Admissions Advice and Commonly Asked Questions
The following are articles mostly from my blog (http://mbaapply.blogspot.com) as well as magazines that I wrote for. I have also produced the video series Interview Don'ts. Enjoy!
Is business school worth it?
One of the most basic but important question I get from folks is whether an MBA is worth it (and in particular, a full-time program).
The debate seems to have been going on ad infinitum, with sentiment ebbing and flowing with the state of the economy.
From a practical standpoint for many folks who are deciding on whether to apply or not (or whether to attend or not * after * they have gotten admission!), the answer may be clearer than you’d expect.
1) CONSULTING: AN MBA IS BASICALLY A PREREQUISITE
Regardless of your prior professional background, if you’re looking to work as a management consultant at firms like McKinsey, Bain, BCG, Monitor, LEK, Accenture, Deloitte, etc. then an MBA is worth it, because you don’t really have much choice: you’re highly unlikely to get hired without one.
Even if you are a consultant looking to upgrade your brand (i.e. you work at a small no-name consulting firm and hoping to work at McKinsey), your chances are slim unless you get an MBA. And even if you are looking to stay at your current firm, you will likely be highly encouraged to go back to do an MBA (read: your chances of getting promoted to a post-MBA position are slim unless you have one).
Moreover, for many of these firms, you essentially have to shoot for the top 16 US programs (and LBS and INSEAD in Europe), since these consulting hire the majority of their incoming associates from these programs. You will get some MBA hires who did not go to these schools, but they are a minority. They will also hire some folks from law schools or direct industry hires, but for the most part, consulting firms have a highly structured (and highly stratified) recruiting process that focuses on a select number of schools.
2) FINANCIAL SERVICES: AN MBA IS A MUST IF YOU DON’T HAVE A FINANCE BACKGROUND
Regardless of what aspect of financial services you’re looking to work in – investment banking, equity research, sales/trading, asset management, private equity, hedge funds, venture capital, commercial lending/underwriting, insurance, etc. – if you don’t have a finance background and looking to make a career switch into it (even if you have corporate/business experience), then you’ll have a very hard time getting these jobs without an MBA.
The culture of financial services doesn’t value the MBA to the same degree as consulting, but it is often seen as a passport to getting in the door for those with no prior relevant experience. And areas such as investment banking focus their recruiting efforts almost exclusively on top 16 MBA programs.
Also, if you’re in a “back office” or “middle office” role at a financial institution (or you’re in any support function such as IT at a bank), and you’re looking to make that switch into revenue generating functions as listed above, then an MBA is worth it to re-brand yourself because it’s hard to make that switch without one.
While some schools have introduced specialized Masters’ programs in finance, these programs are still relatively new compared to the established MBA programs. Basically, if you had the choice, the MBA is the better bet and will give you more access to recruiters than a specialized masters program.
3) NON-BUSINESS PROFESSIONALS SEEKING A CORPORATE CAREER IN THE US
If you are coming from a non-business profession (engineer, science researcher, lawyer, doctor, military officer, teacher, athlete, artist, etc) and looking to transition into business job function, then an MBA can be extremely valuable. Although not a must like it is for consulting or financial services, getting an MBA is certainly worthwhile enough since making that transition into a business career will be easier and faster.
“Corporate life” basically includes the two industries above (consulting and financial services), but also any job function on the business side in any industry: marketing, operations, financial planning/corporate finance, business development, corporate development, human resources, investor relations, etc. In many of these jobs beyond the college entry level, they require either relevant prior experience or an MBA (and most of these firms will not hire you to start alongside fresh college grads at the entry level).
4) BUSINESS PROFESSIONALS SEEKING TO SWITCH INDUSTRIES
Basically, an MBA makes it much easier if you’re looking for a fresh start (without having to fully start over) in a new industry. For example, you’re a brand manager at a consumer products company who is looking to switch into business development at a green technology firm. Or, you’re an investment banker looking to work in sports marketing.
This also applies to social enterprise and non-profit, since the kinds of jobs you would be aiming for on the admin/managerial side tend to be staffed by “corporate refugees” who previously worked in the private sector, and tend to hire people in their own image (i.e. those with business backgrounds and/or with MBAs).
Of course, it’s certainly more possible to make this switch without an MBA (unlike the other three situations above), but an MBA will make it a lot easier for you to make that switch without having to take a huge step back in pay and responsibility.
