Yale SOM Gets a New Look

Yale SOM's Evans Hall opens up in January (NH Register photo)

Yale School of Management, one of the Consortium's 18 schools, is opening up a new campus facility, Evans Hall, in New Haven in mid-Jan., 2014.  The school will launch the new state-of-the-art building with receptions, lectures, presentations and celebrations of what has made Yale SOM special and unique among the panoply of business schools. The week's theme is "Leadership in an Increasingly Complex World."

The new campus will feature the marvels of business-school technology and covers 242,000 square feet, at a cost of $240 million, much of which was made possible by benefactor Edward Evans, who was an undergraduate student at Yale and later CEO of Macmillan, Inc., the publishing house. Besides interview rooms and three libraries, it will even have a student gym and entertainment space.

Yale's dean, Edward Snyder, migrated to Connecticut in 2011 from Chicago's Booth School of Business. In the midst of Chicago's Gothic maze, Booth is a modern, self-contained business school campus, the kind of campus Yale SOM students and faculty might have envied.  Once Snyder arrived in New Haven, he spearheaded the completion of a new campus, a new facility featuring the latest business-school bells and whistles. And his experience in helping to open Chicago's new doors no doubt got many SOM faculty, alumni and students excited about a new campus for Yale.

Building modern facilities is a frequent occurrence at top business schools.  They know that to attract top students, schools must pay attention to their physical being. Facilities, campus and amenities sometimes rank as high as innovative course offerings, curriculum, career placement and notable faculty when students decide whether or not to attend.  While Yale SOM attracted top students over the past decades, many alumni and school leaders felt that an impressive, separate campus was necessary to lure the student that might otherwise be more interested in attending Wharton or Harvard.

Yale and Chicago are certainly not the only schools with new campuses.  Stanford now has its new Knight Management Center, home to its business school since 2011, featuring courtyards, magical classroom technology, chic ambience and sunlit, outdoor cafe settings.  Wharton and Consortium school Michigan have also opened new campus facilities.

Yale SOM has had a colorful history. When it was launched in the mid-1970s, it wanted to be different from other schools. It offered a management-education mixture of the public and private sector.  The degree it certified upon its graduates then was the "MPPM"--a master's in public and private management, arguably a combination of the MPA and MBA degree. Graduates would be steered toward Morgan Stanley, the World Bank or Capitol Hill. At one point, the "O" in "SOM" stood for "Organization."

At times, alumni, recruiters, employers and other constituents interpreted the degree in many ways. And at times, new deans pushed the emphasis one way or the other. Eventually SOM settled on the MBA degree, and it has tweaked the definition of what that means from time to time. In its first three decades, Yale SOM didn't have a separate facility, but existed in a pleasant, neighborly network of "houses" on Yale's Hillhouse Ave.

The new Evans Hall reinforces the notion that Yale SOM has become a top business school in a classical way, although the school, more than many others, tends to walk and run to its own drumbeat by remaining small and enjoying experiments with new ways of instruction or new approaches to the MBA experience. Its integrated curriculum is its latest novel approach.

Yale joined the Consortium in 2008 and has graduated dozens of Consortium MBA's since then. 

Yale being Yale, the school and new facility will seek to fit in well with the rest of the Yale campus.  Evans Hall, with blue hues, courtyards and exquisitely selected artwork, wants to be identifiably Yale, circa 2014.

Tracy Williams

MBA Recruiting: Working the Game Plan

Cornell's Johnson School: Ready, set, network, interview

When recruiting season rolls around, MBA students in finance (including Consortium students in finance around the country) toss the books on the shelves and roll out the details of a game plan to secure a job for the summer or for full-time employment after graduation.

Student sentiments always seem the same year after year.  They never realize how much time, energy, effort, focus, and discipline the process entails.  Often recruiting season is launched right in the middle of midterms and just before first-semester exam season.

MBA students rejoice in the chance to dream of the opportunities presented to them and the chance to drift smoothly into a wonderful job in an ideal industry, making substantial impact, having meaningful experiences, and accumulating their fair share of sums of money.  That's summer-time luxury.  When recruiting season starts, the real world smacks right in the face.  There is time, but the game plan must be in place.

By the time information interviewing, networking, and corporate presentations are in full swing, the MBA finance student needs to have started the process of narrowing choices.  For most, it's not easy. When November approaches, it would be naive for a student to proclaim interests in investment banking, equity research, community banking, and derivatives trading (all of the above) and then be prepared to handle the tough interview process of three or more different finance segments.

Most MBA finance students at top schools know and understand the game.  They are surrounded by peers and career counselors. They discuss timetables, networking events, opportunities and career choices every day, throughout the day, in between classes and at wine receptions in the evening.  Most are open to advice, hints, and help from school advisers, alumni and contacts at major firms and companies.

Most understand and appreciate the value of information interviews and networking.  Students listen and learn and decide on corporate cultures, compensation incentives, work-life balance, and self-fulfillment on the job.

Many, however, under-estimate the importance of keeping up with current markets, deals, transactions and business and economic trends.  Case studies, projects, and exams often get in the way of knowing and understanding what's going on in current markets: recent deals, recent trends, recent regulation, or important discussions of corporate strategy and growth expectations in industry segments.

It becomes almost impossible to juggle preparing for a finance midterm with finding time to learn about Yahoo's latest earnings results, comprehend the interest-rate leanings of the Federal Reserve, or figure out why there were swings and dips in equity options markets.  But corporate interviewers and committee members who make selections tend to weigh heavily around the topics, transactions and activities they are involved with or familiar with.

Opportunities in finance are broad, and the hopelessness, fears and anxiety coming out of the crisis have receded. Finance students today have a buffet of choices.  Still, they must have a game plan ready, a fierce resolve and determination to go through the process, a refined idea of what they want to be and do and an in-depth awareness of what's going on in the financial headlines.

Tracy Williams

See also:
CFN:  First-year MBAs and Recruiting, 2011
CFN:  Gearing Up for Summer Internships, 2012
CFN:  MBA Job Hunting:  No Need to Panic Yet, 2012 

Who's Headed into Finance in 2013?

Cornell attracts its share of Consortium finance MBAs

On your mark. Get set. This week, over 300 new Consortium students will launch their campaigns to earn an MBA by heading to New Orleans for the Consortium's 47th Orientation Program.  As in previous years, they will be engulfed by activity, events, recruiters, school staff, seminars, sponsors and celebratory gestures. For most of them, OP is a festive, uplifting time. They pause and take a week-long breath before embarking upon the frenetic pace of graduate business school. 

Among the new MBAs, who's headed into financial services in 2013?

How many among the 300-plus have expressed an interest in concentrating in finance at school or a career in financial services? As they take new twists and turns over the next two years, what do they aspire to do when graduation comes in 2015?

Let's consider the current environment.  The awful, dreadful financial crisis is receding into memory, although there is a haunting, lingering impact. The crisis and economic recession caused upheaval and changed the landscape at banks, broker/dealers, investment funds, insurance companies and private-equity firms.  Financial institutions are rushing to hire just as many experts in compliance, risk management, regulation and technology as they are in luring investment bankers, brokers, wealth managers, and traders.

With steady improvements in the economy  and with remarkable upturns in equity markets, this year's new MBA students won't need to whisper when they declare an interest in financial services. The job or role they dream of may actually exist in two years. Or the job or role may turn out to be something they never knew existed in their first days of a corporate-finance core course.

The new class of Consortium students, after the OP, will disperse and head off to 17 different Consortium business schools all across the country.  Of the total, over 130 have expressed some degree of interest in financial services, even if it is a tentative or preliminary interest. That number already suggests renewed confidence. In previous years, especially during the morale-plummeting crisis years, fewer than 100 dared to raise a hand to say they were interested in banking, trading or investment research.

Many of them, like other non-finance MBA students, are in career transition. Some are opting for finance after stints in other fields (non-profits, public service, engineering, or marketing).  Some are currently in banking or trading and will use the MBA (and what they learn in class) to leap from one segment to another (from, say, private banking to equity research).

