On Campus: No Summer Slowdown

Virginia-Darden Dean Bruner

Just weeks ago, members of the MBA Class of 2011 dispersed all over the country--first to take well-deserved breaks and vacations, second to prepare to move to big cities or other outposts to start new positions. Business schools get a short respite, a chance to pause after a bustling school year.

Afterward summer activity picks up again at most schools.  Many have summer semesters and course offerings. Most are gearing up to welcome the parade of bright, confident faces who will make up the Class of 2013. (Some have representatives who have just returned from the Consortium's Orientation Program in Minneapolis.) At some schools, orientation starts in a few days. At most, deans will inevitably proclaim the Class of 2013 as its best, most ambitious, most talented, most diverse and most interesting.

The pulse of business discussion, academic research, and the continual revamping of b-school curriculum is as vigorous as ever. Business schools, including the Consortium 17, don't lose a beat in their efforts to remain as relevant as ever.

In recent days, Virginia-Darden's Dean Rob Bruner shared his views of the tension and stalemate that has engulfed Washington. The debt-ceiling fracas, he says, will make a fascinating case study on business negotiation. The typical business setting is about negotiations, especially in finance, where deals are proposed, discussed and struck, and where prices, fees, terms and conditions are debated. Dean Bruner says, "To aficionados of bargaining, watching (the Democrats and Republicans in Congress go head to head throughout July) is high entertainment"--even if it's not amusing to the rest of the country.

In his blog (See www.darden.virginia.edu/deansblog) , he highlights primary discussions between two principals, but also the "hidden discussions" among the principals within their circles--the discussions that take place out of view. Tactically, negotiators should investigate those "hidden discussions."

He writes about "brinksmanship," the timeline point where neither side moves toward compromise and a deadline is looming.  He doesn't project how the Congressional stalemate will turn out, but he challenges professors to use the current imbroglio as a teaching point in classes in negotiation and policy. And perhaps even ethics.

Business schools still favor the case method of study for some courses.  With new technology (iPads, tablets, notebooks and laptops), do professors still hand out or require students to purchase the volumes of paper cases for students to review, analyze and discuss in class? Yes, many do. New technology is spurring schools to go the electronic route, especially schools that have thousands of cases on file.  NYU-Stern has tried to migrate to the iPad and other tablets, while Virginia-Darden is experimenting with the Kindle. 

The transition is not as easy as planned, even for b-school students who don't know a world without personal computers and cell phones.  Some students say using iPads, Kindles or other tablets for case study in class makes it difficult to keep up, turn pages, or make notes. Improvements will come inevitably.

At Indiana-Kelley, Consortium alumna Joy Somerset was featured this spring on its school site as an example of a graduate who achieved several objectives in finding the right job. (See http://www.kelley.idu.ed/.) While a Consortium student at Kelley, Somerset approached career coaches to help her decide what she would do after getting the MBA. A coach reaffirmed her interests in brand management, but observed she wanted to do something "altruistic," or "bring joy to others."

The advice and coaching helped lead her to an internship and eventual full-time offer at Consortium sponsor Eli Lily in brand management in a special role where she works with doctors and cancer patients.

North Carolina-Kenan this month launched its new MBA-online program, called MBA@UNC. Some approached this with apprehension, thinking it might not have the rigor, prestige and attraction of its full-time program. Will it offer the same credential, some asked?

The program, as it has rolled out, will prove to be anything but MBA-lite.  In its new class, many of the 19 new students have doctorates and law degrees. They will meet for class and have case-group discussions online. Students will be converge on campus at least twice for "immersion weekends." 

Many wonder how students will engage in partnerships in projects, in exchanges of ideas, or teamwork activities online. Students, however, will not be anonymous during classes and case groups.  At all times, when they log on, their faces will be on the screen, and they will be expected to participate and contribute in the same way in a classroom. Professors and case-group leaders will know who is not in class or who is not attentive or adding to the discussion.

UCLA-Anderson admissions director Rob Weiler told Businessweek (http://www.businessweek.com/) this summer that once again Anderson's full-time MBA program is gearing up for one of its best classes ever, a class that includes Consortium students. "Anderson students are confident, but not arrogant or cocky," he said."  "They tend to play well with others. They tend to be people who dive in." They don't sit on sidelines.

From about 2,500 applications, Anderson will welcome a class of 360, including about 30% minorities and 30% with an expressed interest in finance.

While full-time students are away, Yale's School of Management Shiller participated in the program.

Michigan-Ross welcomed its new dean, Alison Davis-Blake, who started her new job July 1.  She spent 15 years of her career at Consortium school Texas-McCombs and says her objective at Michigan will be to focus on entrepreneurship, innovation and globalization.