So if any of these four things applies to you, then the answer is easy: an MBA is worth it (assuming you believe these careers to be worth pursuing), even without considering any of the intangibles or personal factors, such as the network, taking two years off for personal “me” time, discovering new interests, learning more about other careers, and so forth.
SO WHEN IS THE MBA NOT WORTH IT FROM A CAREER STANDPOINT?
Simply put, an MBA won’t have much benefit from a career standpoint if you are already working in a business job function AND you’re not interested in switching to consulting or financial services.
For example, if you’re a banker or PE guy who wants to stay in finance (in any capacity), an MBA won’t be worth it from a career standpoint, because an MBA isn’t going to make it any easier for you to change from one firm to the next, or from a PE to a HF and back again. It ultimately comes down to your transaction experience, network, and the job market in the industry - when it’s hot, you will have firms coming to you; when it’s cold, an MBA won’t help you land jobs that don’t exist.
Or if you’re simply looking to move up the ladder in your industry in a similar job function, then you don’t need to go back full-time: consider doing a part-time MBA or an executive MBA down the road.
Finally, if you’re looking to start your own business in the short-term, you are better off investing that money in wise counsel and getting that business off the ground right away while the idea is still hot in your mind, rather than spending two years in business school where you will learn mostly “book knowledge.” The biggest problem with business schools and entrepreneurship is that business schools unwittingly teach students to conceptualize their way through problems as a substitute for rolling up their sleeves and getting their hands dirty. In plain English, they confuse analysis for execution, and running your own small business often lives and dies more on the latter than the former.
THE MYTH OF THE LONG-TERM
Forget about the long-term value or even the medium-term value of an MBA. The reason why is simple: it’s debatable, it’s a matter of opinion, and it’s ambiguous. You will get more conflicting and differing opinions on this than you would on what it will do for you in the immediate term (i.e. right after graduation). Furthermore, if the value of the MBA in the short-term is limited at best in your situation, then it’s not going to be any more valuable in the medium- or long-term.
When deciding whether an MBA is worth it to you or not, focus on the short-term benefit: what it will do for you in terms of recruiting while you’re an MBA student? Will it give you access to the kinds of jobs you want immediately after graduation? While it may seem cynical to disregard the academics – the reality is, the MBA is a professional degree whose main purpose is to turn students into employable business professionals after graduation, so the academics aren’t an end in itself, but a means to that end. While business schools would like to say that they want to teach you knowledge that you can use for your entire career long-term, the reality is, the kind of knowledge and decision-making you do in the long-term will have little to do with what you learned ten years prior in b-school, and more to do with your recent experiences and lessons learned in the past three to five years. Again, the value of what you learn in business school is most relevant (if not exclusively relevant) to your first few years after business school.
In plain English, the MBA is ultimately about helping you secure the kinds of jobs in the short-term you want that you couldn’t have gotten without the degree (or would at least make it a lot easier for you to secure those kinds of jobs). That, more than anything else, dictates whether the MBA will be worthwhile to you.
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Business as a Service Profession: A Rant
I normally don't do this, but I felt I should share some of my thoughts about what I've seen as a big problem with the whole MBA culture.
As expected, I usually get people emailing me their profile, or posting it on the various discussion forums where I post. It's usually the same fundamental question: "What are my chances at school X, Y, or Z?" or "How can I improve my profile to get into school X, Y, Z?"
No issues with that whatsoever. In fact, I welcome it. I do get a bit of a kick when in my own way I find that my work has helped others for the better (not just with b-school admissions, but to see their life's work or who they are or who they *could* be in a way they may not have thought of before). And it can be incredibly humbling too because quite a number of the people I've worked with are so incredibly talented and accomplished at such a young age.
However, I did get one inquiry that frankly shocked me, but pointed to a larger problem that seems to be pervasive in the kinds of people who are attracted to business school and to business careers.
This person basically asked me whether joining the US military will help him get into business school. This person laid out the reasons for enlisting in the same self-interested manner that any other "MBA-type" person would for any business career. It was mostly about him and his self-development.
I would hope that you understand why this is a problem when it comes to deciding whether to serve in the military.
Anyhow, I wanted to use the "to join the military or not" as an extreme example of what I mean about SERVICE.
