Episode Transcript

[00:00:07.690] – John

Well, happy 2023. This is John Byrne with Poets and Quants. You’re listening to Business Casual, our weekly podcast. And we have a new year, and we have some predictions for what might happen, along with things that we would like like to see happen that may or may not happen. With my co host, Maria Wich Vila and Caroline Diarte Edwards, we’re going to peer into the year and the crystal ball and talk about some trends that are emerging and things that will be changing in the world of business schools. Among them, clearly, will be some significant changes at Harvard and Stanford, both of which are looking for new MBA admission directors. And that is going to be a big story, probably in the first quarter, first half, certainly, of the year, when those folks are announced. And then we’ll see what subsequent changes that they put through in the admission practices at both Harvard and Stanford, which, after all, attract the most applicants of any business schools in the world. But I’m going to start with Maria and have her give us her prognosis for what she sees happening in 2023.

[00:01:27.390] – Maria

Yeah, I mean, it’s funny. Like, every year we try to make these prognostications, and the year never turns out the way we think it’s going to. So, caveat listener, what do I think is going to happen? I think one of the things that’s going to happen this year is I think that schools are going to increasingly start relying more on video. Any listeners of the podcast hi, mom. Know that I’m a huge fan of the use of video in admissions. I think it saves a lot of angst. It saves a lot of time. I think it reduces the sometimes people will spend literally six months, they’ll have 57 drafts of an essay, and you think I’m exaggerating, but in some cases, it’s not an exaggeration. They will have, like, dozens of drafts of an essay, and they will spend months, or they might just hire someone else to do it. And so I just think that video provides an infinitely more authentic experience. I think it’s faster to prepare. I think it’s nicer than for the candidate. Whether it goes well or it goes poorly, it’s over within a few minutes. As opposed to the eight month agony.

[00:02:25.550] – John

Yeah. It’s also, for admission officials, easier to assess, right?

[00:02:29.570] – Maria

I believe so. Right. Because when you’re reading someone’s written essay, you are trying to get a sense of their quote unquote voice. And isn’t it so much better just to get their literal voice? So I think that it’s just easier for people all around. It’s harder to game it. It’s harder to cheat. And I also think it helps you uncover some diamonds in the rough who might have amazing executive presence or really great stories, but who just might not come across well on paper. On the hard, cold black and white of the type set on the screen.

[00:03:01.770] – John

There’s also the impact, potential impact, the future of artificial intelligence. We ran a piece by an Oxford professor recently who suggested that essays probably could be written by AI and actually be better than ones that are written by current applicants to business schools. I don’t know how close that is to being real, but certainly that’s out there and that will fuel the likelihood of more schools turning to video essays and video questions to get around this whole notion of someone else doing the work that you’re supposed to do when you apply to business school. Caroline, what’s on your list?

[00:03:47.930] – Caroline

Yes, I do think that AI is beginning to have an impact on admissions and that will only increase over the future years. Although we’re not quite there yet. One of my colleagues, Heidi Hillis, was very curious about Chat GPT and whether it is something that candidates could use to gain the process and generate something better than they could send themselves. So she gave it a task and she got it to write she gets some information and gave it a task to write one of the Stanford GSB and it regurgitated some absolute rubbish. And she’s now using that as an example that she sends around her clients. Like, this is not, this is what you should not write. I do not want to receive a draft like this. So it’s not there yet, but I think it will get there eventually. Right. And there’s a lot of debate at colleges and universities right now not just about the impact on admissions, but the impact on the educational process.

[00:04:43.420] – Maria

Right.

[00:04:43.690] – Caroline

So can professors assign will professors be able to assign writing homework to students and grade them on that if there’s a risk that they are using sophisticated apps in the background to help them turn that work out? So I think it will change admissions and the whole educational experience over the next few years. But I’m not sure that we’ll see any dramatic changes in the next twelve months. But I definitely think that will happen in the next sort of five to ten years. I think for 2023 we will see an uptick in applications compared to twelve months ago. We’ve talked about how the business school market is very cyclical. We saw a surge in applications with a pandemic. Since then we’ve seen a decline. And now since I would say around November 2022, we’re seeing that decline reverse and an uptick in application volume. So I think that schools have been struggling over the past few months and are not thrilled with the application volume that they’ve received in round one, but I think that they will see stronger volume for round two and stronger interest for the MBA programs through 2023. And there was another announcement yesterday, big layoffs from Amazon.