Meanwhile, with market volatility, debt struggles among sovereigns, and a financial system still trying to right itself three years after the demise of Lehman, there is much to research and discuss on campus. B-schools have been involved in that and much more, including such topics as the phenomenon that is Groupon, the fragility of the Murdoch media empire, and the anticipation of what could possibly be the next "black swan" event.

Tracy Williams

Business Schools: "Satisfied" Alumni

Dartmouth's Tuck leads top business schools in alumni-participation in donations

Who are the most satisfied alumni among top business schools?  "Satisfied," for these purposes, isn't defined by the alumni happiest in their careers, the most content in their outlook,  or the most optimistic about business opportunities. Satisfied," in this case, applies to alumni who are happiest about their business-school experiences. 

They are the ones who most appreciated the two years of toil to get the MBA and reflect fondly on time spent with professors, deans, classmates and career advisers. They might recall cheerfully the class "field trip" to China, the end-of-year skit performed before a standing-room crowd, or the thought-provoking cases in project finance. They will have appreciated the school's brand-new, state-of-art facility--featuring technology marvels and electronic wizardry.

Sometimes satisfaction in career correlates closely to satisfaction at business school, because alumni reason that the b-school experience helped prepare them well for a thriving career. Other times, unhappy alumni may not appreciate a long-ago experience until years after they graduate.

They will complain about a tortuous experience in an advanced accounting course while in school, but will appreciate the principles they learned while doing a deal years later. They will gripe that a school is too far from the finance centers of New York and Chicago, but will appreciate decades later the contacts they made and the friendships and networks they cultivated. They may not understand why they must take a required course in policy or decision-making until they are sitting in decision-making roles later on.

Business schools, their stakeholders, and those who try to rate, rank and evaluate business schools struggle to define ways to measure "alumni satisfaction."

One way they do it is not necessarily the best or fairest way. But they measure it anyway. They measure satisfaction by tallying up the numbers of alumni who contribute consistently to their respective schools.  They presume alumni happy with their experiences on campus will happily write checks once or twice a year. The amounts will vary, depending on what alumni are doing and where they are in their career stages.

Along this premise, CNN and Money magazine tried to determine which top schools have the "most satisfied" alumni based on percentage of alumni who give back (http://www.management.fortune.cnn.com/). Consortium school Dartmouth (Tuck) was a run-away leader with 67% of nearly 9,000 living alumni who made donations in a recent year.  Analysts attribute that to "satisfaction" with their experiences in Hanover, to appreciation of how Tuck prepared them for careers, and to Tuck's vast, tight global network of alumni.

Consortium schools Yale and Virginia (Darden) followed in second and third place, with 46% and 43% participation rates, respectively.

As with any list, readers should approach statistics-based rankings with care.  Some observers or deans say alumni giving is influenced by many factors. Some schools, for example, encourage alumni to write their big checks during reunion years (once every five years), so year-to-year participation rates can be misleading.  Other schools encourage alumni to contribute something--any amount in any way--every year to get into the habit of giving. 

Some, according to CNN, say public business schools lag because alumni may presume as neighboring tax-payers they are already supporting schools.  Other schools encourage giving, but are just as happy if alumni donate time, volunteer in service, or partipate in mentor programs, interview prospects, or recruit.

Satisfying and memorable experiences surely influence alumni giving. But economic conditions, personal situations, time constraints and the schools' own alumni infrastructure can be significant factors, too.  The development offices at some schools are more efficient and successful than at others.  National alumni networks are better organized at some schools. 

Then there could be the UC-Berkeley MBA graduate, who appreciates the courses and professors in entrepreneurship that helped her launch a start-up in nearby Silicon Valley. She has intentions to give back, but in her company's early stages does not have the resources or time to be "reflective" or "appreciative" of experiences at Haas. Or she simply promises herself to write the big check when her personal net worth soars.

In general, Consortium schools fared well on CNN's list.  Cornell (Johnson), 23% participation, was seventh; Consortium schools UCLA, Carnegie Mellon and USC were 11th, 12th and 13th , respectively with participation rates between 19-20%.  UC-Berkeley, Emory, UNC, Michigan, Indiana, NYU, and Texas were also included in the list. 

Consortium schools Wisconsin, Washington Univ., and  Rochester were not included on the list--likely because they were unintentionally omitted from the survey or CNN may not have had sufficient information.

For all schools, the median gift is about $150--suggesting that many alumni, no matter their age or experience or net worth, will make a nominal donation yearly because they are sufficiently satisfied and because they are respectful of the schools' solicitation efforts (the e-mails, the letters, and the phone calls).