The concept of service isn't some feel-good, morale boosting concept. It's a very practical thing. So much of what the military does whether on the front line or in a support role is dependent on TEAM. No one fights alone. No one does anything alone. Everything is co-dependent. You put your life in the hands of others, as they put their lives in your hands. That level of trust and integrity between officers and their enlisted men is essential for survival. Yes, it's principled, but it's also practical and ensures the greatest chance of success and survival.
That very concept of service -- to serve others -- not just to "serve your country" in the abstract, but to serve the men and women that are working under you and above you is ingrained in the military.
Of course, as human beings there is always some element of self-interest and self-preservation, but for the military apparatus to be effective, the people involved in it have to be driven by far more than saving their own ass and wondering "what's in it for me?"
And that is precisely the problem with the MBA culture and the mentality.
There is absolutely no sense of service or selflessness -- because, for some reason, in the business world it's supposed to be "every man for himself". Some Darwinian race to the bottom of what people are willing to do to one another. It's all about ME. And not about US.
You don't have to all of a sudden quit your high flying job, or forgo going to Harvard Business School and join the Marines. Nor do you need to work in nonprofit full-time. Nor do you even really need to volunteer at a nonprofit.
It's not about "jobs" or what you can put on your resume.
It starts with the mentality that IT'S NOT ALL ABOUT YOU.
You don't have to change anything about your current situation. But a change in how you see your situation and how you approach your current situation is where the real difference lies.
Of course there will be self-interest. You want to make more money. We all do. You want a more prestigious job. Those are nice things to have. And you don't have to give up any of those desires at all. BUT, it's got to be far more than that.
You can be self-interested while still approaching your current job, volunteer activity, career aspiration, school, etc. with the mentality of:
What can I do to contribute?
What can I do to help [him/her] on my team do a better job?
What can I do to be more giving of my time, more compassionate, more empathetic?
What can I do to truly listen to what others have to say (and not just hear) and to understand, even if I don't necessarily agree with them?
What can I do to be the one *holding* the spotlight to shine on others, rather than waiting for the spotlight to shine on me?
Now, I'm sure I'll get some cynical business type (and the business types other than lawyers relish in being cynical) assuming that what I am suggesting here is somehow naive or unrealistic.
To which I challenge you -- the more self-absorbed and self-interested you are, the thicker the walls you will build around you over time. The more you care only about yourself, the less people will care about you. If you want to know why there's such a backlash against MBA types and the business community, it's precisely that. The perception is that MBAs only care about themselves, they are greedy, they are obsessed with money and prestige, and they care far more about themselves than they do about their contributions. And while such broad brush strokes may be unfair, it is rooted in some truth. Yes, med students want money. Yes, law students want money. Yes, even film students want money. We all want the same things no matter what profession we're in. We want nice houses, nice cars, a comfortable life, a powerful and respected position in our community, awards and accolades that boosts our ego, etc. The problem with the MBA culture is that it often doesn't go beyond that -- and the excuse is always "I don't have time" or "I need to pay off my loans" or "my family comes first" -- problems that for some reason some MBAs feel are unique to them and them only. We all have problems.
Many other professions have some sort of "higher cause" ingrained in the ethos of that profession - an ethos that even the most cynical and jaded doctor, lawyer, filmmaker, journalist, etc. at least acknowledges (and perhaps even a little grain of it remaining somewhere). In business school, that lack of ethos that points to some sort of SERVICE is a major problem and source for why we end up with such a nihilistic and amoral business culture.
None of the other professions are perfect by any stretch, but at least medicine has "to heal others". For law, it's "to serve the law, to bring justice to others". For film/writing/dancing/music, it's "to make art". For journalists, it's "to uncover and communicate the truth". For teachers, it's "to enrich the minds of others with wisdom and knowledge". Even for sports, no matter the hijinks or egos of some athletes, few if any athlete feels they are bigger than the sport they play.
What is the ethos of business? To simply enrich our own pockets? (the "shareholder value" argument is a masquerade for self-interest). To say that it's self-interest or to maximize profit isn't an ethos rooted in anything human or aspirational. It's simply nihilistic.
Maximizing profit or shareholder value is HOW we stay in business. But it's not WHY we do business. And so many of us in the business world have failed to separate that.
Who knows, maybe with this economic crisis, a new idealism and ethos may become codified within the business community to replace "shareholder value as the sufficient end in itself". Business schools have a part to play in that, as do MBA students and applicants alike. It starts with all of us.
