essay asks about so it says, Kellogg leaders are primed to tackle today’s pressing concerns everywhere from the boardroom to their neighborhoods. Tell us about a time in your life where you’ve needed a combination of skills to solve a problem or overcome a challenge. Which skills did you use and what did you accomplish? So I think that the use of the word neighborhoods in there is interesting, right? It’s looking at the context of people’s life experiences beyond work. It’s not just looking for stories about their professional experience. It’s looking at their life experience as well. So I think that’s quite an interesting addition to the wording there. And then essay two is more pointed. So the new question is, at Kellogg, our values are based on research that concludes organizations comprised of leaders with varied backgrounds and perspectives outperform homogeneous ones. How do you believe your personal and professional experiences to date will help to enrich the Kellogg community?

[00:13:21.730] – Caroline

So that’s really looking to tease out stories about how candidates have been in diverse environments or perhaps they have a diverse background. So I think schools are really trying to signal to candidates that they want to know about their background. They want to understand their stories of what has shaped them. They want to really understand their personal story and not just their professional story, and to send a message to candidates that they are committed to building a diverse classroom in the context where they know that candidates know that they are not able to take those checkboxes into account. I think, you know, they have tried to be more explicit in the essay questions to signal to candidates, please tell us your personal stories. Right? And so with Tuck, for example, they have a new question tell us who you are. How have your values and experiences shaped your identity and character? How will your background contribute to the diverse Tuck culture and community? And then they also have a new question describe a time you meaningfully contributed to someone else’s sense of inclusion in your professional or personal community. And CBS has also reintroduced an old question about diversity equity inclusion, which they had dropped, I think, for a couple of years, and they’ve reintroduced that.

[00:14:56.430] – Caroline

So the question is about let me just bring this one up. So the new question is the Phillips Pathway for Inclusive Leadership is a co curricular program designed to ensure that every CBS student develops the skills to become an ethical and inclusive leader. Through PPIL, students attend programming focused on five essential diversity equity inclusion skills. It describes those. Tell us about a time when you were challenged around one of these five skills. Describe the situation, the actions you took, and the that’s, you know, clearly a dei question that was dropped and then has made a comeback. So I think know the schools are looking to signal to candidates that they know they’ve made statements as well, right, right after the ruling came out from the Supreme Court that they remain committed to building a diverse classroom. But I think that they are trying to signal to candidates that they are explicitly looking for those stories from them in their essays because they will be blind to those racial ethnic checkboxes. Right. So they need the candidates to be more explicit in telling them about their backgrounds in those essays.

[00:16:14.910] – John

Right. Caroline, do you think your tea leaf interpretation is on the mark? I think it is. The other thing is, I think people are looking for more detail so that they can admit a diverse class without saying it’s a minority. Right. So, in other words, if you put more emphasis on, and we mentioned this before, income or first generation or you get more information on one’s backgrounds and the adversity that they had faced, it’s more colorblind, but it’s still looking for people who’ve been able to overcome difficulties in a way. Right?

[00:16:52.530] – Caroline

Yeah, that’s right. I think also schools have been preparing the ground for this for some time. And of course, this legal case, I think has been running for like ten years. Right. It’s been running for ages. And so schools knew that they knew that this was going to happen and they knew what the likely outcome was. I was talking with someone from MIT recently and he well, actually, I was talking to him the day the decision came out and he, you know, we’ve been anticipating this. Right. They knew it was going to course, you know, they have a lot to digest because it’s a very complex ruling, it’s a very long ruling and there’s a lot for them to figure out in terms of how they implement this. But I think it’s interesting, MIT last year, they introduced an optional short answer question and I think that that was in anticipation of this decision. So they introduced a question last year which reads, how has the world you come from shaped who you are today? For example, your family, culture, community, all helped to shape aspects of your identity. Please use this opportunity if you would like to share more about your background.

[00:18:05.200] – Caroline

So that’s an optional question. 250 words. Right. So it’s about half a page. So I think that they were anticipating that at some point they’re going to be looking to the essays to learn more about people’s backgrounds because they won’t have access to that checkbox anymore.

[00:18:23.180] – John

Right. Maria, your take.