[00:06:04.450] – Caroline

Yeah, pretty dramatic. So we know that those redundancies do spur people to apply to business school. And so I think that that will fuel an increase in heading back to graduate school this year. And then something else that I think that we will see over the next year and perhaps in the longer term is test optional becoming a permanent thing rather than just something that was pandemic related. And partly I think that’s driven by the undergraduate market where more and more schools, actually more schools now are test optional than they were during the pandemic season of admissions, right? So that is here to stay in the undergraduate market. And I think that that will have a trickle on effect into the graduate school market where you’ll have a whole generation of candidates coming through who have never taken a standardized test and therefore will be less inclined to take a GMAT or a GRE. And in a context where, as we’ve discussed, the full time MBA market in the US. Is not growing in any case, right, because people have more options with online MBAs and different Masters programs, et cetera, it will get harder and harder for schools to require those tests.

[00:07:21.490] – Caroline

So I think that more schools in the longer term will become test optionals. Regards the GMAT or the GRE.

[00:07:29.110] – John

Yeah, that’s really interesting and I wonder what that bodes for organizations like GMAC and ETS which administers the GRE exam, which is quite popular as well. So I’m thinking that in the same way that business analytics has become incredibly hot in the last, oh, I’d say ten years, but in the last five in particular, I am thinking that sustainability is going to be really way up there and influence many courses and MBA curricula in the next coming year. I mean, we are right now in the midst of a massive storm in California. They use terms what cyclone, bomb, cyclone, bomb, cyclones and all this kind of thing, which we had never heard before. Of course, over the Christmas holidays, there was a massive storm as well that wrecked havoc with Southwest Airlines, literally shut the airline down for days and disturbed all kinds of airline schedules. There is no shortage of climate change events that are continually reminding us that this has become a major issue, a major priority. And I think business schools are very eager to address this because students are very interested in it. And you see more students who want to, in fact, launch startups that are in one way or another taking advantage or trying to solve some of the climate change issues out there.

[00:09:13.810] – John

And Berkeley, Haas, Copenhagen have been leaders in this, but you have a lot of other players. Columbia Business School is trying to re engineer its curriculum and become a major player in sustainability. American University in Washington DC. Just revamped their masters in sustainability and is making that a cornerstone of the school strategy moving forward. I just think this is going to be as big as the bomb cyclone that’s hitting California right now over the next year or two. So that’s my prediction there also, I think, and this is really interesting, and Caroline brought this up in our pre podcast conversation reminding us about the boycott by many of the top law schools of US news’s ranking. And while that hasn’t filtered into the business school world yet, what’s interesting about that boycott is more schools have joined Harvard and Yale, which were the first two to say we’re not going to play this game anymore. And now us. News is reporting that it will change its ranking systems to bow to that pressure, and we’ll change it in a way, frankly, that makes sense. We’ll no longer penalize schools if their graduates go into public service jobs that pay lower wages.

[00:10:44.190] – John

They will award graduates who go on to pursue advanced degrees of school funded fellowships. They will also no longer consider indicators of student debt or the school spending per student. And they intend to diminish the reliance on surveys of school’s reputations based on academics, lawyers and judges. I imagine that after this success by the law school boycott, we’re going to see some changes in the business school methodology as well, because business school deans have been lobbying US. News for decades, trying to get US. News to change some of the criteria. Those surveys, those reputation surveys are really ridiculous because they ask deans and senior faculty to essentially rate hundreds of schools that they have no knowledge at all about. And let’s face it, most deans and academics don’t even know what’s going on in their own schools, never mind other schools, to be able to rate them. So I would imagine that us. News is going to be under renewed pressure from the business school community to alter some of its metrics as well, or in fact face some sort of boycott on that level. If you had to think about what changes you would like to see in the US.

[00:12:11.020] – John

News ranking, what would they be? Maria, I know you’re a big fan of rankings, so that’s why I called on you first.

[00:12:17.880] – Maria

I love them. That’s why I wish I could marry the rankings and take little rankings. Human hybrid. No, I think that a lot of the rankings are really I mean, we have talked ad nauseam bashing them. Rankings bashing is one of our favorite topics here at Business Casual. Just some of the odd. I think any metric that can be easily or cynically manipulated is one that I feel is probably not that great. And also, as you mentioned a second ago, like the peer evaluation score. What does that even mean? These are business school professors. What’s to say that they’re not playing some sort of cute game theory type of idea where they’re saying, well, even though I secretly think this other school is number one, if I vote for a lower school is number one, then the number one school will get fewer things, and then my school is going to go up, right? I mean, these are smart people. I wouldn’t put it past them to not actually accurately say, here’s the school I actually think is the best school, as opposed to playing some sort of a game similar to the I don’t think US.