Service. Business as "service". Business leadership as "service" - to serve others, to serve constituents. I'll let you ponder and decide what that means to you specifically.
Soldiers lay their life on the line for their fellow soldiers. A ship captain lays his life on the line for his shipmates. A pilot who safely crash lands in the Hudson uses his brief celebrity to fight for the rights of his fellow pilots and to lobby for greater safety measures. Firefighters lay their lives on the line to save people everyday.
These people are heroes, but many of them will say that they are simply doing their job. Why? Is it purely out of modesty? Or is it because there is an ethos of service embedded in their profession that is hammered into them from the day they sign up, which encourages them to act in such a selfless manner?
And to the cynical who feel resigned to the fact that the business world, the MBA, etc. "is what it is" and can't change or that any goodwill you do will be a lost cause, I challenge you as follows: If you are so cynical to have no faith in others, why bother living at all? If you have no hope, then each day you get up your body and mind may be alive, but your soul sure isn't.
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What Matters Most and Why?
This article was originally published in MBA Diversity Magazine.
As a business school alum who graduated a couple of years ago, I have seen both myself and many of my classmates go through many changes since we donned our graduation robes. While I can only speak for myself, I am sure many of my colleagues probably feel the same way as they go through their lives and careers. The following are some lessons learned through experience that I would like to share.
If you do not know yourself, you will have a hard time finding out what matters most to you. Knowing yourself is not an intellectual exercise nor is it an introspective backpacking vacation in Europe. It is about getting out there, trying new things and discovering who you are through real experience. You only know who you are by what you have experienced. The better you know yourself, choices that you once thought were life-altering such as which firm you should work at or even what career you should pursue become less important or even trivial. If you know yourself, what you may think are goals turn out to be means to another end. This is one of the primary reasons why so many MBA graduates a few years out are not as rah-rah career as the spring chickens coming straight out of school. Somewhere along the way, life happens to many of them and for most MBA grads, like the rest of the general population, other things in their lives take priority and the job is just that – a job that is a means to an end and not a point of conversation in a cocktail party.
Separate your ego and self-esteem from your job or career. This is one of the most important lessons I have learned, and one that I think many of my business school classmates have learned as well. Once you can separate self-esteem and career, whatever satisfaction you derive from a job is genuine and not there to feed your ego. For many folks, prestige or money are often cheap substitutes for lack of self-esteem. Knowing what is truly important to you and having the fortitude to follow through on what you believe in means that none of the prestige or money over and above a certain level of dignity and sustenance will be as important as it is for a person sleepwalking through life. Such a threshold is far lower than you think. So many of the things we buy are substitutes for happiness anyhow. When you know what it is that keeps you happy, a lot of the things you used to buy tend to disappear from your consciousness.
Finding out what you enjoy doing is not about divine inspiration. It is as simple as trying new things – whether it is taking a class or workshop on something you are intrigued but know nothing about to helping out people in the community by sharing your skills or expertise. If you enjoy it, you will do it more. If you do not enjoy it, you will move on to something else. If you continue to put yourself out there, you will find things you enjoy and, more importantly, become much more engaged and alive in your daily life. You will also become more interested in the world around you than you are about yourself. You will however never find out what you enjoy through inspiration, introspection or logic. Thinking your way through what are matters of the heart will trap you into self-absorption and inertia while life passes you by. Finding out what you enjoy is a process of discovery, not a process of deduction.
If you do not know what to do or are bored, you are not doing enough. Worse yet, you are sleepwalking through your life. Most of life’s major decisions require a leap of faith that no amount of intellectual introspection or rationalization can substitute for. One of the most important traits is trust – believing in yourself and believing in others. That is not just the foundation of leadership but it is what fuels compassion and conviction which gets you through the inevitable tough times. Most of life’s great milestones large or small happen because someone took a leap of faith and decided to follow through on a choice they made – to stand up to social injustice, to marry and become a parent, to follow one’s lifelong dream, or even to decide which restaurant to eat in. There are no right or wrong choices, and even stronger or weaker choices are always up for endless debate. At the end of it all, it is just a choice. Making a choice comes from the heart and having the guts to follow through on the plan your brain had put together.