What about giving rates among Consortium graduates? Do Consortium graduates give back to their schools? Do they also give back to the Consortium?  Compiling these statistics is more complex than it appears. Consortium graduates give back to their schools, probably in comparable percentages as the rest of their classmates. Many Consortium graduates give back to the Consortium, too. Some make donations to both; some request and hope contributions to the Consortium are also counted as contributions to their schools, and vice-versa. 

Some even dream of making a philanthropist-like contribution, too, once personal net worth soars "after the IPO" or after "the new business takes off."

In 2010, the Consortium reported a 13% increase in the amount of donations from over 1,200 individual donors (including alumni)--an increase that is due in part to improved economics, but also to the Consortium's own well-planned efforts to reach out to alumni and others.

The statistics may not capture one popular Consortium sentiment: Most, if not all, Consortium alumni, whether they contribute regularly or not, will say they are "satisfied" with the opportunity the Consortium experience afforded.

Tracy Williams



Affinity Groups: To Join or Not to Join

To join or not to join. To get involved or not.  The New York Times Sunday posed the query to Consortium CEO Peter Aranda in its July 3 edition:  Should members of under-represented groups join the "affinity groups" that exist in certain business settings?  They are special-purpose groups within a company that attract a membership of women, Hispanics, or Asian- or African-Americans. Or they may be groups that attract others with shared interests or backgrounds:  LGBTs, Native Americans,  Arab-Americans, or South Asians.

They may include--within the institution--groups of African-American investment bankers, an Asian society of traders, researchers and analysts, or women in risk management. They could include Latinos in private banking or financial consulting.

The Times posed a challenging question, one that many within these groups grapple with from time to time. Is there an advantage or disadvantage if you choose to affiliate with affinity groups while you are ambitiously trying to advance within the company? Is there a negative stigma in the eyes of those who appraise and promote you? (See http://www.nytimes.com/2011/07/03/jobs

Aranda suggested affinity-group involvement is beneficial if the primary purpose is not social. "Affinity groups can operate like focus groups," he told the Times.  The affinity group should have a purpose consistent with the business objectives of the company. Aranda suggested you should join  groups that have senior-executive sponsors and that are directly tied to business functions like recruiting, marketing, or product development.

Or you should join if the group has a mentor program.  "From a minority perspective, you should have mentors, so if you are a Hispanic junior executive and you hope to rise through the ranks, you can talk to someone who has been down that path ahead of you," Aranda said. "What you need to be careful about with affinity groups is that you aren't creating segregation by being exclusive."

Many major financial institutions, such as Citi, JPMorgan Chase, and BofA endorse the formation of affinity groups and support them in many ways.  Most such groups were formed to help in professional recruiting and evolved into networks that assist in retention and career development. They work with recruiting units to top identify candidates and escort prospects through the recruiting process. 

It's not unusual, however, for a woman, African-American or Asian-American to assess whether being associated with such groups slow down progress to get promoted or win an opportunity to transfer overseas. In financial services, performance, commitment and productivity count during appraisals. But impressions do, too, whether or not they are conveyed fairly. So inevitably, women and minorities ask themselves about the possible stigma of being associated with groups that might be regarded by outsiders as separate or exclusive.

Often, however, affinity groups offer broad advantages and institutional assistance. Big banks, firms and institutions in recent years have not shunned their formation and have not frowned on them.

How then can affinity groups be formed "without guilt" and with pride and enthusiasm, while conforming to overall business objectives?

1.  Affinity groups can assist in recruiting. They can participate by visiting campuses and identifying candidates. They can help institutions formulate firm-wide recruiting strategy, establish relationships with diversity pipelines (such as the Consortium, of course), improve relationships with professors and career advisers at colleges and business schools, and assist recruiters as they comb through long lists of candidates.

Members of affinity groups are usually committed, experienced business professionals. They will know better than corporate recruiters the special talents and strengths necessary to excel on the job. They will be able to pinpoint outstanding women and minority candidates more quickly. They will, also, be more familiar with the sources, pipelines and places to find that talent. They will know HBCUs, understand the value of such groups as National Black MBA Association, the Consortium, or Toigo, or have ties to social and professional organizations within these communities.


2.  Affinity groups can assist in the institution's efforts to hire experienced or lateral talent.  How often have we heard banks, funds or companies say they want desperately to hire experienced vice presidents from under-represented groups, but "can't find them"?  Affinity groups usually know who they are, where they can be found, and whether they might be interested in a lateral move.