No doubt they understand what they are about to take on.  They know this isn't the 1980s, when an MBA graduate Dartmouth could join Morgan Stanley's corporate-finance unit and plan to be there for 20-plus years and, with confidence, take steady, resolute steps to managing director.  They know it's possible Morgan Stanley may not exist (in the way we know it today) in 20 years. (Drexel Burnham, Bear Stearns, Salomon, and Lehman Brothers, favorite firms for MBAs in the 1980s, don't exist in 2013.)

They know they must plan a career in five-year segments. Even in finance, they know they must reinvent and rebrand themselves all the time and be willing to try something new when pushed against the wall. They know they must explore a variety of institutions, segments, roles, and options.  They know, too, the best opportunity may not be at Goldman or Citigroup, but could be at a regional investment fund, at a financial institution in Brazil or at a futures brokerage in Chicago.  If they don't know now, they will learn that roles in compliance, risk management and financial regulation are more valued by some banks than first-year jobs in M&A or on the currency desk.

MBA students in finance (including those at Consortium schools) tend to head to business schools with strengths in finance, where finance faculty are widely known and where finance recruiters swarm. They also head toward schools that already have a large concentration of students in finance. They want to be with others with similar aspirations or they don't want to be at a disadvantage. Like-minded students want to be with each other.

In this year's class, Cornell and NYU business schools will have the largest number of Consortium finance students. Michigan, Texas, Virginia, Yale and Indiana follow closely behind. These numbers are as expected, because these schools tend to support the largest numbers of Consortium students and some of them have historically attracted many students with an eye on Wall Street, banking, private equity, or investment management.

Students today, including Consortium students, are mindful to keep they must keep options open. When they are asked to indicate an interest before they start school, they will likely show many hands.  Many finance students will say they will pursue finance, plus something else. Often, that will be finance and consulting or finance and marketing.

Consortium students in the Class of '15 are similarly spreading their wings, while they have primary objectives. Over a dozen expressed an interest in venture capital and are likely aware of the difficulty in securing a position in a major venture firm, particularly one that resides on Sand Hill Road in Silicon Valley. Venture-capital firms hire MBAs from top schools and cherish candidates with strong technical experiences (and degrees), but are notably erratic in how they bring on whom they hire.

Another dozen or so are interested in investment banking. That wouldn't be unusual in any class. Despite the topsy-turvy world of investment banking (Who's laying off or reducing staff this week?), investment banking is still an important segment of finance, it will always be here, and there still remains the lure of working for such firms as Goldman Sachs, Lazard Freres, and JPMorgan.

Many more also say they will explore financial management, which captures areas from private banking and asset management to corporate finance at non-financial companies.  Others are interested in finance in specific industries:  real estate and energy, e.g.

The pairing of finance and consulting seems to be as popular as ever.  That might be a result of some students aiming for a particular firm experience (at, say, Goldman Sachs or Booz Allen or Blackstone), hopeful for an opportunity to have a prestigious, meaningful experience in their first few years and not necessarily loyal to a particular industry. Or they wish to be in an advisory function, which is what investment banking and consulting are about.

Not many expressed an interest in community banking, insurance, or financial brokerage.

Students willing to explore multiple concentrations also suggests a few more trends: (a) They know that the optimal dream job for an MBA graduate may not yet exist or is still in the making or (b) They may not yet be familiar with industry details to know they might be suitable for a certain segment. Many MBA candidates will learn over the next two years (or after they are hired by a financial institution) they are best suited for roles in risk management, audit, compliance or research.  The business-school experience is supposed to permit students to explore, get their feet wet in alien territory, and test new fields.

The daunting rat race of the recruiting process hastens the exploration effort, and that's unfortunate. It thrusts the new student into a boiling pot, where they must make career decisions overnight. Students declare where they will go to school in April or May, and by August, before they have sat through one marketing case study, they are swept into the helter-skelter pace of finding a summer internship.

For now, they get to explore, contemplate, and plan.

Tracy Williams

See also:

CFN:  Outlook for MBAs, 2013
CFN:  Consortium Orientation Program, NOLA-Bound, 2013
CFN:  Consortium Orientation Program, Minneapolis, 2012
CFN:  Consortium Orientation Program, 2011
CFN:  Consortium Orientation Program, Orlando, 2010
CFN:  Consortium Orientation Program, Charlotte, 2009

MBA Professors: Who's the Best?

NYU's Damodaran: Finance Pundit

Take any prominent business school, any of the schools recruiters and prospective applicants gush over. There is likely on campus a well-known, popular, favorite teacher, a campus legend who exudes business-school royalty. That professor would be the one whose course is in saturated demand and is a hot attraction.

That's the professor who has the knack for making corporate finance or economics lectures sparkle, who ignites the classroom with animated discussions of business decision-making, business strategy or financial maneuverings. She is the professor who delivers the lecture in operations research or derivative products with verve--an actress at the podium who explores a business-school case as if it were a movie script.


He would be the professor, an expert in his field, who commands in-depth knowledge in his subject, who has written tirelessly on the topic, and who is likely the industry's go-to source to explain to the public a financial trend, a theory of markets, a marketing ploy or the science of pricing goods. 

In finance, she would be the professor who transforms an intermediate accounting lecture into Broadway drama, successfully able to explain concepts of cost of capital or cost of goods sold with conviction and passion. And her students would get it.

In the world of business schools, lists abound everywhere: lists of top schools; lists of top places to study finance, marketing or non-profit management; lists of schools whose graduates have the highest starting salaries, and lists of schools most favored by recruiters.

There are now even lists of top professors.  How is it even possible to assess, rate and rank thousands of MBA professors across the country in an unbiased way? How do you assess fairly what it means to be a top professor? List-makers do it regardless, notwithstanding the subjective, whimsical nature of rankings.

Disregard for a moment the validity of rankings and lists. You might notice one name that tends to appear on many lists of top MBA professors, partly because he is indeed a highly respected professor. Or it's partly because he is popular with students, who fawn over his lectures and dive into his blog postings and writings. It's partly because they absorb his message and are stirred by it enough to jump into the dialogue. It's partly because of his masterly manner of communicating, an ability to explain finance in ways that are colorful, relevant and intriguing.

That professor would be Aswath Damarodan, a corporate finance professor at Consortium school NYU-Stern (who has likely taught dozens, if not hundreds of Consortium students over the years).  He has written several books on corporate finance, taught a generation of students at Stern, and, thanks to the the breadth and immediacy of the Internet, has blogged weekly on just about any finance topic he feels deserves his attention, insight and analysis. In a typical blog posting or essay, he explains the topic, provides analysis and shows trends, adds background, adds insight, and, as if he can't wait, offers a striking opinion. Sometimes it's an opinion that bites or hurts or certainly goes against popular discourse.

There are few finance topics he isn't afraid to address. His willingness to reach out to students (and alumni and just about anybody interested in finance), his eagerness to engage in dialogue with the public are likely a prime reason he appears on top-prof lists.

His blog postings, for sure, could be required reading for advanced students and even jaded investment bankers who might want to understand (big picture) the business they conduct (although his tone regarding investment bankers won't win fans from this crew).  His postings and explorations of ideas might help bankers and company CFOs understand whether the direction they are headed in  a deal is a path that benefits shareholders or a path that leads to financial doom.

In arguably the biggest corporate-finance headline of 2012 ("What should Apple do with its billions in cash?"), Damodaran gladly inserted his views, an analysis that would earn in buckets of fees if he were the mandated adviser.  Providing a fresh valuation of Apple shares, he conveys his blunt disappointment in Apple CEO Tim Cook: "I see Mr. Cook go from forum to forum, saying nothing of substance and wreaking havoc on the stock price almost every time he talks."

(This week, he updates his occasional analysis of the company, based on recent earnings, and he decides it is still safe to hold on to Apple stock, if you hold it. He had not yet analyzed the details of Apple's $17 billion debt offering, although he suggests accruing more debt could be a good thing at Apple.)

Damodaran has built his reputation and star power at Stern over 27 years.  He holds an MBA and Ph.D. from Consortium school UCLA.

The postings, his writings, and in-class discussions link finance theory and traditional analysis to current events, but he is not wedded to old theory.  For the most part, he tries to make sense of what's going on and then provide a passing point of view.

In early 2013, with gold markets headed for a free-fall, the professor stepped in to help students and his followers put some common sense around investing in gold. Damodaran, like many experienced investors (including guru Warren Buffet), wonders what's the big ado and fascination with gold as an investment, yet explains one or two cases where, in fact, investing in gold should be part of a balanced portfolio.

