What MBAs Can Learn from Wall Street’s Collapse of Empathy

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A version of this article first appeared in BusinessWeek.

When the financial crisis hit, the fury wasn’t just about subprime loans or executive bonuses.

It was about tone-deafness.

A total inability—or unwillingness—to understand why the public was enraged.

That lack of self-awareness wasn’t limited to a few bad actors.

It was systemic. And for MBA students, it’s a warning.

I Saw It Firsthand in Banking

As a former investment banker, I saw how a culture of benchmarking and bravado created a warped reality.

Bonuses weren’t just money—they were a scoreboard. Even a $1.1M payout could feel like a slap in the face… if someone else got $1.11M.

In this environment, it becomes nearly impossible to be satisfied.

And even harder to see how absurd it all looks from the outside.

When the public lashed out, many bankers were genuinely baffled:

Why is everyone so angry?

We worked hard for this.

But that disconnect—the insular, self-referential culture—is exactly the problem.

The Real Issue: Lack of Empathy

Many on Wall Street weren’t sociopaths. But they did assume everyone else shared their worldview:

  • Hyper-competitive
  • Status-driven
  • Obsessively money-focused

This isn’t just bad PR—it’s a failure of imagination.

If you can’t conceive of a world where someone values things differently than you do, you’ll never understand the criticism. And you’ll never evolve.

What This Has to Do with MBAs

You might think this is a Wall Street problem.

But it’s creeping into business schools, too.

A similar defensiveness.

A similar belief in one’s own “elite” values.

A similar blind spot when it comes to those outside the corporate bubble.

MBAs volunteer at charities. They join social impact clubs. But many still harbor subtle contempt for people who don’t “maximize their potential.”

It’s not about exposure—it’s about attitude.

Business School’s False Sense of Diversity

Yes, your classmates might be from Kenya, Brazil, or Korea.

But if they all worked at McKinsey, Goldman, or Unilever, it’s a cultural monoculture.

That brand manager in Chicago and that consultant in Nairobi have far more in common with each other than with a single parent working retail in Detroit.

If you don’t intentionally break out of the MBA bubble, you’ll start believing that your values are universal values. That’s how the cocoon forms.

Don’t Circle the Wagons. Step Outside Them

When business schools are criticized, the instinct is to defend.

When MBAs are questioned, the instinct is to rationalize.

But the first step toward being a real leader is understanding where others are coming from—even if you disagree.

This doesn’t mean giving up ambition or success.

It just means recognizing that other people’s priorities may be different from yours—and equally valid.

Herd Mentality Is the Real Risk

One of the dirty secrets of business school?

It’s full of peer pressure.

What classes to take.

What careers to chase.

What success looks like.

That’s how bright, thoughtful people end up following paths that make them miserable—because everyone else was doing it.

Breaking free of the herd isn’t just about self-actualization.

It’s about adaptability. Because your career will likely reinvent itself multiple times—and the people who thrive are the ones who didn’t lose themselves in the groupthink.

Need help on your applications?

If you’re looking to bring more empathy and independent thinking into your MBA journey, the MBA App Assistant offers guidance that goes beyond the usual checklist. Craft an application—and career—that’s not just smart, but self-aware.