[00:18:25.490] – Maria

Yeah. In addition to all the changes that Caroline pointed out, there was a subtle thing that I recently, only recently noticed about the Columbia Diversity essay. This was an essay that did exist a few years ago and they brought it back. But I think it’s interesting that there are some little subtle changes to the wording that I think means that the bar is being raised. So I think schools when some of these issues really started to come to the fore of the national consciousness or perhaps international consciousness a few years ago, and schools began sort of introducing some of these diversity essays, it was more around talk about exposure that you’ve had to diverse people. And now I think the bar is getting progressively higher for OK, it’s been a few years now that we are all more aware of these topics. So are you actually doing things about it? So, for example, this is so subtle, but the CBS diversity, the Phillips Pathway for Inclusive Leadership, it used to say, it listed out these five different creating an Inclusive Environment, mitigating Bias and Prejudice, and these sorts of five topics around diversity. And first of all, they’ve updated the language a little bit.

[00:19:38.620] – Maria

So before there were a few opportunities for you to be a little bit more broad. Like one of them was called Managing Difficult Conversations and it’s been changed this year to Managing Intercultural Dialogue. So I think maybe when they first had this question a few years ago, people who had not done anything with people who were different from them were like, oh, a difficult conversation was a time that I told my boss that I wanted to raise. But now they’re making it more specific so that people can’t kind of wiggle out of it. And the core question used to say, tell us about a time you were challenged around one of these five skills and now it’s describe a time where you had the need to utilize one or more of these five skills. So before you were challenged around one of them and now it’s like utilizing to me has a much more proactive connotation. And so I think that they are really trying to raise the bar and I think there are a few other little subtle examples as well. Another school that has changed its essay questions to I believe also incorporate places where people can talk more about their background is Yale.

[00:20:46.130] – Maria

So for years, Yale’s question, they had one question and it was describe the biggest commitment you’ve ever made. And now they’ve got a couple of different options where you can still answer that one if you want. But they gave you an opportunity to talk about a community that you’ve contributed to and learned from and also the biggest challenge that you’ve ever faced or a big challenge that you’ve faced. And so I think that they’re basically opening the door for people to talk about what’s meaningful to them, but just perhaps in slightly different ways. My take on it is that they are still fundamentally the same question. They still want to know what’s important to you but they’re kind of providing different flavors of it so that you can talk about things like coming from let’s being the first in your family to go to college, for example, or coming from a less affluent background, for example.

[00:21:37.710] – John

Right? Yes. And I’m sure that more schools are going to be changing things around a little bit more. Probably we’d see more of an impact next year because in some cases, even though the Supreme Court decision was anticlimactic, everyone assumed that the court would ban affirmative action admissions policies. The full brunt of that and much of the thought about it and how to change admissions policies still lags to some degree. I know some admissions officials who told me they’re having trouble getting real guidance from the legal department about what they can and what they can’t do, just like within weeks before the decision was made. So they felt paralyzed, in fact, to change or do anything about it until a decision was rendered. People could read the decision closely and see if there are other ways that they could sort of get at what they need to get at in crafting a good class. So I would bet the biggest changes will occur in the next admission season when people have had the time to really think about this and figure out, okay, how do we still recruit, admit and enroll a highly diversified class of MBA students?

[00:22:59.450] – John

So we’ll see that, I’m sure, in the next round. Okay, so there you have it. Is the MBA in demise? No. Are business schools in trouble? No. Are business schools changing what they ask of applicants to get a better read on them and make better selections? Yes. All your answers to all the MBA questions are answered here at Business Casual. Thanks for listening. This is John Byrne with Poets and Quants.

The Economist Dis on MBAs: Is the Degree Still Worth It?
The Demise Of The MBA + How Schools Are Dealing With The Supreme Court’s Affirmative Action Decision
Maria |
July 26, 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

New around here? Iโ€™m an HBS graduate and a proud member (and former Board Member) of AIGAC. I considered opening a high-end boutique admissions consulting firm, but I wanted to make high-quality admissions advice accessible to all, so I โ€œscaled myselfโ€ by creating ApplicantLab. ApplicantLab provides the SAME advice as high-end consultants at a much more affordable price. Read ourย rave reviews on GMATClub, and check out our free trial (no credit card required) today!