3.  Affinity groups can assist in the development of entry-level professionals, including recent MBA graduates.  And they can do this in formal or informal ways.  Most large institutions have structured professional tracks (for analysts, associates, etc.) and care about the development of all who join. Often, however, some junior professionals get more attention and support than others. Others are deserving of support and encouragement, but get lost among the throngs of new people. 

Affinity groups, therefore, can step in to ensure that everybody is advised, guided and encouraged to progress. They can do this via mentor programs, special seminars or career-development sessions. Or they can encourage senior managers, bankers and traders (including those who are part of the affinity groups) to reach out to junior professionals.

4.  In finance, topics, markets, and business can be complex and always changing. The learning curve is always upward. Keeping up can be difficult. Affinity groups can (and should do more to) be a source for members to reach out to each other for information, knowledge and understanding.  The affinity group may act as a "clearinghouse" for questions about products, markets, clients, and technical analysis.


For example, a junior banker may need a refresher on equity derivatives or foreign currencies.  The affinity group can match the banker with another member who is an expert on the topic and will gladly take the time to explain the product.  A recent MBA graduate may want more information about tax-related accounting, financial models, or corporate valuations.  The affinity group can find a member expert who will gladly help.

Once formed, how can affinity groups be effective and self-sustaining? How can they exist long beyond the initial enthusiasm of the early days of formation?

1.  As mentioned above, they should have business-related purposes and specific objectives aligned with the business objectives of the institution, the sector, or business unit. If so, the group will likely provide ongoing institutional support.

As Aranda said, affinity groups should have senior-management presence or senior sponsors.  A senior manager should agree to be more than an in-name-only sponsor and should agree to be involved and act as a champion for the group in business-unit meetings, corporate strategy sessions or even board meetings.

2.  To ensure it transcends being a social outfit, the group should define objectives and strategies clearly, should share them with the broad corporate population, and should meet routinely.  The group should show that it is serious about its intentions and it plans to be around.

3.  The group should reach out early to new professionals, solicit their ideas, absorb their energy and accept them as equals in the group.

What then makes affinity groups vulnerable and ineffective or perceived negatively?

1.  Petty issues and politics suffocate affinity groups.  Sometimes they get bogged down in non-essential issues or caught up in broad corporate politics. The groups sometimes risk spending too much time on the wrong issues. Members lose interest, when they think the time is better spent going back to the office to tackle the in-box.

Affinity groups should, therefore, be attentive to and conscious of how members use their time.  Most members must weigh the time involved vs. the time involved in daily job responsibility. But most are willing to take the time, because they see the long-term benefits. Affinity groups must strive to avoid unnecessary work or projects.


2.  Sometimes they smother themselves with power struggles within the groups. Sometimes members become more impressed by their being heads of their organization than by the mission at hand.  Members risk wasting time figuring out what the titles or name of the group should be or who will represent the group in its meeting with the CEO.

3.  Vague and inconsistent communication sometimes hampers such groups. A group's steering committee might fail to inform all members about what the objectives, programs, strategies and updates are.  Members then feel isolated or disillusioned and become less interested to support the overall cause.

Affinity groups are effective when they are inclusive and are fierce in their efforts to keep everybody informed.

4.  Sometimes affinity groups trip when their objectives are vague, confusing or cumbersome because of corporate-speak.  Some outsiders are already not sure why they have been formed or why they exist; hence, members shouldn't be confused about the real purpose.

The objectives should be crisp, simple, straightforward.

5.  Affinity groups shouldn't be exclusive. They shouldn't try to define membership qualifications and should, in fact, encourage those of different ethnic backgrounds or sex to join and participate. Sometimes groups have stumbled over themselves trying to stipulate who can join or not or who can become leaders or not.

To join or not to join?

If the objective is proper, if the ultimate aim is consistent with institutional mission, if the passion is there, and if the time involved is productive, then why not? There will be long-term benefits for members--and for the institution.

Tracy Williams

Finance Rumblings: Here We Go Again?

Just when we thought all had turned around and we sensed the corner had been turned, we hear banter about financial institutions pondering lay-offs and staff reductions. Haven't we heard these rumblings before?

As big banks and other financial institutions stumble toward the end of the second quarter, 2011, published reports say lay-offs are looming. Senior managers have begun to panic over whether they will be able to generate returns that will match those of 2010, especially with deal flow, trading activity, and the economy sputtering.  Historically, the first response of financial institutions (from trading desks and deal teams to operations groups and compliance functions) is to reduce personnel numbers to brace for rougher waters.  And always, the method that comes to mind to reduce is "LIFO" outplacement--the last in are the first out. Critics say the first reaction is to protect compensation among the elders when the industry must weather a brief storm.

