In this episode of Business Casual, the hosts discuss significant changes in MBA programs, focusing on the closures of one-year accelerated programs at Notre Dame and Cornell University. They explore the reasons behind these closures, suggesting that schools are struggling to attract candidates to different MBA formats amid a shift towards specialized master’s programs. The conversation also addresses the challenges of managing resources for both one-year and two-year MBA programs within the same institution.
The discussion then turns to the achievements of Anne Harrison, the Dean of UC Berkeley’s Haas School of Business, who has been named Dean of the Year. Her leadership has led to significant advancements in entrepreneurship, sustainability, and diversity at Haas. The hosts highlight the impact of women in academic leadership roles and speculate on future trends in leadership at top business schools.
If you’re curious about the potential future direction of MBA programs and its evolving landscape, this episode is for you.
[00:00:07.210] – John
Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co host Caroline Diarte Edwards. Maria Wich-Vila, we want to talk about the future of the MBA. This past week, Notre Dame announced that it was going to shut down its one year accelerated program. Them that follows Cornell University decision to also shut down its one year program. And over the years, we’ve seen quite a few schools shutter their two year residential MBAs, including Penn State, which will shut down its two year program next year. We’ve had University of Iowa, Wake Forest University, Thunderbird, Virginia Tech, Simmons College all given it up, along with the University of Illinois, which went totally. You know, a lot of people may inevitably ask, well, is the MBA less desirable today or not? And why is Notre Dame, and why is Cornell, two very good, strong universities with great business school, shutting down their one year programs? Now, Caroline, you have a view on this because, of course, in Europe, most of the MBA programs are only one year, and that’s widely accepted and seemingly preferred.
[00:01:23.350] – Caroline
Yeah, that’s right. It seems somewhat counterintuitive that they’re closing their one year rather than the two year programs. As you mentioned in your article, John, there was a GMAT survey that showed know there’s been an increase in interest for one year rather than two year MBAs. And now, according to GMAC, more prospective candidates say that they’re interested in one year rather than two year programs. So they seem to be going in the wrong direction, at least at first glance. So I think maybe what’s happening here is that it’s difficult to have two different formats in the same school. I think that you have to pick your camp, right. You have to decide which model you’re going to focus on and focus on making that one successful. And having two quite different formats can be confusing for the market. So I could understand that they may struggle to attract candidates if they’re known for one format rather than the other. And I would imagine that there are additional costs involved with running two very different formats. And so I would imagine that that has become more difficult as time has gone on, and so that they have decided that they have to focus, and probably the two year programs have been their flagship programs for many years and continue to have perhaps greater success than the one year programs that were launched more recently.
[00:02:44.310] – Caroline
So I think that may be what’s happening. And I think also, as you know, this is part of a broader trend where schools are a little bit further down the pecking order in the rankings and in perceptions of quality of business schools are struggling, frankly. And my husband was at his Stanford reunion recently and the dean was talking about how he believes that there will be. Ultimately, you’ll be left with a handful of top business schools which have flagship two year MBA programs that will continue to be very successful as they are today and will continue to attract outstanding candidates, as they have done for many years and as we see them continue to do. And then you’ll have a few other options. Right. So as you said, the international MBA program is typically one year format. And that they are well known for that, that’s become part of their brand and that attracts offered a different cohort of often very international candidates who may have had less savings power than candidates coming into the top two year programs in the US. And therefore, the efficiency and the cost savings of doing one year rather than two year are very attractive to that group.
[00:04:04.030] – Caroline
And then you’ll have a somewhat fragmented market with candidates going into more and more candidates going into online programs. Right. You have often commented, John, on the growth of those one year programs and increasingly schools that are well known for having a really strong brand offering online programs like the Wharton executive MBA. And then we have seen the growth of other masters programs. So masters in data analytics, masters in management, masters in finance that have sprung up over the last few years and have absorbed and potentially have cannibalized some of the MBA programs. So I think that may be the direction that we are moving in and that perhaps these closures are part of that trend.
[00:04:56.680] – John
Yeah, that’s very true. Maria, you have a take on this?