Damodaran won't hesitate to recommend the best way for a company to manage its balance sheet or shape its capital structure or the best strategy for buying back stock or paying a dividend. He didn't hesitate to declare that most large-scale acquisitions don't make sense in the long term.  Moreover, he says companies ought to do much of the deal or valuation analysis themselves and shouldn't rely too much on the conflicted advice from investment bankers.

Activist investors, such as those who have pursued an agenda with companies like Apple, JCPenney, and Herbalife, grab much of the publicity in the financial press. Some call for significant transformation in the company, whether in the board room or in production lines.  Some, well, hold companies hostage to get their agenda on the table, if only to trigger a quick short-term surge in the stock price.  Do they act against the objectives of long-term strategic investors?

Damodaran examined the question recently, weighed all sides, and decided in the end that the two groups don't act against the interests of the other.  Short-term activists, he argued, really look out for the interests of strategic investors.

Drama, flair, style and energy thrust teachers onto lists of best professors.  Damodaran, as former students would attest, has some of that, but his writings, teachings and spontaneous, well-reasoned observations about what surrounds him in the marketplace are what keeps him there.

Even the most astute MBA students in finance and those headed for cubicles at Morgan Stanley, Carlyle or Blackstone can praise his efforts to "break it all down" and tell the real story of what's going in financial markets. Consider his "Musings on Markets" a must-read for both first-year finance students and senior deal-doers.

Tracy Williams

See also:

CFN:  Most Popular Business School Professors, 2011
CFN:  Professors and the Global Imperative, 2012
CFN:  Most Satisfied MBA Alumni, 2011
 

Getting Pushed Backed, While "Leaning In"

Applicable to all under-represented groups?

So the topic that has made a torrent splash in the early weeks of 2013 is a new catch-phrase:  "Lean In," taken, of course, from Facebook COO's Sheryl Sandberg's new book of the same name. The book raced to the top of best-seller lists. The subject--how women can push (or propel?) themselves into the top echelons of business--is relevant. The advice and guidance are useful, although Sandberg acknowledges there are no quick fixes, no one special way to progress along the path, and certainly no assurances that every woman who "leans in" will one day find herself chair of the board.

Nonetheless, Sandberg determined it was time to put the issue back on the table and force companies and business leaders to assess where we are.  She advises women to seize control of their destinies, bang on the door and avoid waiting for it to open.

So next question. Are her advice and guidance relevant to other under-represented segments (URM) in business--Asians, Latinos and blacks? Does her message, including her instructions and urgings, apply to minority professionals? What happens when members of those groups dare to "lean in," ask for what they want, aspire to become senior business leaders and push for opportunity, promotions and adequate compensation? What happens when they "lean in," assert themselves, but then get pushed back, get pummeled or--even worse--outright ignored?  What happens if they are pushed back for not being patient or for being too vocal, too ironclad specific about what they seek in the next 10 years?

Let's now narrow this to minority professionals in financial services.  What happens if those from  URM, who thrive in, say, corporate finance, banking, trading, funds management, or equity research lean in and get pushed back? Get punched and knocked down in their efforts to seize a seat at the leadership table?

Career paths in finance are often rough, brutal--marked by periods of overwhelming workloads, evolving deadlines, demanding clients, mountainous risks, complex deals, blockbuster trades, tough decisions, and severe competition from other firms and from the colleague down the corridor. Many associates or vice presidents are aware it takes more than superior technical skills to get promoted, be rated highly, and win hard-fought pieces of the bonus pie. It takes stamina, perseverance, contacts, mentors, a thick skin, and bits of chance (lucky markets, lucky opportunities, and being in the right group or on the right team in good times).

So how do under-represented minorities in finance put themselves in settings where they can--more often than not--be in the right place in pivotal career moments?  How do they "lean in" to make sure they contribute to important client meetings, deals and projects--the deals and projects that get people noticed and put them on go-to lists of those who get to do bigger deals, manage bigger projects and oversee larger clients? 

Many minority professionals in finance and consulting already know the game; they have already seized half of it by enduring grueling recruiting processes and have earned treasured spots at firms like Goldman Sachs, McKinsey, Morgan Stanley or any of the notable private-equity firms, investment managers or hedge funds. Like many women in the same roles, they understand what it takes "lean in." They plotted ways to gain entrance into top schools.  They managed rigorous course loads in business schools and successfully navigated through numbing rounds of interviews.  They know what it takes to be aggressive, stand out, and grab opportunity when the doors open ever so slightly and briefly. 


Those who survive the pressures of doing deals, booking big trades, making investment decisions and meeting budget "lean in" in their roles of banker, trader, analyst, or researcher. They raise their hands to ask for plumb assignments, request to be put on innovative deals, and volunteer for special overseas roles. Always accessible and committed, they give up weekends, holidays and weekday evenings.

After a few years, they know it is critical to be on the inside of strategy sessions, senior management presentations, and any gathering to discuss ways to boost revenues or introduce new products and services.They find ways to nudge inside the doors where the biggest decisions are made.

But as they "lean in" and make exhausting commitments to the firm, the client, the deal, the portfolio and the business, many have not adroitly figured out what to do when they get "pushed back." Getting pushed back occurs more frequently than they expected. Often the push-back occurs for subjective, unfair reasons. Sometimes the push-back is blind-sided gesture on the part of a manager, colleague or management team.

Getting pushed back too frequently for inexplicable reasons leads to discouragement. It triggers floods of emotions and self-reflection:  What did I do wrong? What can I do to alter their perceptions of me? What more can I do to earn visible assignments or prove myself in a bigger role with significant responsibility? Why do they not recognize me when I raise my hand, make noise, stomp my feet and share my ideas for new products, clients and revenue growth?

Sometimes after such self-reflection, they find ways to rebound. Some learn the art of bouncing back and conjure the strength to rebound not once, but time and again. They take a different angle or approach, when they "lean in."  They respond to feedback. They return with an even better project idea, finance model, or client tactic. They re-commit to the team, deal, or firm. They find other mentors to toot their horns or help with a career strategy.

Unfortunately, getting pushed back too often leads to bewilderment and loss of energy and enthusiasm. Eventually it leads talented under-represented minorities (and women) to withdraw or recede while still on the job and ultimately to resign from the job itself. Bouncing back after leaning in and getting pushed back over and over becomes too draining, too stressful. 

How to bounce back from the push-back is usually the kind of guidance many mid-level finance professionals from under-represented groups (including women) crave:

When senior managers compose the deal team that will work on the billion-dollar underwriting for, yes, Sandberg's Facebook, how should they barge their way onto the team? When the team is being composed to advise Google, Eli Lily or John Deere on its next major acquisition, how do they ensure they are selected?

When a sector leader selects someone to lead a business group in London, Brazil or Tokyo, how do they win such a coveted assignment? When the institution rolls out a new product to a new client group in a different part of the country, how do they make sure they have a fair shot at the opportunity to lead the product campaign?

When they do extensive research, exquisite financial modeling or insightful analysis and come up with novel ways to assist a client or structure a financing, how do they ensure their voices are not silenced and their ideas not stolen?

As year-end approaches, when they review their accomplishments and contributions, how do they ensure in evaluation season their rankings or ratings won't slip, because they don't have champions or advocates on their behalf or because others diminish their contributions?

There is no formulaic solution to handle the "push-back."  Much depends on the environment, the firm culture, the immediate surroundings, management hierarchy and the financial state of the institution. Much also depends on personal goals and priorities (something Sandberg's book examines from cover to cover).  In all cases, it helps to reassess a situation, review those personal priorities, maintain confidence, and recommit to what is important. In some cases, it even helps to "lean on" others more experienced (not necessarily "lean in") who have traversed the same corporate routes and endured similar push-backs and setbacks.

Motivated and talented minorities and women lean in continually--every day, throughout the year, in every transaction, trade, client session, or discussion of risks, revenues, investments and new products.  They want to understand the best ways to thwart the "push-back." And they want encouragement and energy to rebound one more time with confidence that all the effort has a chance to pay off.