This time around, some financial institutions say they will manage a hint of a slow-down in intelligent, efficient ways.  Banks, funds, dealers and other financial institutions in the past often reduced staff too quickly. Once markets signaled a decline, institutions marshaled out the door the young, ambitious talent it had just hired with effusive enthusiasm.  When markets turned bright months later, firms with swiveled heads rushed to replace the talent it just let flee.

Financial institutions promise they will manage staff numbers better the next time. So at midyear, 2011, when banks and firms sense turbulence heading into the second half (not a crash, not a collapse, not a double-dip recession, but a pause or a correction of some kind), they must restrain themselves to avoid rampant lay-offs in areas where they will be desperate for analysts, team leaders, MBAs and finance experts once markets and activity surge again.

Still, the professionals in these roles must be prepared--from managing director, senior vice president to analyst intern. In fact, this could be an opportune time for self-assessment, the time to ask introspective questions about what's next or the time to make sure you are in sturdy spot if there is commotion around and about:

1.  Are you in a group, unit or business area that could be vulnerable?

2.  How would you expect business-unit leaders to respond, behave or react if there is a prolonged slow-down in the business? How have they reacted or behaved in the past?

3.  Do you understand the positioning, the strategy or the vulnerabilities of your group or area?  Are you aware of the profits and losses (or expense burdens) of your group?

4.  Have you performed as best as possible, given the circumstances? Have you done something recently (managed a project, done a deal, generated new business, or developed staff) that can separate you from the rest?

5.  Are there other opportunities worth exploring? Could this be the right time to move to a new area, new role or a position with greater responsibility and visibility?

Often finance professionals, from those at entry-level to those in privileged perches at the top, will say they are too mired in current problems, deadlines, and group turmoil to address career-related questions.  "We are just trying to survive," everybody says. 

Pausing and assessing what's going, nevertheless, might be worth the time and attention--even if you are exhausted from trying to develop new business in shaky markets, taking on extra projects to prove you can still contribute, or existing in an environment of uncertainty and worry.

Whether they are Consortium MBAs or others with extensive experience, there are many stories of how people thrived when the ground was shaking beneath them, when they took advantage of tenuous circumstances or when they used them to springboard to a better position. This is the time when equity analysts might decide to transition into private banking, when a derivatives expert might consider being a foreign-currency risk-manager, when a top client-relationship executive moves into corporate staff management. Or when a senior manager agrees to take on more responsibility--more groups or more clients reporting into her. Or when the 10-year corporate citizen decides to pursue an opening at a smaller boutique.

It could be the right time, too, to reach out to networks, peers, and colleagues to share ideas, perspectives and concerns.  Not gossip, not hot leads to a new job, but information or insight about what's going on and where the industry is headed. Ideas about next steps and appropriate ways to manage uncertainty. What better time, say, than for Consortium MBAs in finance to reach out to share thoughts about where markets are headed from here, what the hiring trends are in certain areas of the U.S., what opportunities exist in foreign locations, and what the best ways are to confront uncertainty.

Tracy Williams

Financial Services: How Are Black-Owned Doing?

What are the top black-owned banks, brokers, and asset managers in the U.S.? Has there been progress in financial services for African-Americans who want to start, run, own and manage their own firms?  Is the outlook better today than it was in the 1980s--or even a few years ago?

For the young black banker, broker, or trader, are there fair, reasonable opportunities to dream and aspire to starting a new firm?

Black Enterprise magazine just published its annual BE100s lists. The list shows what's possible and what's been done. The magazine every year publishes several lists of the top black-owned businesses in the U.S. for several industry groups.  In financial services, its lists includes the top banks, top asset managers, top investment banks and top private-equity firms.  Those lists suggest how much black firms have penetrated within the industry.

Review and analyze the lists in financial services, and applaud the courage, progress and showing among top black firms. But notice, too, there is still a way to go before many of the top firms find their way onto lists of top 100 or 200 U.S. banks, investment banks or asset managers.

In most cases, the firms are led by experienced leaders, many of whom started their careers at established institutions (like Merrill Lynch, Morgan Stanley, or Goldman Sachs), but decided at some point to take risks and do it on their own. In many cases, they sacrificed big bonuses and industry notoriety for the opportunity to manage and control their own (smaller) operation.

The lists in 2011 include many familiar names and firms.  In recent years, the rankings have hardly changed, yet prove how many were sturdy enough to survive the financial crisis or bounce back from episodes of dwindling business opportunity or market volatility.  If the financial crisis was a momentary blow for Morgan Stanley or Bank of America, surely it must have forced black-owned firms to pare businesses and develop new strategies. Black Enterprises's list shows how some bounced back and even got better.