Learning to be responsible for your own happiness is the single most important attitude you can have. This is easy to do when you are having fun and enjoying life. It is much harder to do when times are tough like they have been in the last few years for many people. While you can ascribe any misfortune to circumstances beyond your control, you have no one to blame but yourself for being bitter about it. However, if you take ownership of your own state of mind, you are better able to overcome and endure the hard times and misfortune that come your way.
Everything goes in cycles. Whether it is job markets, housing prices, fortunes, careers, relationships, sports teams, your ego, or your temperament – everyone experiences multiple cycles in their lifetimes, even those who you think are always riding the gravy train (because few people like to disclose the fact that their chips are down). Get used to it, as these cycles are an unavoidable fact of life. Good times do not last forever, but neither will hard times. What matters is not giving up on yourself in the hard times, but keeping your head above water when times are great.
We all make mistakes. Learn to forgive yourself when you do screw up – even if it is a major one. If you cannot forgive yourself, you will be stuck in stasis and will find it difficult to move on with the important things in your life – most notably being fully engaged in what you are doing at this very moment. It is okay to fail and learn from those failures. If you do not fail at new things, you will not succeed at anything new either.
If you do the small things right, the big things will follow. Being ‘great’ at anything is about working on the small details. Being a great manager or leader starts with simple things like acknowledging a subordinate with a ‘hello’ and taking the extra ten seconds to express gratitude for someone’s efforts. Caring about your community or social cause starts with helping that elderly lady cross the street. Seeking a better work-life balance begins with a simple five minute walk each day alone. Small things lead to other small things and, like compound interest, they can result in dramatic changes over time if you do those small things well and do them consistently. This is not about brains or talent, but about effort and heart. If you cannot do the small things required to ‘meet your goals’ whatever they are, no amount of talent or aptitude will help you get through the crises that will inevitably come your way.
Just do it. The old Nike slogan is probably one of the only advertising slogans that can be a valuable mantra to live your life by. So many type A personalities, especially highly educated ones, spend inordinate amounts of time rationalizing and reaffirming why they should hold off for now, or weighing pros and cons about this or that. It is called spinning your wheels. If murderers can rationalize why they kill, we can surely rationalize just about anything we put our hearts to. Just Do It. Dammit!
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Why Is Listening The Most Important Skill?
This article was originally published in MBA Diversity Magazine.
In many respects, we are living in a golden age of communication.
Using voice-over-IP services such as Skype, we can call potential business partners in Mozambique for less than the cost of a Starbucks coffee. What used to be prohibitively expensive is now an afterthought that the only remaining inconvenience is getting woken up in the middle of the night by someone who cannot figure out the time zone difference.
We can share our vitriolic rants on the current administration for anyone to read on Blogger, network with fellow musicians, filmmakers and scantily clad teens on Myspace, share our harrowing home videos of the Lebanon-Haifa bombings on YouTube, trade business contacts with former colleagues on LinkedIn, gossip about our classmates on Facebook, flirt with a potential life partner on Match, post our raves about a particular film on IMDB, and talk to complete strangers on iChat that we would never meet in the flesh.
At work, we can cc: and bcc: an infinite number of colleagues who need to read the tome we wrote about our “two cents’ worth on next week’s conference call”. Once we have patched all of them through our multi-conferencing system the following week, we can then at the click of a button instantly send pictures taken from our cell phones of our boss picking his nose to everyone else in the office. Actually, scratch that. We can just post the photo on Yahoo!’s Flickr for the whole world to see the chump that we work for.
So much of the interaction we would have conducted face-to-face in the past can now be conducted virtually. We can contact more people than we ever could before – yet we have never felt more alone at the same time.
And perhaps that’s where the dichotomy lies. For all the gadgets and software do-hickeys that surpass any Star Trek geek’s wet dream, maintaining close real life relationships has never been more difficult.
There is no reason, however, to believe that the advent of all these communication tools causes social isolation. Nevertheless, we have a harder time expressing ourselves despite all the communications tools at our disposal. A recent study by Duke University sociologist Lynn Smith-Lovin suggests that a quarter of all Americans have absolutely no one to confide in. Not one person to share the good news about a promotion, or to talk about a bad day. Moreover, nearly half of all Americans admit they only have one person to confide in – namely, their spouse (I’m guessing the other half must be divorced). This level of social isolation has doubled over the past two decades.