[00:13:23.650] – Maria

News really deals with alumni surveys, but the school the rankings that do deal with alumni surveys. Like, obviously you just tell all your lumps. It’s really important that all of you say 100%. So it’s it’s anything like that, that can be gamed I think is is not great. I also think that any emphasis on GPA is a silly metric because GPA, it’s so easy. If I had wanted to get a four point zillion GPA out of four, I could have gone to an easier school. I could have majored in something easier. So GPA itself doesn’t really tell a story at all. Someone with a 3.0 in neuroscience engineering from Caltech is probably more of an academic has more academic horsepower than someone who might have a much, much higher GPA from a different school in a different field of study. So I think GPA should just be eliminated completely, frankly, as a metric.

[00:14:18.780] – John

And test optional policies are going to make the average gmatter gr school a score at a school, which is both are weighted by US. News more problematic as well, because you can basically decide what you want to report if it’s test optional, right? The only people who are going to submit a GMAT or GRE are going to be the highest possible scores, and if not, you’re just not going to even submit it and it won’t be counted.

[00:14:50.660] – Maria

And there might even be, honestly, like a wink wink. Let’s do a precanidacy assessment of you where if you do, like, sort of a little some schools do this more so in Europe, I think, like, oh, send us your resume and we’ll tell you if we think you’re getting in. Why not say, like, well, what’s your GMAT score? And if it’s really low, you just say, look, just do the test optional thing so we don’t have to report it. Those average scores are going to shoot up because to your point, people are just going to cherry pick the candidates and then maybe someone applies with a low score, they go back to them and say, hey, could you just resubmit your application, but this time just don’t submit a score at all. Yeah, thanks. Cool. All of a sudden, every school has a 780 average array.

[00:15:32.490] – Caroline

Glorious future that you’re painting there, Maria.

[00:15:38.090] – Maria

I’m a sunshine optimist. What can I do?

[00:15:42.910] – John

So I mentioned earlier in the introduction that of course Harvard and Stanford will be having new MBA admission directors, and I wonder from both of your viewpoints, what you would like to see. We have, in fact predicted in a previous podcast who we think is the most likely candidate to get the job at Harvard. Go back and listen I’m not going to tell you who it is if you want to find that out, but what changes would you like to see the admission directors at Harvard and Stanford make in the way that they assess candidates as well as the application process itself?

[00:16:22.600] – Caroline

Caroline well, I certainly agree with something that Maria mentioned earlier, which is, please don’t have the deadlines right at the beginning of the new year because it crushes everybody’s holiday. Shifting that forward a bit would be great for everybody, I think. I’m not sure it was a great move by Harvard to drop Round Three. I know that typically Round Three was not terribly useful in that you get the best quality candidates often in Round One and Round Two, and then there weren’t many places left in Round Three, but I don’t think it helped them during the pandemic, right. Because they missed out on a lot of people who then applied in the spring to other schools. And it just means that it gives you less flexibility overall and it gives candidates less flexibility. Right. I mean, basically you apply in the fall or you apply in the new year, or you have to wait another year, and it’s a very long term project applying to business school.

[00:17:28.980] – Maria

Right.

[00:17:29.230] – Caroline

So you’ve got a year to apply, then it’s a two year program if you’re applying to one of those schools. So it’s a very long time horizon.

[00:17:41.570] – John

I think Harvard at a competitive disadvantage because peer schools maintained their Round three or latter deadlines, so they got to see late candidates at Harvard never got to see, or people who were waitlisted and then released by peer schools who then had no time to apply in around three at Harvard. And as we know, there’s a lot of randomness in all this. So people who are accepted by Harvard may be rejected by Stanford or vice versa, or Wharton or MIT or Columbia or Kellogg or Chicago. Booth there are candidates out there that Harvard would love to have in a seat in a classroom that they were not even seen in Round Three, as small as that round. Is.

[00:18:31.970] – Caroline

That’S right? So I would suggest that they review their round policy because they’ve made it less flexible, which I think sort of goes against what people are looking for these days.

[00:18:42.870] – John

True. Maria, what’s your take on all this? You would like to see Stanford do video interviews.