Tracy Williams

See also:

CFN:  Making Demands on Diversity, 2013
CFN:  Venture Capital Diversity Update, 2011
CFN:  MBA Diversity: A Constant Effort to Catch Up, 2012
CFN:  How Mentors Can Help, 2009
CFN:  Mentors:  Still Critical and Necessary, 2010
CFN:  Affinity Groups, 2011

Is the MBA under attack, too?

The MBA: Evolving and Adapting

Press reports in the past year have occasionally announced the dismal state of the law degree. They've shown the downward trends in law school applications and the widespread lack of opportunities for new law graduates. And there is a lively, fiery debate about what is and what should be a legal education. A law student spends three years in school and, after assuming huge debt loads and making boundless financial sacrifices, graduates into the great unknown.

Should she head for the dungeons of corporate law? Should he explore other channels (the public sector, e.g.), where limited opportunities for sustained employment exist? What should they do, when legal positions have dwindled in large numbers across the country in recent years? Should law schools take the lead in assisting their graduates? (Some have done just that in the past year, by hiring some of their own graduates or subsidizing them in their first-year jobs.) Should law schools spearhead a radical change in legal education by eliminating the third year of classes and permit students to launch careers with one less year of burdensome debt?

Law deans, judges, attorneys, prospective students and law professors are in the midst of a vigorous discussion about the future of the law degree and the roles and responsibilities law schools will have. (See Third-year Overhaul at NYU, Law Schools Worth the Money?)


Is the MBA similarly under attack and similarly encountering a dismal outlook? Are there similar declines in applications (to business school), decreasing opportunities across the board, and calls to contract two years of full-time business school into a fast-track, 10-12-month degree?

Or is this an apples-and-oranges debate?

Trends in applications and enrollment at law schools and business schools run along different, sometimes similar tracks. They are both affected by various factors--some the same, others very different.  While law schools experienced application declines over the past decade, business schools did so, too.  The recession and financial crisis had impact on both. Yet applications at some business schools began to rise a year or two after the peak crisis years of 2008-09, partly because some young professionals decided to try to "wait out" those years of turmoil in productive ways, by returning to school.

Both degrees are influenced by stark business factors. Banks, insurance companies, and hedge funds reduce staff quickly (and often rashly) when there is a decline in revenues, deal flow or clients. Law firms  experience a concurrent decline, too, and reduce staff or decide to hire fewer associates.  And reductions, lay-offs and bleak opportunities discourage prospects from applying to law and business schools. 

Both are influenced by the mind-boggling, irrational increases in tuition and fees.  Candidates for the MBA or JD will often have the interest, aptitude and time commitment. They will dream of coursework in legal theory, contracts, property, accounting, corporate finance or business policy. They will aspire to become partners in corporate law firms or consulting firms. But they can't rationalize the costs and the likely absorption of too much debt.  

But factors that influence financial institutions--like reform and regulation--might have a different kind of impact on law firms, which might step up to assist in regulatory compliance. Other factors--like a trend for companies to out-source basic legal chores to low-cost sites overseas-- have a detrimental impact on corporate law firms in the U.S.

Still, the swirl of nerves and a trace of panic that might be usurping some law deans doesn't yet seem to be doing the same in business schools. That might be partly due to the fact that business deans are accustomed to change and almost always encounter uncertainty about their purposes in the future.

MBA application trends at top schools slid significantly in the crisis years, but in the past year or so, there are fleeting signs of an upturn.  Consortium school UCLA, for example, had a 22% increase in MBA applications last year.  After a two-year decline, applications to Stanford Business School rose this year. (They fell below 7,000, but are approaching that magic threshold again.)

Two years ago, applications to Columbia Business School fell 19%--a cause for concern and something the school blamed on the languishing state of Wall Street, since the school has always had a bustling pipeline of MBAs going into banking and finance.  Yet applications rose 9% last year and seem to be on an upward trend again (above 6,000)--thanks in part to a more settled state on the Street. Applications at Consortium school Dartmouth have increased the past two years, and Consortium school Yale will likely boost applications above 3,000 as it moves into a new facility.

Recent reports show over 286,000 GMAT tests were scored last year--an 11% increase. That's partly attributed to the large number of foreign students interested in the MBA (16% increase).  In fact, only a third of the tests taken are from U.S.-based candidates, proving how the soaring interest from international students has helped to boost or sustain interest in the MBA.

However, a few other factors might explain why the MBA is not yet under attack any more than it has always been:

1.  Law schools, all of a sudden, find they must explore ways to reinvent themselves or redefine legal education.  Business schools, on the other hand, over the past two decades have routinely tried to reinvent, redefine and innovate--some more successfully than others, some more radically than others.  Many contend business schools still haven't kept up with the changing business times sufficiently, but few accuse them of not trying.

Witness the changes in curriculum and core courses at top schools every other year. Witness, too, how schools hopped at the chance to understand e-commerce and Internet businesses. Notice the grand push by the same schools to require international experience and courses in ethics, decision-making, and risk management. 

2.  Certain industry sectors still require the MBA degree as if it were a certification. They see specific value in the MBA and hire from the business-school pool routinely each year.  They include consulting, investment banking, and many firms in investment management, trading and research.  As long as Goldman Sachs and McKinsey thrive, it appears, they will a large batch of MBAs from top schools year after year to fill the ranks and to offset expected attrition. And as long as Goldman and McKinsey hire, others in the industry will follow suit. 

3.  Business schools try to respond to economic and business trends and to the voice of a large corporate constituency.  They listen to what business cycles suggest or what business leaders look for in a next generation of leaders.  They respond by revamping curriculum, introducing new courses in, say, entrepreneurship or international development, or by teaching the lessons learned from a recent crisis or marketing debacle. Some respond well; some respond inadequately, but most try.

4.  The influx of foreign students has changed the face of most top schools.  It's no longer unusual for top schools to have large numbers of students from India, China, Pakistan, Nigeria and Latin America.  They recruit internationals, and they have successfully rationalized the benefit of a diverse, world-oriented student body.

Foreign countries have been eager to send some high-potential junior managers to MBA schools like Virginia, Michigan or USC to learn from the gurus of management and finance--with hopes they will return to their home countries to fill the management gaps of a growing, developing economy.  Many have observed or written about China's obsession speed up economic develop by hiring trained middle managers to run an exploding (at least until recently) business growth. An MBA education, especially from a U.S.-based school, provides a solution or a quick fix.

If the topic is business schools and MBAs, there will always be debate about the relevance of MBA degrees and uncertainty about how schools encounter evolving business scenarios. Seldom a day goes by without a business-school dean grappling hard with how the school will adapt and fend itself from the factions who attack it.

Tracy Williams

See also:

CFN: The MBA--Remaining Relevant, 2011

Today's "Bulge Brackets"

Who comprises the Bulge Brackets of 2013?

"Bulge brackets" in investment banking was once an acclaimed list of investment banks that dominated most of the activity in the industry--from staid, conventional bond underwriting to mergers-and-acquisition advice to flamboyant IPOs.  "Bulge bracket" signaled dominance and prestige. It implied a bank was a major player. Statistics and market share determined who made the list or not, and it was often a moniker awarded to banks that finished in the top five in most finance categories.

Say "bulge bracket" and those who trade and do deals and those who follow the industry think immediately of Goldman Sachs and Morgan Stanley.  Just a few years ago, Lehman Brothers and Merrill Lynch were "bulge bracket" mainstays.  Go back decades, and banks such as Salomon Brothers, Drexel Burnham, First Boston, and DLJ might have squirmed their way into a top-5 listing. Often they did, back then. Today, they don't exist or were absorbed into oblivion long ago.

Over the years, MBAs in finance with eyes toward Wall Street often wanted to work at "bulge brackets," because they were movers and shakers, the behemoths that shaped, dominated and influenced corporate and municipal finance. They were the firms that generated the most revenues, carved out the greatest market shares, swept up much of the prestige in doing deals, and--to the delight of MBAs wanting to work there--paid the biggest bonuses.

The term is not used as much today. Some still use it, but the financial media don't flaunt it as much, if it all. That's likely because of (a) the disappearance of some of those storied names in American finance (Salomon and Lehman, e.g.), (b) the dominance of banks with commercial-banking heritages on current lists (JPMorgan, Citi, Bank of America, Deutsche and UBS, e.g.), (c) the continuing blending of traditional investment- and commercial-banking roles, and (d) the ongoing uncertainty of who will survive rapid changes in the industry. 