We have no problems making small talk with the eBay seller halfway across the country, but we have a harder time introducing ourselves to the neighbor living across the street. What used to be considered a social custom twenty or thirty years ago of getting to know your neighbor would now brand you as a “freak” in most cities. We could be living next to the world’s most feared terrorist or an underground meth lab, and never know.
We have thousands of MySpace friends, but fewer and fewer "in the flesh" friends. We spend more time interacting with the clinical form factor of a computer screen than we do responding to the organic reactions of a human face. We’ve learned to become more accustomed to the LOL acronym than the sound of a cackling laugh; we type ;-) more often than we actually smile; we insert emoticons as cheap substitutes for more precise words. At the rate we’re going, we’ll all be emotionally retarded by the time we’re senior citizens when Yahoo! offers a whopping thirteen different emoticons to reflect the breadth of human experience (a fourteenth emoticon was in production, but was discontinued due to cost cutting after a particularly contentious quarterly analyst conference call).
We have hundreds of people in our LinkedIn network, but few professional contacts or mentors we can truly rely on and trust. With Outlook, Blackberry, PDAs, video conferencing and VOIP, we can communicate with colleagues, customers, suppliers and investors across the globe in an instant. But the language of the workplace has never been more full of riddles, double-speak, innuendo and jargon than it is now. Never say what you mean, and never mean what you say – an all-spin zone that would make FEMA blush.
We can deliver our political viewpoints globally on our blogs, but we have a harder time discussing any issue in a civil manner. Never have we been more polarized on virtually every single issue. Communication has become a one-way street (“This is what I’ve got to say!”) rather than a two-way discussion based on mutual respect. We are no closer to accepting or tolerating one another, let alone understanding each other, even though so many viewpoints are just an instant click away.
Thus far, all these communication technologies that media pundits, technologists, venture capitalists, and resident geeks hype as the “great new thing” have only added to the quantity of our interactions, but have done little to improve the quality. And nor should it – the quality is our responsibility. We just mistakenly believe that the technology can do the heavy lifting for us. We can now all speak at the same time, but are any of us really listening? Communicating our views is easy. Understanding each other is hard.
The foundation of any quality human interaction is listening. It’s the bridge that connects us with them. It’s the carpet we roll out for them to walk on. And until we stop talking and start listening, all these technologies are good for is generating more white noise.
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Is taking an ethics oath a good idea?
A recent story about Harvard Business School students taking an oath of business ethics seems to have caught wind with a few media outlets. The Huffington Post picked it up, NPR interviewed two HBS students about it, and even Michael Lewis ("Liar's Poker") referenced it on CNN's Fareed Zakaria.
In my opinion, I'm all for it. Why not? What is the harm in pledging to act in good faith? At worst, it won't do much good, but at best it can have a marginal effect.
Again, an oath alone won't solve all of our problems, because the underlying problems are complex and multifaceted. However, from a human standpoint I think it's a great thing that some business school students are trying to do the right thing.
Or to put it another way, the cyncism and jaded mentality of human behavior ("assume the worst, always") is what I call the Dick Cheney School of Psychology. That kind of negative, fatalist view of the world may not be the primary cause of bad behavior, but it certainly can be an important lubricant used to justify bad behavior.
It's the common refrain and tone you'll hear from those who were part of the problem:
"it's human nature to be greedy and bad"
"people will always cheat and steal if there's incentive"
"between my own ass and someone else's, I'd save my own ass at all costs"
All of which is true. But the cynic's world view (i.e. many MBAs and business types of the past) is to see that before anything else. To be far more willing to see the bad in people, and less willing to see the good. And that, in itself, is a naive view. Because everyone has the capacity for both, given the appropriate circumstance and frame of mind.
It's sort of that view that "if the whole world is a race to the bottom, why fight it, join that race!" which precisely leads otherwise upstanding people to justify why they're doing bad things.
That's why if an oath at least helps to be even a small counterpoint to the cynicism that could creep in over time, then I'm all for it.
Because I am willing to bet that those who have misbehaved or will misbehave do so because they don't want to see the good in themselves or in others -- regardless of whether such misbehaviors are "illegal," or legal but ethically questionable. They are more willing to discredit the good, and amplify the bad in others as way to justify why their misbehavior is "par for the course". Because if they did see more good than bad in themselves, the misbehavior would be incongruous to who they are -- and they would simply own up to their wrongdoing when caught, and apologize without making any excuses for it. And even if they weren't caught for their misdeeds, they would at least feel guilty or remorse for what they did IF they didn't have such a cynical view of themselves and of others.