Among commercial banks. Harlem's Carver Federal Savings, led by long-time CEO Deborah Wright, is the no. 1 bank (with $744 million in assets).  Just like their larger peers, black banks had to wrestle with dwindling capital and credit losses from mortgage portfolios.  Many are now trying to boost their capital bases to keep regulators comfortable.  Citizens Bancshares in Atlanta, led by former JPMorgan Chase banker Jim Young, leads black banks with the most capital with $46 million.

Since the 1970s, blacks have regularly started their own investment banks and broker/dealers. Many started their careers as investment bankers or institutional traders at major investment banks. Once they gained a track record of success, relationships with dozens of clients, and the silent backing of major institutions, they opened their own firms.  Some took advantage of the goals of corporations and municipalities that with open minds opened up opportunities for minorities in finance by including them in syndicate underwritings and new bond and equity offerings.  Blaylock Partners and Utendahl Capital are two of many examples. Jackson Securities, founded in 1987 by former Atlanta mayor Maynard Jackson, attached itself to Jackson's relationships and reputation in the South to become a significant municipal firm in the South.  The firm struggled after Jackson's death in 2003 and is now owned by insurance company Atlanta Life.

Black Enterprise's 2011 list no longer includes Blaylock, Utendahl, Jackson and others, but there are familiar mainstays.  Chicago's Loop Capital and New York's Siebert Brandford Shank rank as the top black investment banks.  Loop Capital is well known for its relationships with leaders of the City of Chicago. That has led to consistent lead roles in Chicago municipal-bond deals.

Siebert Brandford was actually formed from a venture combining Muriel Siebert, the New York-based broker/dealer run by Muriel Siebert, well known in New York circles as a woman pioneer in the securities industry, and Brandford Shank, the black-owned West Coast investment bank.

Williams Capital Group and M.R. Beal are two other familiar black-owned firms in the top 5. They have survived and thrived in the past few years, despite industry turmoil and uncertainty.  Christopher Williams, an MBA graduate of Consortium school Dartmouth, founded his firm in 1994 after stints at Lehman Brothers and Jefferies.  Bernard Beal, a Stanford MBA graduate, founded his firm in 1988 after leaving what was then E.F.Hutton. Over the past two years, Beal has been able sweep up talent from large firms that downsized and import talent (of all colors and background) to help boost his firm.

The top black asset managers, just like the investment banks, include long-time firms, with leaders who first made their marks at major firms.  American Beacon Advisors is the top asset manager (with $44 billion under management).  Tracy Maitland's Advent Capital management ($6 billion) in New York climbed into the top 5 this year.  Maitland, a Columbia graduate, started his career in convertible bonds at Merrill Lynch in the 1980s and at one point worked with Utendahl.

The top 15 includes John Rogers' Ariel Investment (Chicago) and Eugene Profit's Profit Investment ($2 billion) (Maryland).  Rogers, based in Chicago, started his firm in 1983, shortly after he graduated from Princeton, where he also played basketball.  Profit, a Yale football player successful enough to have played in the NFL for the Patriots and Redskins, founded his firm in 1996.

Black Enterprise now also includes the top black-owned private-equity and venture-capital firms. Black firms in this segment are much smaller and have not yet established a long-term record as black investment banks have.  But there is progress.  Some are affiliates or extensions of the established investment banks (Williams Capital, for example, has a private-equity unit.)  Ronald Blaylock, who once led investment bank Blaylock Partners, now leads GenNx360 Capital ($600 million under management), a New York private-equity firm focusing on investments in medium-size companies.  Hartford's Fairview Capital is Black Enterprise's top private-equity firm ($3 billion). 

For black-owned firms, challenges still exist.  In many ways, they are the same challenges that larger, known firms confront:

(a) the need for more capital,
(b) the long wait for a sustained economic recovery,
(c) the hiring and holding onto top talent,
(d) the uncertainty over regulatory reform,
(e) the urgency to find, nurture and keep clients (as borrowers, investors, depositors, or issuers), and

(f) the requirement that operating costs are under control and compliance is in order

Black firms face special challenges, too.  They know they need to establish and maintain credibility, the continual, grinding effort to prove they can provide superior service, advice, trade execution, pricing, or research, compared to larger, peer firms, who are heartless, fierce competitors. In financial services, business is not necessarily handed to them.