[00:18:51.450] – Maria

I mean, it would save a lot of time for everyone. It would save a lot of time for the applicants. It would save a lot of time for the reviewers. The other thing I would really beg, first of all, all the top schools again, Carol, this thing of, like, it has to be the day after New Year’s. That all the deadlines we are recording this day on January 5. In the past 24 hours, there have been, I believe, 14 major deadlines.

[00:19:16.590] – John

That’s crazy.

[00:19:17.220] – Maria

Come on, you can’t just wait a week, you guys, I understand. Oh, we have a lot of operational things we need to manage and we have to chop chop. But come on, guys, just to wait. Literally everyone suffers except for the admissions readers, because they’re done. They already gave their one round decisions and they haven’t started round two. So the admissions reader, the admissions officers themselves are having a wonderful holiday, but everyone else is suffering. The other thing I would ask specifically of Harvard and Stanford is guys and everyone else, actually, just please, can you just line up on the letters of recommendation, please? I mean, the word count limit for Harvard is like 300, 250 words, and for Stanford, it’s like a thousand words. And so then, of course, applicants start freaking out because it’s really hard to ask your recommender to do two completely separate letters. It’s not fair of the recommender. Frankly, the recommender is already doing you and the schools enough of a favor and so for the poor applicant to be stressed out of like, okay, well, if I submit the thousand word version to Harvard, are they going to reject me?

[00:20:14.710] – Maria

But if I only submit the 300 word version to Stanford, are they going to reject? And there’s so much angst over the stupid letters of recommendation and not what the content is. I mean, that by itself that does merit angst. But there’s the minutiae of the letters of recommendation. And some schools will say, well, they have the little checkboxes, right? Like top 5% in leadership, top 2% in communication, whatever. And some of the schools will have a little box where the recommender can elaborate upon what they put in the check boxes. For some schools, that’s a mandatory explanation box. For other schools, it’s optional. What do I fill it in? Do I not fill it in? But what if it’s redundant with those? It is so annoying. And I am all for making an applicant jump through a million hoops just in the second week of January. Please. I am all for making an applicant jump through a million hoops, but why are you making the recommenders go through this agony just because you feel that your school is special and you want to know, does this candidate support our four pillars of our mission statement?

[00:21:15.180] – Maria

Give me a break. Come on. If you’re really that worried about a candidate not supporting your mission statement or whatever it is, call the person if you really think it’s going to be a problem. But it’s annoying that the recommenders are also giving up their holidays to write these five different versions of the recommendation letter. Come on, schools, you can do better than that. Be better team players schools.

[00:21:41.540] – John

The other thing is, at these highly selected schools, where the vast majority of candidates, many of whom are qualified, get rejected, I think really need to do everything they can to reduce the angst ridden nature of applying to a highly selective business goal. And by that I mean being more transparent about the process, being more communicative with those who apply, being more open and more welcoming than they have tended to be. And this is in particular at Harvard, where I think under De Leopold, there was far greater transparency into who they were accepting and what they were doing than there was under Chad, who shut a lot of stuff down. I mean, my goodness, he wouldn’t even say the number of people who were accepted out of those who applied. He was no longer releasing that simple stat, which every school should be releasing. Shame on Harvard for holding back that stat and then happily giving it to US news for their ranking. I mean, seriously, Harvard really needs to up its game because I think in terms of making it a friendly place to apply to, where people have some visibility into the process that’s better than what has existed in the last few years is the necessity for the new admissions director there and for Stanford.

[00:23:14.410] – John

I don’t know how you two feel about this, but I would like to see Stanford adopt the Harvard method of saying, on this day, we will notify you of our decision. So you don’t have this whole drip, drip campaign that comes out or people guessing when they’re going to get officially notified. Harvard does that. I think that does provide some certainty to the applicant, whether it’s positive or negative for what the outcome will be. But I think that’s helpful for a candidate. Do you two agree?

[00:23:45.670] – Maria

Just if I can just jump in. What’s interesting about that point, John, is I think we would all want there to be a lot more transparency all around, but this is where I think these rankings have created a perverse incentive in the market where if I know that my acceptance rate is going to be one of the major things upon which, even if it’s not part of the ranking. Right. It’s bragging. Right. Our acceptance rate was only 10%. Our acceptance rate was only 2%. Whatever that number is, a school then has an incentive to encourage as many people to apply or reapply as possible. And so because of that metric and its importance, unfortunately, I don’t think we’re ever going to get real transparency because there are people who get rejected one year and you look at their profile and you’re like, you know what, try again in two years. I think you might have a better time. There are people who get rejected and you’re like, just don’t even, it’s over, come up with a plan B. And I think the schools could very easily, when they reject someone, just give a little indication of, like, encourage, strongly encouraged to reapply, not encourage to reapply.

