In this episode of Business Casual, the hosts examine the impressive financial benefits for MBA graduates from top U.S. business schools. Recent trends show significant salary hikes, exemplified by a 29.1% increase at Chicago Booth, which consistently surpasses inflation. Despite a drop in MBA applications, the substantial pay rises highlight the persistent value of an MBA in a fluctuating economic landscape.

Caroline points out how MBA career services adeptly adjust to changing recruitment trends, securing superior job offers for graduates. Maria notes that the consistent salary boosts not only mitigate inflation concerns but also solidify the strong investment return of an MBA. This episode effectively showcases the enduring appeal of the MBA as a wise investment for securing financially rewarding careers. Tune in for insights into why an MBA remains a prudent financial decision in today’s economy.

Episode Transcript

[00:00:04.370] – John

Hello, everyone. Welcome to Business Casual, the weekly podcast of Poets and Quants. I’m John Byrne with Poets and Quants, and I have with me my co-host, Maria Wich Vila and Caroline Diarte Edwards. You know them well if you’ve been listening to our podcast over the years. We got a few things to talk about today. I want to just lift the curtain on the new admission season, which is about to start. Only one US school has come up with their MBA application deadlines and their essays. It’s Berkeley Haas. That is a little bit unusual because typically, the first out of the gate is a Harvard business school, and I’m sure we’ll be hearing from Harvard any day soon. But at Berkeley Haas, which in fact, their deadlines came out when their current dean decided to step down, oddly enough. They set a September 12th deadline for round one applicants. If you apply by September 12th, you will hear from them before Christmas on December 12th, three months later. Second round candidates can file a draft by January ninth and get a decision by the 27th of March. Then their third and final round deadline is April third with decisions posted on May eighth.

[00:01:29.680] – John

Harvard, last year was among the first schools to have a deadline, and we’ll find out exactly when they’re going to go soon. But typically, there isn’t a whole lot of difference, usually by one or two days only. Last time, the round one deadline was September sixth, and then the round two deadline was January third for Harvard Business School. You can pretty much expect the dates when they do come out to be within two or three days. Some interesting news, tidbit, gossip, almost, that we’re hearing from some of the schools. NYU Stern, their apps for the full-time MBA program in the past year were up by more than 50%. That’s right, 5-0. NYU Stern has made a fairly significant recovery in the rankings, and one can attribute the increase to those rankings, if not the fact that they are located in a highly desirable city for international candidates in particular. UVA Darden in Charlottesville, Virginia, up 20 %, Yale School of Management, up 20 % as well. So while applications have been declining and we’ve been writing about that, it looks like the uncertainty in the economy, I’m not going to say it’s a bad economy, but the uncertainty itself, apparently, is leading more people to graduate business school, which we think is a good sign, right, Maria?

[00:03:05.790] – Maria

It’s a great sign and a huge sigh of relief, I’m sure, for all of us in this ecosystem. Although I think because don’t applications to business school tend to follow, as you were mentioning, bad things happening in the economy. If this is a canary in the coal mine for the overall economy, maybe we shouldn’t be so happy about it. But no, I think for all of us who are in this space, we’re always excited to see people, prospective students valuing the experience for what it is. So this is great.

[00:03:39.230] – John

Yeah, exactly. Caroline, I’m sure that when you were reviewing applications at INSEAD as Managing Director of Admissions and Financial Aid there, you probably saw this countercyclical trend many times, right?

[00:03:53.340] – Caroline

Yes, absolutely. I spent some time digging back through the historical records as well over decades, and it’s a clear trend, right? MBA applications are always countercyclical. So it does suggest that people are applying. We did see some layoffs last year, right? So some of the tech companies and some jobs in the finance sector were lost last year. So I think that there is a, no doubt, a correlation there. We’re seeing plenty of interest right now for the new season. So just from my small data set at Fortuna, I think that it’s going to be a good year for business schools this coming season as well.

[00:04:36.170] – John

Yeah, that’s great. We love more people looking at graduate business education, and particularly MBA. As you know, we’re all not only ambassadors for the degree, but we think it’s a no-brainer investment for most people. The other thing that I should point out is we looked at how many MBAs are in the C-suites of the Fortune 1,000 companies. Now, I know in today’s world, this may not be the ultimate goal for many MBA graduates. More students and graduates seem to be interested in early stage companies, private companies, startups, maybe even doing their own thing entirely, or even taking a non-traditional route by doing a job in education or health care or elsewhere. But nonetheless, it’s an interesting and informative look at what schools have the most MBAs who are in the C-suite at the Fortune 1000. It will not surprise anyone that nearly eight of every 100 MBAs in the Fortune 1000 C-suite is a graduate of the Harvard Business School. Overall, that means there’s 94 Harvard MBAs, 7.8% is the total a percentage among all the MBAs. Chicago is up there with Northwestern, both at 6.1%, each with 73 graduates who are in the C-suite of the Fortune 1,000.