They have the monumental task of proving to corporate clients and investors that it makes sense to move business from Jefferies, UBS, Morgan Stanley, Deutsche Bank, or Wells Fargo to their firms.  They must show officials from California or Illinois that they can help the state borrow at a lower rate than that offered by Goldman Sachs.  They must convince the budding trader or broker that career prospects (in the long term) are better at their firms than at JPMorgan Chase.  And they can't ease up.

Somehow they find a way to survive, get the big deals done, make a difference in communities, act as adviser to large corporations and municipalities and hire the right people in crucial roles (trading, risk management, lending, compliance, research, and brokerage). 

Among all black financial-service companies, Chicago's Seaway Bank is the leading employer (200 on staff).  Loop Capital, Carver Federal, Washington's Industrial Bank, and New Orleans' Liberty Bank each has over 120 employees.

Historically, black firms tend to try to go at it alone, unless dire survival is at stake.  Hence, seldom do they seek to grow or increase market share by combining or acquiring a peer firm.  The black banker who worked 10-15 years at Merrill Lynch, founded his own firm and struggled to keep it viable and profitable--while maintaining complete control of the firm and its strategic vision--usually doesn't want to give that up in a merger, even if the combined firm is twice the size.   


While it is discouraging to some that after decades, black firms are still a blip in the financial-services landscape, it's encouraging that many of the firms have been around for a long time.

Tracy Williams

Midyear, 2011: Perspectives, Outlook

Still looking for a sustained uptown?

We are all suffering fatigue waiting for a surging recovery in job markets and the general economy.  Every month or so, the news sours after a few months of hopeful, surging signs.

That--in a nutshell--describes midyear 2011.  A series of upturns and optimism followed by the stench of a momentum-killing downturn. 

MBAs in finance, especially those who embarked on careers the last decade, know these trends, teasing market movements and promising signs well. Many have adjusted to these ups and downs and press on.

As of midyear, 2011, the mood is not dismal. Uncertainty, however, always seems to be hovering overhead.  Many MBAs are finding jobs and meaningful positions in finance.  Job openings and opportunities are more prevalent now than they were in the depressed years of 2008-09.  Yet they may not be first-choice jobs or dream roles. While a select few are winning prize positions at investment banks or private-equity firms, most others are finding suitable spots at smaller institutions, boutiques and industrial companies and are content.

Consortium MBAs have seen growing opportunities in private wealth management.  The big firms, Morgan Stanley, Goldman Sachs, and JPMorgan, continue to hire large numbers of MBAs--right out of school or with a few years of experience in other finance roles. They have convinced MBAs from top schools to explore careers beyond, say, mergers and acquisitions or bond trading.   Big banks have turned asset and wealth management in response to the crisis, regulation and the likelihood that traditional trading and banking businesses will have difficulty achieving expected levels of profitability.

In midyear, 2011, market signs are unclear. One market, nonetheless, seems to have shown renewed life signs--the IPO market.  The evidence is not necessarily from a flood new offerings, but from recent banner-headline equity deals (Groupon's announcement, Linkedin's IPO, anticipation at Twitter and Facebook).  Technology and social networks have rekindled interests in equity offerings, although investors are still reminded of the busted dot-com bubble of the early 2000s.

Months and months after a new guidelines were enacted, financial regulation is still nebulous, arcane, and uncertain.  The rules are changing, but banks, brokers and funds are still stumbling to understand what the rules will be, how they will be enforced, how detrimental they will be to their businesses, and how certain instruments will be traded, processed and cleared (derivatives, most notably).  Financial institutions are going through proper motions, but many are at a stand-still on what the regulatory picture will look like 3-5 years from now.

Meanwhile, in midyear, 2011, insider-trading indictments and court cases are in the news, reminding old-timers of the dramatic insider-trading scandals of the late 1980s and early 1990s and reminding many that history oddly repeats itself more often than we think.

Lehman and Bear Stearns collapsed three years ago. Meanwhile, the barrage of books retelling what happened (at Lehman, at Bear, at Madoff, in mortgage and derivative markets) continues.  In the first half of 2011, new books telling dramatic tales of about Madoff, Goldman Sachs, mortgage-markets, and AIG have been published.  No finance MBA can keep up with cascading reading list, although many are already familiar with the subject matter and issues. Former Merrill and U.S. Treasury official Herb Allison just wrote a short treatise, not recounting the gory past, but proposing tough solutions.

Inside business schools and at many hedge funds, efficient-market theories have been analyzed and in some cases attacked.  Many are analyzing "asymmetries" of markets. Some are calling for an overhaul or review of older concepts; the crisis proved more than ever that markets are flawed.