[00:24:49.440] – Maria

And then if they don’t want to say anything beyond that, that’s great, but at least give people some closure. People sometimes apply to, I was contacted by someone who had applied to Stanford six times, and it’s like, okay, the definition of insanity is but because the schools, if the schools don’t want to read essays from people who are just simply not even remotely qualified, they could easily avoid that by being a lot more transparent. But then the application numbers themselves would go down, which would mean less application fees, fewer, and then I think that all important. I do think there’s a significant psychological benefit to that acceptance rate, and until we either eliminate it somehow or come up with an alternative proxy, you’re not going to get that transparency. Because whether it’s a conscious thing that is being done or unconsciously, I do think that there’s an incentive to encourage as many people to apply, even if a lot of those people are just not hopeless.

[00:25:47.790] – John

Yeah, it’s known that Stanford’s high GMAT average for class does deter a number of candidates who would be very qualified to be in the pool and to be considered from applying at all when that’s been a problem for Stanford for a number of years that isn’t going away. But this goes to your point, Maria, of how these stats used by US news primarily to rank schools can sometimes have unintended consequences, let’s put it that way. The other thing I see happening, and we’ve talked a little bit about this in the past, is obviously the priority that schools have made clear for greater diversity and inclusion and how this will play out. Most of the schools now have directors of Dei, and they are looking at this issue from the standpoint, not only of the student population, but of faculty and staff. And I don’t see any reduction in that effort. If anything, I actually see the fruits of these appointments that have occurred in the last few years and more action by schools on diversity and inclusion. Caroline, do you agree?

[00:27:09.290] – Caroline

Yes, I think so. And it’s very much a long term effort. It’s not something that you can dramatically change from one year to the next. It’s the kind of initiative where you really have to invest over the long term and be communicating in a certain way with certain populations to build your pipeline in the long term. And so I’m pleased that the schools are sticking with this and, as you say, that they are not only continuing, but investing more and really being consistent in their efforts, because it’s not something that is easy to change. And it’s very much about that consistent effort over a long term that will really make the difference that we will see in five years, ten years down the line.

[00:27:56.730] – John

Yeah, that’s true to some extent. This is a pipeline issue, and schools need to reach further back into the pipeline to make a difference with more efforts to encourage young academics who are women and minorities to pursue their careers in the world of business. And more attention paid to mentoring those junior faculties so that they can become tenure track and tenured faculty and play more of a leadership role in the future. Same story when you’re thinking about trying to increase the percentage of URM students in US. Business schools. You really need to go down, maybe even to the high school level and start teaching people about the possibilities of a business education and what that all means for people to pursue, and certainly at the undergraduate level or historically black colleges. And there’s an education effort here that makes us no easy fix, and it’s going to take a lot of effort over a lot of years to see real traction on diversity and inclusion. Maria, anything else you see coming about this New Year?

[00:29:16.790] – Maria

No, I think we’ve covered it. If all of these things happen, it will be an exciting year indeed. I kind of don’t want to tempt fate and start throwing out more predictions. I think we’ve got enough on our plates as it is right now.

[00:29:31.340] – John

I think that’s true, and I think it’s an uncertain time. It’s a turbulent time. I don’t see any of that changing. Whether we actually follow into a recession or not almost seems inconsequential because a lot of people out there are feeling uncertain about the future. So business school is a reflection of society, and the people it attracts and what it teaches and how it engages with the world is directly related to what’s happening. In fact, business schools tend to be more market responsive to what’s going on in the greater world than most other departments or colleges in the university. So for all of you out there, I want to wish you a safe, a healthy and prosperous New Year. And if you are a would be applicant, I think all three of us want to encourage you to go for it. Most people who do end up going for an MBA say they wish they had considered it years earlier, and they do not regret their decision. Yes, you’ll look at the price tag, and it may scare you, but realize there’s a lot of scholarship money out there. And also realize that the ROI on the degree is still incredibly strong. Pays back fast, and you will have the experience of a lifetime. This is John Byrne with Poets and Quants. Thanks for listening to Business Casual.