In the past and even today, if there were one list bankers wanted to dominate, it was often the list of M&A advisers. Mergers and acquisitions in investment banking has often been the heart, soul and core, not because they generated the most revenues, but because M&A bankers have a direct line to CEOs of the client companies.

M&A bankers strive to be the conscience guiding the CEO and board members on corporate strategy, business expansion, new investments and significant acquisitions. They steer CEOs, knowing that CEOs, too, can direct other business to the bank--business including bond underwritings, project finance, new equity offerings, and corporate lending.

The "bulge brackets" in M&A activity today include the same, familiar names (Goldman Sachs and Morgan Stanley). Meanwhile, institutions with traditions in commercial banking or foreign operations have shoved their way to spots near the top. After they decided in the late 1990s to exploit their large capital bases and balance sheets and thanks to loosened regulation, these institutions (the JPMorgans and Citis) earned lead roles in underwriting activity (especially in bonds and loans) and found a back door into strategic M&A. It also helped, too, when they raided other investment banks for top talent or acquired other established investment banks to propel them through M&A doors. 

In 2012, Goldman Sachs and Morgan Stanley were the top two M&A banks (according to Thomson Reuters), based on total deal value.  Not a surprise.  JPMorgan and Citi rounded out the top 5. Also not a surprise.  Barclays emerged as no. 3--a surprise leap, spurred mostly by a surge of activity in the U.S.  The M&A unit at Barclays, remember, includes bankers with old Lehman ties after Barclays acquired Lehman's U.S. broker/dealer during the financial crisis, 2008.

At Bank of America, its Merrill Lynch unit seems not to have had a similar influence--at least in M&A.  BoA slipped to 8th in recent lists.

Some juggling and repositioning should continue into 2013, because all of the above are scratching their heads figuring out the impact of regulation and straining to squeeze more revenue out of an uncertain business model. Even this week, Morgan Stanley hinted that it needed reduce the scale of its fixed-income unit.

All of the above, as well as Credit Suisse, Deutsche, and UBS (three more names also in the top 10), are major financial institutions, subject to tough capital and liquidity reforms called for by Basel III and Dodd-Frank. Hence, in 2013, all activities in investment banking--from trading to underwriting and strategic advisory--are on the table, subject to revamping if necessary to reach return-on-capital targets.

UBS is in a peculiar place. It claims to be doing now what other banks will need to do over the next two years--withdrawing from any investment-banking activity it can't rationalize. Nonetheless, in 2012, it ranked as a major investment bank--at least based on league tables. It placed 9th in M&A activity--garnering a notable share of deals, especially in Asia.  In late 2012, it made prominent announcements about vast reductions in investment-banking staff--especially in fixed-income markets.

It may still choose to support its mergers team, because M&A requires less capital and hardly needs use of the balance sheet. But trends today suggest that being big in all other investment banking units (including corporate lending, mezzanine financing, bond underwriting) helps drive M&A--not necessarily the other way around.

Meanwhile, don't discount the "boutiques."  They lack capital. They can't swing for the fences with big balance sheets, nor can they provide bridge loans or mezzanine financing to clench deals or get them done quickly. (Lazard and Evercore rank in the top 13 among M&A advisers.) Their bankers are the ones who whisper to CEOs they do deals without the blatant conflicts of interests the "bulge brackets" often have.

And just as important, because they are organized in simple structures without trading arms, lending units, and armies of industry teams, "boutiques" are not subject to the vast amounts of regulation, reform and re-engineering "bulge brackets" will encounter this year and the year after and the year after that.

Tracy Williams

See also:

CFN:  Morgan Stanley: Can It Please Analysts? 2012
CFN:  UBS Throws in the IB Flag, 2012
CFN:  Goldman Sachs: How Does It Do It? 2010
CFN:  Banking Boutiques: What Are the Advantages? 2009

MBAs Gear Up for Summer, 2013

Now is the time to prepare for interviews

Most MBA students know that to secure the right job in financial services, you can't stroll out of the classroom, jump into an interview suit, and glide into a round of interviews.  Preparation is critical. You don't secure the dream job with a few practice sessions of the elevator speech.

One of the best ways to gear up and prepare for the rigors of recruiting season is to have a useful framework, one that you can use to formulate a strategy, demonstrate expertise, and express a self-brand. The goal is to get from campus to a significant summer internship in finance in investment or corporate banking, investment management, private equity, asset management or corporate finance.  Indeed in the post-crisis environment of 2013, the world of finance has emerged from the abyss, but opportunities continue to be fleeting, segmented and scarce.  Approaching interviewing season with strategy, framework, optimism and unbridled confidence can go a long way. Not to mention a proven mastery of technical skills.

The Consortium Finance Network hosted its second annual fall webinar on "Internships and Recruiting" Dec. 11 to help first-year Consortium MBA students in finance plan for the upcmoing interviewing season and emerge with offers from their top-choice institutions.  CFN hosts Camilo Sandoval, D-Lori Newsome-Pitts and Tracy Williams welcomed panelists Eric Lane and Mark Santos, recent Consortium graduates and led an hour-long discussion to launch the 2013 recruiting campaign.  For the MBA students participating, panelists provided stories and advice from their own successful campaigns to win job offers.

Lane is an associate in M&A and equity finance at Loop Capital in Chicago, a mid-size investment bank. Santos is in corporate finance at Dell, the computer company. Both entered business school at the height of the crisis and were able to use effective strategies to get from campus to positions in finance during a time when it seemed as if nobody was hiring.
 
CFN's framework for approaching interviewing season revolves around the MBA student demonstrating competence, experience or expertise in five pillars:

(a) background, 
(b) interest, 
(c) drive, 
(d) capability and 
(e) insight.  

The financial institution, whether it's Morgan Stanley or Loop Capital, is evaluating the candidate, in most cases, in those five broad categories. The successful candidate demonstrates excellence across the board throughout the process. The process includes information interviews, first-round interviews, and call-back, on-site interviews.

CFN, during the webinar, showed how MBA students, in numerous ways, can show excellence in each area.  Knowing that interviewers, for example, are seeking to detect interest and drive, MBA students should seize the process, demonstrate interest and drive and do it frequently.

Lane advised MBA students to look beyond the better-known institutions, the bulge-bracket firms such as Citi and Goldman Sachs, and explore working, too, at niche firms, regional firms, and boutiques.  Loop Capital is an example, as well as such firms as Lazard, Greenhill, M.R. Beal, and Evercore. Opportunities may exist outside the well-worn paths and may afford visible, broad roles for first-year MBA associates.

Santos advised MBA students interested in finance to take steps even beyond financial institutions and examine roles in corporate finance, corporate development, M&A and strategy within client companies--the industrials, the manufacturers, and the technology companies, such as, say, Dell, IBM, Pepsico or Eli Lily.  The companies have critical roles in corporate finance and ultimately choose to work directly with investment banks for advice or financing.

The formal interviewing season for MBA summer internships usually starts immediately after fall exams. The process accelerates in January. Major financial institutions have already identified some candidates they covet and desire to see on interview lists. They will inform some of them they have been invited to interview on "A" lists.  Candidates not on these lists can still seek interview slots in other ways. Smaller firms and corporates proceed with a different recruiting agenda and timetable-- partly because they have fewer slots and opportunities. 

Second-round interviews, where MBA candidates are brought on site, can occur from mid-winter until early spring. Many MBA graduates have told legendary stories about their interviewing experiences--often unique, sometimes memorable--to convince a Goldman Sachs, Credit Suisse, or Wells Fargo to hire them. Some have told about enduring sessions to show how they "think on their feet," how they would manage a trade or deal transaction, or how they would respond in a market crisis.


Throughout it all, successful candidates in the past had a few things in common:  a clear goal, a workable strategy, and a useful framework, all on top of networks, mentors, and special ties inside some institutions. Most successful candidates also had a passion for finance, boundless knowledge about markets, trends and products, and glowing confidence.

During the webinar, panelists and hosts reminded students of the importance of demonstrating knowledge and polishing it with rational viewpoints about markets, past transactions, and economic trends. An informed opinion shows candidates have thought about the topics of the moment and conveys leadership potential. Panelists also reminded students to concentrate on how to stand out and differentiate among others vying for the same spots. Demonstrate excellence, but distinguish yourself. However you look at it, it's a competition.