[00:06:14.520] – John

Wharton is next, which is surprising that Chicago and Kellogg would be ahead of Wharton, but that may be a focus of the finance track that many would take. Obviously, if you’re a partner at an investment firm or an investment management firm, you’re not going to be collected in the Fortune 1,000, which is focused on public corporations. But 4.7% at Wharton, 3.2% at Columbia, Michigan, 2.8%, Stanford, 2.1%, also because so many Stanford grads would prefer to work in early stage and startup companies or do their own thing. I should also mention that obviously the Fortune 1,000 does not include, and these are among the most popular jobs for MBAs, consulting firms which are not public. So McKinsey Bain, BCG, Deloitte, and the rest of them, no. And neither would be venture capital firms or hedge funds, which are also highly desirable and very lucrative positions for MBAs. Caroline, what do you make of this list of the number of MBAs in the C-suite at Fortune 1000 companies?

[00:07:24.620] – Caroline

Well, it’s the usual suspects at the top of the list, and I wouldn’t read too much into the order in which they appear on that list because as you said, it also depends partly on graduate preferences and where they want to work. But I think it’s not surprising that you’ve got the M7 schools very well represented there. And of course, Harvard, given the size of the class, has an advantage in the volume of graduates it’s sending out into the world, especially if you compare to much smaller class at Stanford, for example. But I think it’s great to see also that, as you note in your article, there are about a third of the class, sorry, about a third of the MBA graduates who are at Fortune 1,000 companies are from those very top schools. And so actually two thirds are from other schools, which goes to show that you don’t have to go to one of these hyper competitive schools in order to do well in your career. And it’s really about what you make of your MBA, right? And no MBA MBA program is going to give you an automatic magic bullet for your career to ensure your success.

[00:08:37.620] – Caroline

And there are a lot of great MBA programs that give you a fantastic foundation, and you can leverage that to do extremely well in your career. So I think that’s very reassuring data for many applicants who look at the statistics at the M7 schools and realize that they may have slim chances of getting in. And as your data here shows, you don’t have to go to one of those very top schools to have a glittering career.

[00:09:05.520] – John

True. And now I also should point out, and Caroline is normally the first to point this out, that this is a totally US-centric list. The Fortune 1,000 only tracks US companies. So all the international firms that hire MBAs are not included in this, which is why most of the schools on the list are US schools. And indeed, For me, the big question always is, this is the chicken and egg question about MBAs, right? Is it because they went to the school that they were able to climb the career ladder and get into the C-suite at a Fortune 1,000 company? Or would they have been there no matter where they went? If you look at some of the schools that have MBAs in C-suite jobs, Georgia State, Wisconsin, Pittsburgh, Iowa, Texas A&M, Southern Methodist, Rutgers, Temple University, Santa Clara, Rollins, Penn State, Drexel, DePaul. Maybe the other argument here is that, Hey, if you’re smart and you’re ambitious, maybe it really doesn’t matter which school you got your MBA from. You’re going to ride to the top anyway. Maria, do you subscribe to that?

[00:10:22.500] – Maria

Yeah, absolutely. What I love about things like this is that it really shows, to your point, John, that you can attend a wide variety business schools and have great results. I think there are a number of schools here that really punch above their weight class. It’s interesting that people get so obsessed with the rankings, and anyone who’s a long-time listener of this podcast knows that we are a bit skeptical. We like the rankings, but we’re skeptical of them. We have a healthy skepticism of them. I think that this list is a great example of why some of that skepticism might be warranted. Certainly, there are top schools well represented at the top of this list, but they’re not exactly in the same order as you might normally find them. NYU does very well, Duke does very well, Washington University, Allen does very well. I’m fascinated that the Indian Institute of Management has a great showing, good for them, and then followed by Vanderbilt, Owen. I do think that also another thing to this might be some of the geographic nuances to a lot of this. Perhaps a lot of these Fortune 100 companies, 1,000 companies, sorry, might be manufacturing companies or they might be, for example, health insurance companies.

[00:11:32.800] – Maria

I know that Vanderbilt University has a very strong connection to things like the health insurance industry. Those companies in the US, because health insurance is unfortunately such a vital part of our healthcare system, those companies can get pretty huge. What is interesting about this list is that I think it shows that you don’t necessarily have to go to the tippetop school and that if you are focused in what it is you want to pursue and you’re thoughtful about, okay, let’s say I do want to work in health insurance as an industry, if I do go to a great school like Vanderbilt, perhaps that’s going to lead to a lucrative and satisfying and successful career in some of these other fields that might not be the first things that we think of, like banking or consulting. But there are at least 1,000, if not more, other companies out there, a. K. A. The Fortune 1,000, that can provide really satisfying and successful and lucrative careers for MBA graduates. I love that this list will help, hopefully, applicants cast a wider net in their minds as they look at programs to apply to.