Again, an oath is a good appetizer, but not the "main course." The main course is still a change in regulation and corporate governance. but that doesn't make the appetizer worthless.
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What can MBAs learn from the Wall Street debacle?
This article originally appeared in BusinessWeek.
Watching the financial crisis unfold over the last year, I was struck by how utterly tone-deaf the financial-services industry has become to the sentiments of an enraged public. Junior analysts and senior managing directors alike seem to be genuinely perplexed by why their industry is being ambushed about their compensation, lending practices, and political lobbying. However, Wall Street's obliviousness serves as a cautionary tale for MBA applicants, students, and even alumni.
As a former investment banker, I experienced firsthand how an insular and self-referential culture could lead to a warped sense of reality.
Take the yearend bonuses as an example. To many bankers, the bonus isn't just a dollar figure, but a symbol of their entire self-worth. Simply put, it is their sole way of keeping score vs. their finance peers. As such, from the fresh-faced Ivy League graduates to the managing directors and partners, it is unacceptable to tell anyone within the firm (or anyone else save your family) that you are "satisfied" with your bonus.
As a result, the crestfallen banker does not feel strange for complaining about his $1.1 million bonus because a less-deserving colleague received $1.11 million. And when an enraged public attacks them for taking gigantic bonuses as layoffs ravage the middle class, they fail to understand why. After all, that banker has spent virtually every waking hour benchmarking himself against other finance professionals. They fashion themselves as Masters of the Universe without realizing that they've turned into Marie Antoinettes.
Lack of Empathy
The Wall Street culture becomes so self-referential that investment bankers assume everyone else shares the same level of hypercompetitiveness, nihilism, and preoccupation with money as they do. This insularity makes it very difficult for many in the industry to truly empathize because they genuinely see themselves as aristocrats to a plebeian mass simply because they make more money. That sense of oblivious elitism and earnest belief in their capital "I" importance is what feeds the public anger—not jealousy.
So now the public wants blood. "Off with their heads," they say, with taxes, fees, fines, regulation, and even imprisonment being the modern equivalent of the guillotine. The attacks only serve to feed the "poor me" syndrome on Wall Street, which in turn further infuriates the public.
Business schools are experiencing a similar (albeit less hostile) reproach—with countless articles lambasting the degree program, making some students and administrators feel ambushed and confused.
When responding to fair or unfair criticism from others, the worst thing MBA students and administrators can do is to follow Wall Street's example by circling the wagons. Instead, taking the temperature down on both sides starts with a willingness to understand, on an emotional and subjective level, why someone would feel that way. Without having true empathy or compassion for others from different socioeconomic backgrounds, no amount of rational explanation or justification will be heard.
Simply put, MBAs need to be fully aware that not everyone shares the same values, priorities, or points of view. Everyone wants higher pay, a more prestigious job, and a cushy standard of living—but not everyone values these things to the same degree that many MBA students do. That does not make the premium that MBAs place on these values better or worse, wrong or right—just different from the value assigned to them by people in other professions.
B-Schools' Illusion of Diversity
This blind spot stems from a false sense of diversity within the MBA classroom—the McKinsey consultant in Kenya and the American P&G (PG) brand manager have more in common than either of them do to the autoworker at a Ford (F) assembly plant or the goat herder in rural Namibia. Like the Marie Antoinettes on Wall Street, MBAs are more prone to developing a huge blind spot when it comes to feeling true kinship with people from different socioeconomic backgrounds. Students may even volunteer at local charities, but some may still develop contempt for those they see as beneath them. It's more a question of attitude, not merely exposure.
Another way for students to avoid becoming cocooned is to make a concerted effort to seek out and participate in activities where there are virtually no other MBAs. There is a tremendous amount of herd mentality in business school. One of the most negative by-products of a collaborative and team-oriented environment is the tremendous peer pressure to conform—what classes to take, what career choices to value, where to live, and so forth.
Why is all of this so important? Because chances are, most if not all working professionals will have to start over in a completely new career at least a few times in their lives (once every 10 to 20 years), whether they are MBAs or former Wall Streeters. The more cocooned one is, the harder it will be to make those nonlinear transitions beyond the business or corporate world.
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