The webinar presentation and recording will be available to students who registered for the event and to others upon request (through the CFN's Linkedin page).

Tracy Williams

See also:

CFN:  Internships and Recruiting, Fall, 2011
CFN:  MBA Job Hunting, No Need to Panic Yet, 2012
CFN:  The Toughest Interviewers, 2012
CFN:  Mastering Technical Skills, 2010

On Campus: Midterms and Beyond

USC-Marshall (above) announces a new "MBV" program

Across the country at top business schools, MBA students keep a watchful eye on all that's necessary to secure summer internships and full-time jobs.  It requires hard, steadfast work these days to secure work. But through it all, they keep an eye on yet another ball--midterms now, final exams later. It's a task of terror to attempt to pile on 6-8 weeks of intermediate corporate finance into a few days.

On campus these days, including at the Consortium 17, students scramble to find jobs for 2013, ponder the presidential election in the days to come, rush off to case-group meetings, and bury themselves in cubicles to study for an exam in advanced accounting. The pulse is steady, even as many try not to worry too much about what will or won't happen by next summer.

Choices and Challenges

In between normal academic chores, Dartmouth (Tuck) MBA students found an interesting guest on campus two weeks ago, as part of the school's ethics program. Tuck hosts a "Choices and Challenges" series of speakers in the ethics program.  It invites guests (experts, experienced managers, or alumni) to study, analyze and ponder tricky issues of ethics in business--from managing clients, employees and business units to managing portfolios, investing in new businesses and doing deals.

Andrew Fastow, the former CFO of Enron, came to Hanover (N. H.) to discuss what the current generation of MBA students might learn from the frauds and misrepresentations of the 1990s high-flying energy company, Enron.  Fastow paid his dues by spending five years in prison. Now comes the time to share lessons learned and morals unearthed from years of Enron financial chicanery.

Fastow, who, too, has an MBA (from Northwestern), talked to students about deceitful off-balance-sheet transactions Enron employed. "I used loopholes in the rules," he said, "to get around the principles of of rules."  He spoke to students also about "degrees of fraud," how fraud is not always committed in obvious ways, but in the way of incremental decisions and steps. 

Rankings Hoopla

Business-school rankings, as just about every MBA student or dean knows, can be useful, but they can be dangerous, tricky and misleading. And among the dozen or so institutions and publications that present lists, which one (or ones) are most authoritative?  Sometimes they can be inconsistent and wrong. Yes, list-compilers make errors, perhaps more frequently than they admit.  The Economist magazine this month presented its list of the world's top business schools.  Some Consortium schools, including UC-Berkeley and NYU-Stern, appeared on the list.  The magazine, however, made an odd, somewhat embarrassing mistake with two other Consortium schools.

When the list first appeared, it placed Virginia-Darden no. 2, followed by Dartmouth-Tuck at no. 3--astounding achievements for both schools, when measured against business schools around the globe.  However, shortly afterward, to its own chagrin, the magazine was forced to announce an egg-in-the-face correction. It had made an error. Its list was not what it meant.  Dartmouth was supposed to be no. 2, and Virginia no. 3--probably an insignificant switch in a list of outstanding, prominent schools, but an embarrassment for the publication and a cause of wonder at Dartmouth, Virginia and perhaps all top schools.

Does this mean that such lists are wreaked with more than a few errors, inaccuracies and misrepresentations? ("Degrees of fraud," as Fastow would say.)  Have there been cases in the past when list-producers have made errors, but were too embarrassed to announce a correction and decided to correct the error in another list the following year?

And which list to believe, use, discard, ignore or shrug off? Recent lists, for example, show the top school with the best faculty was Carnegie Mellon (Tepper) (by The Economist) and UC-Berkeley (by the Princeton Review).

An MBA for Vets

How about a new degree certification? The MBV.  USC-Marshall this fall announced a new master's in business for veterans, essentially an MBA program geared for armed-forces veterans.  The program starts in the fall, 2013. Plans call for a one-year, intensified program to leverage the experiences of verterans and to enhance leadership and organizational skills they gained in the services.
 
Trends in Apps

Business schools everywhere experienced application declines in the past year and are bracing more for declines in the coming admission season.  The reasons have been hashed, explored and analyzed.  Schools haven't concluded yet whether declines are a momentary dip or part of a new long-term trend (declines falling to a stable plateau). 

One school, Cornell-Johnson, thinks declines may be due to factors beyond the sentiments of twenty-somethings and factors beyond tuition costs and employment uncertainties. Avoiding declines can be overcome, it says, by novel approaches to recruiting. Cornell reports its applications the past year were up 17%; revamped recruiting strategies have helped, it contends.

First of all, it has improved recruiting efficiencies--staging joint recruiting programs and presentations with other top schools.  Second, it says applications increased because of aggressive efforts to reach out to under-represented minorities and international students in Asia and Latin America.  Now in 2012-13, Cornell waits to see if this is a one-year spark or part of a welcome long-term trend in attracting top students to Ithaca.

Tracy Williams

See also:

CFN:  On Campus:  Getting Back to School, 2012
CFN:  On Campus:  No Summertime Slowdown, 2011
CFN:  On Campus:  Admission Season, 2011
CFN:  On Campus: What's Up? What's New? 2011
CFN:  On Campus:  Getting an Offer! 2011
CFN:  On Campus:  Never Enough Time, 2009
CFN:  On Campus:  Ready to Seize Opportunity, 2009
CFN:  On Campus:  Countdown to Summer, 2010
CFN:  On Campus:  Spring Fever, 2009
CFN:  On Campus:  Recruiting, a Sixth Course, 2009

Are MBAs turned off to Investment Banking?

In the past two weeks, national media outlets hopped on a storyline, proclaiming that MBA students and graduates in finance have reached a boiling point of discouragement in investment banking and other activities in financial services.  The Financial Times and CNBC reported last week that MBAs at top schools are somewhat turned off to investment banking as a long-term career, at least based on hiring patterns the past few years. Yahoo reported similar trends last week.

The Financial Times reported the dimming in popularity of banking and finance in Wharton's recent MBA classes.  In the past three years, the percentage of graduates entering banking has declined from 25% in 2008 to 16% in 2011.  At Harvard, MBAs choosing banking declined from 10% of its class to 7%.

Are MBAs turned off? Or are they scared off? Are they turning away, or are they looking more closely at alternatives--like consulting and entrepreneurship?  Is there a campus backlash toward the industry? Or has the industry done a poor job of attracting and retaining graduates? Are the numbers a misrepresentation of what might be occurring--that banks have become imprecise, whimsical and peculiar in their hiring processes?

The general consensus among students, graduates and perhaps deans and faculty is likely this:  MBAs are not necessarily turning away from investment banking, as much as they might be fatigued at the industry's not being able to determine where it is going from here.

Faced with regulation, reform and not an inkling's notion of new sources of stable revenues, the industry has wavered in recruiting, hiring, development and retention. Discouraged MBAs are likely turning to other industries that can at least promise with some conviction a career path, upward mobility, a healthy environment, and--to say the least--a job for the next 3-5 years.

Each year, including at Consortium schools, thousands of new MBA students declare a possible interest in investment banking. As they learn more about industry uncertainty, they pay attention to exciting appeals from other industries. Little by little, they turn elsewhere--to industrial companies, to start-ups, to consumer companies, or to consulting.

Consulting continues to be a popular alternative, even while consulting and investment banking share common experiences--long hours, project orientation, client immersion, tight deadlines, industry specialization, compensation tied to incentives, prestige, and demanding clients. The consulting firms, it seems, have been more successful in recent years in offering a more defined, more predictable, and more certain career opportunity.

Investment banks, no doubt, have little problem in filling needs from year to year at all levels. At least the current needs for the moment. The positions become open, and supply of professionals always exceeds demand. When they huddle among themselves, industry leaders worry, however, whether they are attracting the best and brightest in finance, capital markets, financial analysis, and client management. In soaring times in the 1990s and mid-2000s, investment banking could lure those who might otherwise have been at the top of their fields in physics, astronomy, mathematics or law. Are the top banks now surrendering the creme de la creme to the payrolls at McKinsey or Booz Allen or to Kleiner Perkins, Google, Apple, Citadel, or John Deere?