Top business schools are now welcoming another class.  The MBA and the business-school curriculum and experience are still criticized by pockets of pundits and the public, who blame MBA-trained leaders, managers, traders and deal-doers for market and ethical lapses of recent years.  All business schools sprint to adapt, reform and make the degree as relevant as ever.  The degree is still in demand--among students, who have applied in near-record numbers in recent years, and among financial institutions, who recruit and hire by the hundreds when markets and business grow.

Diversity topics and issues are still on the agenda.  Few signs exist that big banks, financial institutions, and public companies have reduced emphasis, although even fewer signs exist that there is a notable pipeline of under-represented minorities or women who will step up to become CEO of a major financial institution soon. As ever, there is still work to be done, especially after the torment of 2008-09 discouraged much talent to explore opportunities elsewhere.

The recovery at midyear, 2011, has been a series of starts-stops, occasional stumbles, and promising upturns.  As many economists would say, just like most recoveries.

Tracy Williams

CFN's MBA Guide: Surviving First Year

Everybody needs a plan, so they say. Getting into a top business school (and earning membership into the Consortium) is an achievement. But it's a starting point for what's to come. Many Consortium students and other MBAs will acknowledge the starting point leads to an opening of flood gates. 

Business school starts in early September, in most cases. Students are bombarded with tasks, responsibilities, cases, assignments and meetings by the second day.  Many alumni admit later they knew b-school would be a challenge; they just never knew that the workload would be so overwhelming so soon. And there is the worrisome, looming task to get a summer job, even if the summer is nine months away.  Recruiting season, year after year, starts right before school and requires significant amounts of time and attention.

That's where the Consortium Finance Network's annual first-year guide can help.  For the third year in a row, CFN will distribute its guide for first-year MBAs in finance. It offers advice, guidance, and wisdom based on those who've been there before (students) or those who've been on the other side of the hiring process (alumni, recruiters, business leaders). The guide helps first-year students develop a game plan to manage the delicate, careful process of being an outstanding, diligent student, while looking for that meaningful summer internship.

The guide is based on input from alumni and recent students and is culled from commentary from the CFN Linkedin and blog sites. 

Summer is seldom a time to ease up for prospective business students. Many go away for a celebratory vacation or a respite between job and school. But a summer before b-school can also be filled with (Take your pick) pre-matriculation programs, boot camps sponsored by some institutions, orientation programs (including that of the Consortium), and other activities.  Many take advantage of these programs to ensure they get off to a blazing start once school starts and to absorb tidbits and tools that could make a difference later.

The guide offers advice on the summer before school:  How to develop a game plan to make the most of the first year and how to plan to get the internship.

The guide summarizes opportunities in finance, the short- and long-term outlook in primary segments. It tries to assist first-years who wrestle with gnawing career decisions. Should they pursue investment-, corporate- or private-banking? Are there opportunities beyond the popular b-school pursuits (community banking, non-profit activities, operations and technology)? Should they explore their passions, or should they purse opportunities based on their technical strengths or where openings will be when they graduate?

Mentors are crucial in helping students attain desirable positions in finance.  The guide discusses how to make the most of mentor relationships, how to develop long-lasting, rich relationships, or how to approach mentors who have little time or attention span.

CFN's guide addresses student concerns as they proceed during the school year. What should students worry about during the first weeks of school? How can they manage the time between adjusting to the pressing demands of school and planning for internships?  How can they arrange information interviews with alumni and mentors from out of town? Or how can they polish the resume', the elevator pitch, and the first-round interview? How can they prepare now for haunting technical interviews that come in January?

Handling dozens of b-school responsibilities with no spare time is already a chore, but students are also expected to keep up with topics in finance beyond the text and classroom:  the latest deal, the latest finance or economic trend, the latest regulatory proposal, the latest series of finance books that chonicled or analyzed the financial crisis, the latest movement in silver, gold, or oil prices, or the latest expectations about inflation.  The guide provides advice on how to keep up when there are midterms and class presentations to worry about.

Once students have learned how to manage time, take advantage of the wealth of offerings in seminars, activities, and speakers on campus, develop relationships with alumni and mentors, and perform well in coursework, the guide helps students get ready for summer internships.  Successful internships, as MBAs know, lead to full-time job offers in August before the second year.

Diversity, leadership and networking are important topics in schools and in financial institutions.  The guide reviews some of the latest discussion, including sharing lists of the best financial insitutions in diversity and the best in grooming leaders for the future and trends in diversity among senior ranks since the financial crisis.

The CFN guide will be distributed electronically to Consortium students who have indicated an interest in finance. It can be sent to others upon request.

Tracy Williams