[00:05:00.850] – Maria
Yeah, it’s fascinating to see that this is the direction that they’re going in. I wonder if part of the issue has been one of expectation. You know, Caroline alluded to the fact that if you’re trying to juggle a two year program and a one year program at the same time, you’re probably diverting your resources and spreading them kind of thin. I wonder if the one year program, if people entered the one year program that was spun out of an existing two year program and they were expecting sort of the same exact kind, maybe clearly a more condensed version, but still the same quality of education and same quality of career outcomes. And I wonder if recruiters were expecting the same quality of candidates. And I’m wondering if there’s something that we don’t know about people graduating from this one year program and perhaps not being satisfied with what they were expecting, not getting what they were expecting from it, either from an academic perspective or from a career opportunity perspective. There’s something odd going on because for many people a one year format would make a lot of sense and it’s popularity, enduring popularity in places like Europe attest to that.
[00:06:08.460] – Maria
So something confusing is happening here. But I do think that there is probably a cannibalization effect. As Caroline noted with people, the general management degree certainly has a lot of value, but there’s also a lot of value in becoming a specialist in something like data analytics or operations and supply chain or what have you. So I do wonder if those more specialized masters are just sort of taking over what you used to have to get an MBA for. Why do that when you can sort of specialize and eliminate the stuff that isn’t as relevant for your interests?
[00:06:46.690] – John
True. What’s kind of interesting is that these closures at Cornell and at Notre Dame are occurring at a time when the latest survey of prospective students by GMAC has found, for the first time ever, incidentally, that more students would prefer a one year MBA to a two year. They surveyed over 2700 people in 131 countries. 22% of those prospective students said they would prefer a one year accelerated program. 20% expressed a preference for the traditional two year program in the US. But I’m thinking in that survey that while the one year finally overtook the two year, it is such a global survey that I would bet that a lot of the people who are responding have their eye on Europe or other one year programs and not generally the few one year programs in the US. Because after all, Kellogg still has a one year. Duke has a one year. Emory has a one year. USC Southern Methodist has a one year. And then there’s the interesting phenomenon that Cornell, even though it got rid of its, or is getting rid of its accelerated one year MBA, it did launch the Cornell Tech MBA, which is a one year program, but it’s specifically designed to give an MBA to people who are interested in a career in tech.
[00:08:14.400] – John
And then you have NYU Stern, which has successfully launched two one year MBAs, but both are industry specific as well. So instead of a specialized degree in technology management or fashion and luxury field, they’re doing an MBA with a fashion and luxury slant and an MBA with a tech slant. And that seems to work. And my supposition there is that if you join an NYU stern program in tech and fashion or luxury, or you join the Cornell Tech MBA program, you have already decided what your industry is going to be. So immediately there’s more direction to your desire to have a graduate management education. And you don’t have to experiment. You don’t have to have that internship to help make you make a transition from one discipline or industry to another, which is generally the two year residential MBA is ideal for career switchers. So I think that gives the specialized MBA degree a little bit more cachet because it would be easier to place those students in the tech field or fashion and luxury field, given the fact that the whole program is around those industries and has experience or learning and projects with companies and advisory boards of executives from those companies.
[00:09:37.150] – John
So that everything is kind of working in one direction to get you that job. So even if you’re not someone in technology but want to do tech, you can do the one year tech MBA at Cornell or NYU Stern and make the transition because it’s so specialized. So there’s that. The other thing, I think there’s also outside the top 30 or so schools that are ranked for two year MBA programs. What you find is that the MBA programs, the other schools, even though they may be ranked from like 30 to 100, which puts them in a very specialized high group of schools, those programs tend to be very small. The cohorts are intimate and in many cases they are not profitable. The schools are hanging on to those MBA programs and fighting to recruit people and enroll people because they want that us news ranking. In many cases, the MBA ranking from US news is often considered to be the de facto ranking for a business school. So if you get a ranked MBA program, you can basically go in the market and claim, okay, you can get your specialty masters in supply chain management from a business school ranked in the top 50 in us news because the MBA ranking looms large over all the other programs that the school has.
[00:10:59.650] – John
Because the MBA is the only really, truly universally ranked graduate management program. Sure, there are some specialty rankings, but they’re few and far between. So people tend to rely on the MBA ranking and see it as an overall ranking for a business school. So you have a lot of schools that are hanging on to unprofitable small programs to get that ranking every year and to be able to broadcast it into the marketplace. And then you’re right. I mean, there is this expectation. So in Europe, the expectation is for a one year MBA, and it’s very popular, and that’s the preferred format for that degree. In the US, it is not the preferred format. And mainly I think it’s because of the whole career switching phenomena where most people who go into a two year MBA program want to switch careers and that summer internship is a crucial experience to help them do that. Do we think that other schools are going to follow suit. So in other words, a few one year MBA programs in the US, do you think they’re going to last? Do you think that maybe in some markets there may be an opportunity for schools to, let’s say if you have a non profitable two year, why don’t you just try a one year?