MBA students and recent graduates who genuinely have an interest in banking wonder whether banks are taking the right steps, beyond lavish receptions and fly-backs to New York City, to improve the environment in investment banking? Are they focusing properly on the development of younger bankers and providing an environment to promote longer career stints? Have banks gone beyond the familiar mindset of hiring associates in large, flowing numbers when there is increased deal flow, only to dismiss them in waves when there is a hint of a downturn, with hardly a care about what they can do to help associates learn, improve, dissect markets, manage clients and prepare for a career of 10-plus years?

Many students and recent graduates don't necessarily think so. And that might be reflected in the recent trends.

What are other factors discouraging them from chasing after investment banking with the same passion and enthusiasm MBAs did only a few years ago?

1.   Uncertainty and risks in choosing this career path. This has been discussed and hashed out often. MBAs who must invest tens of thousands in graduate education, beyond the opportunity costs from leaving current positions, are not sure they want to take the risk in going into banking roles, only to be dismissed less than two years later when a downturn of any kind threatens.

2.  Work environment and work culture.  The stories of the lifestyle of an investment or corporate banker are legendary--80-100-hour work weeks, little flexibility in schedules and weekends, and indifference to the contributions analysts and associates make.  The industry always promises to improve the culture and make it more humane.  The gestures in the short term are applauded; however, there is a long-term reluctance to change the environment. The pressure to generate revenues from an uncertain flow of deals supersedes the importance of tending to the day-to-day environment of associates.

3.  A LIFO approach to managing personnel numbers.  An ugly tradition of investment banking is to  beef up hiring when the going is good and to reduce staff in droves when there lies a looming threat to deal flow or incentive compensation.  Notwithstanding the performance and potential of analysts and associates, senior managers tend to take a LIFO approach--"last in, first out"--when orders from upstairs require staff reduction. MBAs are astute enough to know this practice might continue and wise enough to decide they may not want to be subject to it.

4.  The relentless banter about re-engineering and restructuring in the industry. Since the financial crisis and in the midst of Dodd-Frank and Basel III reform, investment and corporate banking is evolving. Some contend a major overhaul is under way or about to happen.  For new MBAs, there is continuing specter that drastic structural change is under way in how deals are done, how groups are formed, how clients are managed and how people are paid. MBAs may not be sure they want to launch careers when the industry is in the midst of soul-searching.

The numbers reflect souring sentiments. However, rest assured, at top schools there continues to be a core of students and graduates interested in corporate finance for finance's sake, not for the sake of what the industry always awarded--prestige, travel, headlines from deals, and lucrative bonuses. These are the MBA students and graduates who pursue banking because of the lure of the deal, the appeal of market activity, and the thrill of finding and delivering financial solutions to Fortune 500 companies.

They are the ones who withstand the ills of the environment and culture and see investment banking as a process of building crucial finance skills and experiences for the long, long career haul. They endure both the good and bad, appreciating newfound knowledge and understanding of markets. The declining trend is not yet alarming to banks, because supply is still steps ahead of demand and because hard-core finance graduates seem to always navigate their ways toward banking.

Tracy Williams

See also:

CFN--Investment banking vs. private banking, 2009
CFN--Is investment banking still hot?  2011
CFN--What about corporate banking? 2010
CFN--Who's heading into finance?  2012

Who's Heading into Finance, 2012?

Over 85 Consortium first-year MBAs this year indicated an interest in finance or financial services. That is within the range of what CFN has observed over the past four years--typically a range from 80-90, about a quarter of the total number of Consortium first-year MBA students in 2012.

In the aftermath of the financial crisis and amidst the occasional turbulence since then, many would swear the numbers of those expressing interest in finance would have declined over the years. MBA students, we are finding out, continue to have varying levels of interest in financial services. But most of them are less eager to rush to Wall Street to become associates in mergers & acquisitions at a big bank. The opportunities they dreamed of while applying are not always evident when recruiting season starts. And some, after they learn the process and procedures to secure Wall Street jobs, are reluctant to play the hard ball it sometimes takes to get there:  lotteries, informational interviews, technical interviews, and rounds and rounds of sweltering sessions with senior bankers. 

That's not to say Consortium MBAs aren't adequately represented on Wall Street. Year after year, many do find spots within the investment-banking corridors of Goldman Sachs, Merrill Lynch, Barclays, and JPMorgan. They thrive there, too.

Among the 85 or so, interests this year, as in recent years, vary from private equity to community banking, real estate (yes, even after that debacle in recent years), corporate banking, financial consulting, private banking, asset management and energy finance. MBA students in finance in 2012 know they must evaluate opportunities carefully and always make sure they have plenty of options. The recruiting game changes too often, too quickly and too vigorously. Not even the best, most experienced MBA students can become too confident or comfortable.

In this year's first-year class, it's no surprise that 14 from NYU-Stern will explore finance. But NYU is not the finance leader this year, as it tends to be among Consortium classes. At Cornell, 16 have expressed an interest in finance, eight at Rochester, and five each at Yale, Virginia, and Emory. (At least two from each of the 17 Consortium schools said they intended to study, explore or pursue finance.)

These numbers will likely change, just as students' interests and ambitions change. Opportunities in 2013 and how they present themselves this fall will either boost these numbers or cause them to dwindle. Seemingly remote factors as Europe in crisis and a presidential election, believe it or not, can have a direct impact on how many MBA associates banks, insurance companies and industrial companies will hire for the summer, 2013. How students survive finance, accounting and capital markets courses will have impact, too.  The 85 could blossom to 100 or dwindle to 60 by graduation, 2014.

The same numbers above often tend to be under-stated, as some students have many interests and may not yet be comfortable selecting one concentration before school starts.  These are the large numbers of MBA students interested, for example, in both finance and marketing, finance and economics, finance and corporate strategy, finance and international business.

Stay tuned, as students discover what they really want to be and do and as the finance industry evolves and rumbles along.

Tracy Williams

See also:

CFN:  The Class of 2012 Heads Out

CFN:  Composing the Class of 2014

CFN:  First-year MBAs, Internships, Class of 2013

CFN:  Finance Hiring in 2010

CFN:  Composing the Class of 2013

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Consortium OP 2012: Getting Psyched!

Hundreds of new Consortium MBA students--beaming with glee and pride after having been accepted by top business schools and, in many cases, after having received full-tuition fellowships--will converge on Minneapolis for the Consortium's annual Orientation Program. They don't go alone.  Hundreds of others, including Consortium alumni, business-school staffers and professors, industry speakers, and corporate recruiters will touch down in Minneapolis, too, and participate in panels, discussions, networks, and career fairs and welcome over 300 new Consortium MBA students to the b-school experience.

The OP, as it has evolved over the past four decades, is more than a celebration of admission.  Programs exist for alumni of all years and experiences.  This year even includes a day-long examination of the consulting industry for those interested in a career in consulting.

The panels, events, and presentations help students gear up for b-school, recruiting, coursework, specific subjects, casework and career decision-making. September looms and all that comes with it (new campuses, new environment, new classmates, challenging courses and swamping workloads) follows behind. The transition from workplace to campus starts now, and the Consortium OP makes sure students are ready. (This year marks the Consortium's 46th annual OP.)

Students and alumni who attend should maximize what they get from the OP.  What a waste it would be if they shrug it off as a short respite away from current work, a brief chance to take a breather before preparing for the move to Darden, Tuck, Marshall or Haas.  This is the time to leap at a gift given--an extraordinary networking event with opportunities to outline what you want most from business school and learn a little something in the process. 

How can MBA students and alumni optimize the week? Many come with an agenda; many come with hopes, while some come crossing their fingers wishing for luck to meet the right corporate representative with arms full of folders and booklets describing real job opportunities.

Consortium students and alumni can make the best of the week, and in years past, many have done so dutifully. They attend the sessions, luncheons, panels and corporate events, even resisting the temptation to sneak away to tour the town or loiter about in local bars.  What can this year's batch do?

1.  Pace yourself, organize your time, and acknowledge that with an onslaught of events, programs and panels, you can't do it all. But if you have a plan, stick to it, and allow for free time, you can do, see, and meet what you design on your agenda.