[00:12:38.020] – John

Yeah, that’s a really good takeaway, Maria. I think that that’s absolutely true. Obviously, not everyone can go to a top 10 business school. Very few people can. What matters more is the quality of the education, what you take away, the connections you make, the alumni you meet, and the mentoring you get. That can matter a lot. Which leads me to one of my favorite stories of the year. This is something that we’ve done for quite some time. It’s identifying who we would consider to be the top 40 under 40 professors in the world who teach at business school. Here’s how we do this. We solicit nominations from schools, students, alumni, and faculty and then we actually judge them. We evaluate on the basis of both teaching and research. We give more weight to teaching because I have to tell you, I just have this very fixated view that a great teacher can change your life in every possible way. I’m a beneficiary of teachers who invested in me, and that made the world of difference in me. I believe that a teacher who can inspire and teach at the same time is worth his or her weight in gold.

[00:14:07.090] – John

Now, for this one, we received more than 1,000 nominations from students, colleagues, business schools, and professors. We evaluated them, and we came up with our list of 40. What’s interesting is there were a number of firsts. For one thing, we honor 21 exceptional women, the most we’ve ever recognized in a single year. For another, we have more professors from schools outside the US, 15 more than any other year. The professors on this year’s list come from 34 different business schools, all over the world. The United Kingdom has the most professors outside the US at five, France is up to a three, Spain, two. The list includes professors that are from China, India, Italy, Mexico, and the Netherlands. It really an impressive group. When you look at the people who are teaching MBAs, and just their passion, their dedication, their love for what they’re doing, really comes through in the profiles on each of these incredible professors. I’m sure that in your day, Maria and Caroline, you had professors at Harvard and INSEAD who really made a difference to you, right?

[00:15:30.760] – Caroline

Yeah, absolutely. As you said, it does make a huge difference, right? And it’s a wonderful list that you put together there, John. I was just reading through some of their profiles. Just incredible backgrounds. And I love how diverse their backgrounds are and how international many of their backgrounds are. I think that brings so much to the classroom, that additional perspective, that richness of experience is a great addition. Yeah. And so, as you say, it can make a huge difference who you meet and the interactions that you have. And I’m still in touch with some of my professors. I’m sure that’s the case for many MBA graduates, that they build relationships with particular professors who make a difference and they really connect with. So it’s wonderful to have that as you go forward in your career, to have the opportunity to touch base with people who’ve really got insight into a particular area that is of interest to you, and they care about you, and they can offer you great advice at particular points in your career.

[00:16:33.990] – John

True. To look at the… I just want to give you a little more detail on this. For research, we looked at the volume and the impact of the professor’s scholarly work. We examined Google Citation numbers as well as other major media attention received by the professor about their research work, and also whether or not the faculty member had received research awards or grants that show third-party validation of their work. For teaching, we consider the nominations received both quality and quantity. In some cases, some of these professors get 100 or more nominations, but if there’s little substance to them, we’ll score them less than a professor who would get nominations from people who write in-depth and write thoughtfully about why they’re nominating them. We also consider teaching-related awards that teachers have won. It’s a pretty cool list. Maria, anyone out here on the list sticks out to you?

[00:17:40.160] – Maria

Yeah, I was really impressed by Karine Lau. I hope I’m pronouncing that correctly. At the Wharton School. Her background is really fascinating. She teaches a class called the Economics of Diversity and Discrimination, which became such an in demand and popular class that Wharton actually created a major diversity, equity, and inclusion. She’s not simply a thought leader in her specific field, but that thought leadership was so impactful that it actually impacted the curriculum of one of the world’s top business schools. It really is a testament to how a dedicated, thoughtful, and enthusiastic professor cannot just change their students’ lives, but even change the institutions at which they teach. That she, in particular, really stood out to me as super impressive.

[00:18:29.460] – John

Yeah. I mean, it’s just the stories in here are really inspiring. One woman, Frederica Di Stefano, she’s 36. She’s an assistant professor of management and human resources at HEC Paris. She was diagnosed with cancer for the first time in her early ’20s, one week after graduating with her master’s in science. As a research assistant at Bocconi University in Italy, she started reading research on work, careers, and human resources. That’s when she she wanted to be a business school professor. Obviously, she is a cancer survivor. This is a person who’s really grateful to her mentors and co-authors who, in her own words, have been kind, patient, and not giving up on me. It’s the people you can expect to meet in a business school who will really change your life. All right. You have the new admission season starting. Berkeley’s first out of the gate. There are a bunch of European schools that also have deadlines. Columbia said it’s January cohort deadline as well. That’s in our story, the application deadlines for the 2024, 2025 admission season. You have the MBAs who are in the C-suite at the Fortune 1000. And you have our latest 40 Under 40 Best MBA Professors of 2024.

[00:19:58.100] – John

Check them all out at Poets and Quants. Meantime, thanks for listening.