[00:12:20.180] – John
Right. Carolyn, what do you think?
[00:12:23.150] – Caroline
Well, I think possibly what has just happened with these closures shows that it’s not as easy to run a successful one year program. It’s not just a case of making a little bit faster and off you go. Right. I mean, INSEAD pioneered the one year format that started, what, 70 years ago now. Right.
[00:12:45.670] – Maria
[00:12:48.630] – Caroline
The school’s dna is based around that particular format, and everything is geared towards making that effective, and it has a lot of implications. Right. So you talked about how two years gives you more time to make a career change and so on. Well, actually at INSEAD, a lot of the students are making very dramatic career changes, but the school has an incredible careers team that will start working with the students actually even before they turn up on campus. Right. So the whole job search is really crafted around that timescale. And I would imagine that it can be difficult for the career counselors at a two year program to adjust to that very different cycle. Right. For a one year program, it is just a very different way of working. And I could imagine sort of being pulled in two different directions is quite difficult. So I think that maybe schools didn’t anticipate how difficult it is and how complex it is to run a successful one year program. And the schools that have been doing this in Europe, in many cases, have been doing this and refining this for many years. And I think it’s also a case that it’s just schools, some of the schools, quite frankly, are struggling.
[00:14:09.350] – Caroline
Right. And so having their resources spread across multiple different formats doesn’t make sense anymore. So it will be interesting to see how things progress. But I think what you said about in the US, perhaps the right formula for one year programs is to focus on a specific industry that may make a lot of sense. Right. And rather than having a generalist MBA in a one year format, which is more complex than it may initially appear.
[00:14:42.090] – John
Yeah, definitely true. Maria, any final thoughts on this topic?
[00:14:47.130] – Maria
I mean, it’s just so fascinating because I feel like there are some top business schools that are. Yale is launching a brand new master’s in asset management, which is a one year program with a very specific industry focused.
[00:14:58.570] – John
Yeah. Chicago Booth is finally offering a MIM program that’s right.
[00:15:03.860] – Maria
And so it’s so interesting to see all of these different. Some schools are launching one year programs, maybe not one year MBAs, but one year specialized programs, and yet one year MBAs at other schools are being shuttered. I’d be curious to see what happens with the established one year MBAs at places like Kellogg and Emory, for example. I would hope, and I would think that those would still maintain, because I would think that the institution itself, I know at Kellogg the one year program is very well integrated, and I know they have a lot of administrative support. So I would assume that that program is probably going to be, hopefully will still be maintained for a long time, because I think it’s an excellent opportunity for the right mean, who knows, who knows what’s going to happen? If you would have said, ok, Maria, Notre Dame is going to announce that they’re shutting down one of their two MBA programs, either the two year or the one year, I would have perhaps thought it’s the two year program. And so it’s just such an interesting times that we live in.
[00:16:03.440] – John
Yeah, definitely true. The other thing that’s happened is we kind of early on named our dean of the year. We did this in conjunction with the Thinkers 50 virtual event that occurred. And the dean of the year is Anne Harrison of UC Berkeley’s Haas School of Business. Anne had been a faculty member at Wharton before taking over the job as the host dean about four years ago. And we named her the dean of the year in part because of all the progress that she’s made in a very short time, and particularly over a time when most schools were pretty disrupted because of COVID And it must be said that the University of California is one of the more notoriously slow moving bureaucracies of all universities. And yet, under leadership, in four years, she’s brought in record amounts of fundraising, almost 230,000,000, including the largest single gift, a $30 million gift that Haas has ever received. She’s boosted the size of the faculty by 30% to nearly 100, and tenure and tenure track professors, which is highly unusual because it’s really hard to hire people given the bureaucracy there. And she’s focused primarily on entrepreneurship, sustainability, and diversity and inclusion.