2. Absorb the knowledge; listen out for and welcome the wisdom shared by experienced alumni, corporate representatives, business professionals, professors and business-school deans.  The talent, wealthy experiences, corporate skills, and intellectual breadth concentrated at the OP are enormous.  Allow as much of that to rub off as possible.

At OP, there are flurries of information, knowledge, and insight that are passed around and shuffled about--during panels, during coffee breaks and dinners, even on elevator rides or during idle chats around the hotel fountain.  Gatherings as big as a hundred or as small as a couple discuss companies, business trends, schools, cities, hot opportunities, financial innovation, marketing ideas, and the prospects of start-ups. They discuss favorite cities, attractive regions and countries (hot spots), and desirable entry-level positions in marketing at a Fortune 500 company.  They discuss how they plan to start their own businesses or non-profits. 


3. Be open-minded: explore other industries.  Go beyond your comfort zone and sample something new. If you approach school stubbornly focused on private banking, step beyond familiar waters and learn something about micro-finance, private equity, community banking or municipal finance.  If you are preparing to concentrate in finance, do something daring and attend a panel on entrepreneurship, industrial management or international business.

Allow yourself a moment of serendipity--being lucky to have been in the right place in the right time because you dared to try something new.

 4. Get to know the companies that swarm the OP, that send dozens of representatives ready to discuss all aspects of their businesses, strategies, expansion and even recruiting. Get a sense of the companies' cultures, people, and management style. Decide whether these are places where you wish to start out (or perhaps invest in or do business with in the future).

At OP, there are many chances to confer with companies, banks, institutions, and other organizations--during receptions, at lunch, during dinner, in the lobby, or at panels. At OP, corporate representatives come yearning to start a relationship or have dialogue with a Consortium student or alumnus.


5.  Make connections beyond your school. Very quickly you will get to know all other Consortium students from your school. The meaningful, rich relationships with classmates will ignite and spark at the start.  Nonetheless, find time to connect with and meet other students and alumni from other schools.  If you are from Olin, Tepper, Darden or Johnson, steal away to meet those from McCombs, Ross, Tuck, Goizueta, or Stern.

Discuss shared experiences and backgrounds; talk about business-related dreams, and devise strategies for how you all will pursue ambitions.  You will have extended your network from the confines of your school to a national tie-in.  When you return to school, you should have campus connections and ongoing communications with students from campuses coast to coast.

6.  Don't ignore professors and staffers who take the time to attend OP. Sometimes they are overlooked, as students and alumni rush to make connections with corporate representatives or stumble to get to corporate-fair presentations from favorite institutions. 

Professors and staffers in attendance from all schools provide advice on how to approach required courses, how to plan a concentration, how to plan a semester abroad, and how to juggle academics while looking for a summer internship. And you get their attention and thoughtful commentary when they are not preoccupied with other campus chores.  There, too, is no rule that says a student or alumnus from Anderson or Stern cannot speak to an official from Yale, Tuck, Kelley, or Wisconsin.

7.  Take a moment to discover the city. Time won't permit you to do this in chunks, but force yourself to allot an hour or two here and there. Minneapolis will put on a happy, welcoming face and will be eager to share with you its cultural offerings and geographic wonders.  It wants you (and the Consortium) to return for business and personal purposes.

8.  Most of all, enjoy the moment. The OP has a celebratory air with many pats on the back,  inspiration from speakers, and encouragement from schools, older alumni, and corporate representatives. There is good reason for all participants to applaud each other. The new students, with their MBA acceptances at top schools and lucrative fellowships, have wrapped up a successful chapter one of the MBA experience and can't wait for the rest of the book to evolve.

Tracy Williams

See also

CFN: OP, 2011 and Consortium Alumni

CFN:  OP Through the Years (June 2010)

When Mentoring Relationships Falter

Something often plagues MBA students and many young professionals in finance. Why don't mentoring relationships always work as they were envisioned or designed? Why do mentoring relationships often get off to exciting, hopeful, ambitious starts, but flicker, whimper and die out? Why do they start with promise and then meander into nowhere?

Not all mentoring relationships, we know, falter.  Some thrive. Some lead to life-long relationships and friendships.  Some lead to opportunities, new jobs, promotions and even new careers, activities, and hobbies.  Note the themes of thriving relationships. They suggest something refreshing, new, opportunistic, and different.

But what about those that falter, the life of which oozes out and dwindles to nothing?

What happens when the eager first-year MBA student at Virginia, Emory or Berkeley links up with a principal at a private-equity firm. They meet, greet, exchange business cards and discuss respective backgrounds. They deduce they have much in common--shared backgrounds, shared acquaintances, and shared interests in finance.

There is an intersection, where they bond and which spawns "a relationship."  Because of the bond, the mentor offers an insider's list of suggestions for how the Emory MBA can pursue a career in private equity or venture capital. The mentor visualizes happily the student following in her path. The student expresses his good fortune; he has found the toolkit or treasurer's chest that can lead him to an associate position at Blackstone, Goldman Sachs, Jefferies, Citadel, Kleiner Perkins or Morgan Stanley.

They go their separate ways, exchange e-mail messages of gratitude, arrange a follow-up phone conference call, and then meet for coffee in New York weeks later. All of a sudden, the student detects diminished enthusiasm from the mentor. The mentor, distracted by other worries and pressing demands, is not attentive and even forgets some personal details about the student. The student stumbles, uncertain in how to respond, how to take advantage of the moment, how to push the relationship along, or how to seize the day.

Worse of all, the student hesitates afterward to reach out again to the mentor.  Or (in some cases) the mentor, noticing how unprepared or clumsy the student seemed to have been, is suddenly less interested in "grabbing a cup of coffee" the next time he is in New York.  

Dozens of reasons exist for why some relationships don't work. Time pressures loom large. Students, young professionals, and experienced leaders in the industry all have deadlines, immediate priorities, meetings to attend, and projects to complete.  The values and promises of a mentoring relationship suddenly appear too vague when the student has final exams and the mentor has a billion-dollar deal to execute. Inevitably, the relationship slips to a spot near the bottom of the priority list.

Other times, relationships falter because the student or young professional expects too much too quickly, having planned to exploit the relationship to achieve a concrete objective.  He pursues the relationship because he wants a job, a promotion, a raise, or a transition to a new group. When he realizes the relationship may not lead to quick benefits, no matter how engaged, connected or powerful the mentor is, he loses interest and eagerness. He is less likely to maintain touch, less likely to call or send the occasional e-mail greeting.

The relationship loses its buzz, its special bond, because specific objectives aren't being accomplished. These relationships falter because they are pegged too often to personal objectives.

The best relationships, experienced mentors say, are those where the relationship proceeds on a natural course. Both sides, because they are comfortable, share experiences, opinions, and histories. Both sides, because they are comfortable, offer constructive feedback and enjoy the give and take of fun, fruitful conversation. 

In finance, mentoring relationships continue to be critical--especially in certain industry segments. To get hired in or to advance in private equity, venture capital, hedge funds and boutique investment banking, relationships and ties to experienced people often count more than formal recruiting processes.

Some mentors, of course, are more active, more interested in the relationship, and more successful at it than others. The onus, however, continues to fall on the younger professional to launch the ties, to cultivate and to maintain them. Some mentors complain that students and entry-level professionals make it complex when they often approach them unprepared, always seeking quick solutions and answers.

Still, some mentors know relationships thrive, even when the student isn't always prepared when they meet, partly because the two understand the motives, interests, dreams and styles of each other. Many relationships indeed have concrete benefits, even if they are reached years later. A mentor can provide guidance to a student, who uses it years later as an associate making presentations to clients, handling the pressure of long work hours, or being promoted to Vice President.

CFN, over the past three years, has explored mentoring relationships in finance frequently. Based on experiences from mentors, students and entry-level professionals, the posts below share success stories and provide some guidelines on how to sustain relationships, how to keep conversations and sessions relevant, and vibrant, and how relationships eventually lead to wonderful benefits.

A few relationships will inevitably fall flat, but they don't always have to.

Tracy Williams


See also:

How Mentors Can Help MBA Students

How Mentors Are Invaluable in Recruiting 

Mentors:  Still Critical, Useful, Important

How Affinity Groups Help in Mentoring