[00:17:31.890] – John
Some 70% of the newly hired faculty are women, which is a big change because she’s been able to basically increase the number of female faculty at the school from 20% to 30%. She’s put a heavy emphasis on sustainability. She’s launched an online option in the part time MBA program. She’s converting the two year undergraduate program into four years, which is really the market preference in the US, so people can have the opportunity to do more internships instead of just one between the junior and senior year. And then she successfully partnered with a lot of other departments and colleges at Berkeley for everything from the Department of Molecular and Cell Biology to the School of Law and Engineering and Journalism to the College of Natural Resources. She’s launched a new joint MBA program in climate solutions. She’s broken ground on a new entrepreneurship hub for the entire university. All this in four years, which is kind of remarkable. So have a look at that. I don’t know if you two have looked at that or are familiar with what Anne Harrison has done, but she’s been a dynamite dean. And the other thing I should point out know she’s still one of the very few women who’ve been able to attain the deanship at a top business school.
[00:19:00.850] – John
Why aren’t there more women in these jobs?
[00:19:03.610] – Maria
Maria, way to throw the easy, I love these softball easy questions that you throw every week is a delight. Really? No, just kidding. I don’t know. Why aren’t there more women? And why aren’t women running the world in general? I think that the path to being a dean of a business school has always had a very prescribed route, just like the path of being a business school faculty has always had a very prescribed route in the past.
[00:19:30.790] – Caroline
[00:19:31.030] – Maria
You have to have an MBA to become a professor. You have to be a professor. And many times it’s not just enough to be a professor, you then need additional education in administration. There are actually, and I think the dean at Darden may have undertaken this. There’s like a PhD in how to be an administrator at a university. So you need additional training on top of that, usually to be considered qualified for that role. And I think that since, because these are roles that traditionally you need, like maybe, let’s say a 20 year lead time of experience, there’s going to be a lag in terms of the number of women. But fortunately, I think that this dean at Haas, she was a professor for some years. But it looks to me like perhaps Haas was willing to take a bit of a chance on her or perhaps a lot of business schools, I think, are increasingly, both with faculty and with administrators, starting to take a fresher look at identifying talent and putting that talent where it can make a difference. And maybe even if that means sort of getting rid of some of the older norms and requirements that used to be set in.
[00:20:41.290] – John
Mean. And INSEAD, for example, has never had a female dean, why do you think that’s so.
[00:20:47.570] – Caroline
No, I was just thinking about that as the school has just brought in a new dean, Francisco Velozo, who I met at the weekend at my INSEAD reunion, which was great. Yeah. So he seems wonderful. He made a speech to the alumni and I asked around to sort of get a hot take on people’s first impressions, and it was very positive. So he’s only been there for six weeks. So they kind of threw him to the fire by putting him up in front of thousand alumni to make his speech about his vision for INSEAD in the direction he wants to take the school.
[00:21:28.350] – John
Right. Because he’s been dean of two other business schools, the Lisbon School of Business and Economics, as well as Imperial College and business school in London. So he’s got a lot of interesting experience.
[00:21:42.990] – Caroline
He is. And I’m sure that that’s why they’ve brought him in. And I think especially, I think that probably he got it because of his experience in digital and online and the success that he had with launching those programs at Imperial. And INSEAD is looking to continue its digital transformation. And so they’re looking to him to lead that. So, yes, it’s a shame that the school has not yet had a female leader, but perhaps after Francisco that will be, I’m sure they looked for female candidates. Hopefully next time they will line something up. But from my experience, when I was working at INSEAD, faculty was very male dominated, administration was very female dominated, and the deans are always picked from the faculty. And so that has shifted a bit in the past few years. But there is a long way to go to bring through more female candidates. But as we see from the women who are in those dean roles, right. They are pretty damn fantastic. So we need more of them.
[00:22:51.670] – John
And Harvard and Stanford have yet to have a female dean. Of course, Wharton’s current dean is the first woman to lead that school, I predict. And if you want to make a bet, I’ll make a bet with you. Harvard’s next dean will be a woman. What do you think, Maria?
[00:23:12.190] – Maria
I certainly hope so.
[00:23:13.860] – John
I certainly hope so. It’s been a long, and Harvard actually has a number of women on the faculty who would make great deans.
[00:23:26.530] – Maria
Absolutely. Yes, for sure.
[00:23:28.690] – Caroline
Given recent events, perhaps sooner rather than later.
[00:23:32.790] – John
I think that that’s very true as well. Caroline. All right. Boy, hey. We had a really expansive conversation today that started with the decline of the one year MBA program at Notre Dame and Cornell and why and what it meant for the MBA market and the MBA of the future. Then our female dean of the year, Berkeley Haas. And now some speculation about who will the next dean be at Harvard, among other places. So stay tuned. You will find out here first with commentary. Thanks for listening. This is John Byrne with Poets and Quants.