he was quoted in TechCrunch saying that an Ivy League degree shouldn’t necessarily be the aim for all of our nation’s best and brightest high school students. What those students get from such a degree isn’t necessarily what every one of them needs, and Thiel has proposed an alternate path that may be better suited to the nest Bill Gates or Steve Jobs coming up through today’s high schools.With higher-education costs continuing to climb as fast as a barrel of crude oil, some have rightly begun to question how much a college education is worth. Just this past week Peter Thiel of PayPal fame made waves when
This reminded us of an idea that has been discussed around Veritas Prep HQ before. What if blue-chip firms such as McKinsey and Goldman Sachs opened their own admissions departments, admitted a select number of young men and women into their associate programs each year? What if those young professionals could skip MBA programs entirely, and jump right into the jobs that they hope to get after two years of business school? Why not just cut business schools out of the equation and go get the talent directly?
Today, let’s think about the pros and cons for those hiring firms, starting with the cons. One obvious disadvantage of such a system is that much more work would fall to the hiring companies. Right now they benefit from a “one-stop shopping model” where they can assess and hire dozens of associates at each of the nation’s top business schools. Visit the top eight or ten schools, and voila… They have as many new associates as they need. In the new model, they would have to evaluate thousands of applicants to narrow down the pool to the 200 or so they want to hire. In other words, they would stop outsourcing this function to top MBA programs’ admissions offices.
Another con is that these new hires would come without the raw skills that MBA students pick up in the classroom. However, something that new MBA hires frequently hear from their new employers is, “That’s nice that you learned all of those book smarts. Now we’ll teach you what you really need to know to do well in this job.” There is a widely held belief that, while the lessons that MBA students pick up in the classroom are certainly valuable, they usually only represent a raw toolkit that won’t become truly valuable without more experience. Why not replace these two years of “book smarts” teaching with a three-month bootcamp of basic business skills, augmented by additional ongoing training? That way, new hires can learn things in context on the job, not simply in the abstract, only to be forgotten later. These firms already have very large and capable training departments; taking on such a responsibility would not be too difficult.
For hiring firms, one advantage of taking on this additional logistical work is that they should be hire exactly the people they want. One common rebuttal we here from blue-chip firms, when asked why they don’t have more women or minorities in their executive ranks, is that they can’t find enough highly qualified women or minorities at their recruiting schools. In this case they could cut out the middleman and hire exactly the young professionals they want to hire. They could even partner with groups such as the Forté Foundation, Management Leadership for Tomorrow, and The Consortium to help find high-potential recruits, although relying entirely on these groups would hardly be different than relying on MBA programs to find talent, and ultimately the hiring firms should cast a wide net to ensure they’re hiring from a large enough talent pool.
Another advantage is similar to what’s drove Harvard to launch the HBS 2+2 Program: By “going upstream” and pursuing these talented young men and women directly, hiring firms will be able to grab talent before their competition. Why wait for these young professionals to pass through Harvard or Wharton and then compete fiercely with other firms for those students’ attention? Why not encourage them to apply earlier, so that those other firms never have a chance to lure them away? In much the same way that HBS is able to attract high-potential college grads to its 2+2 Program before Stanford GSB (or even Harvard Law School) can get to them, McKinsey could get its pick of the nation’s bets young professionals before Bain or BCG ever knew they existed.
You may ask, “Isn’t this sort of what these firms already do? They hire college grads directly and let them serve as junior associates for a couple of years.” Yes, they do, but, with some exceptions, they hire those young grads with exactly that expectation — that they’ll only be there for a couple of years. And, although those firms go to top-ranked universities and put those college seniors through the ringer in the interview process, they still don’t know how well those kids (they really are still kids, after all) will perform in the working world until they’ve actually worked for a while, in a variety of situations. In this case, they’re evaluating young professionals’ track records in the working world, complete with recommendations from their direct supervisors. That’s exactly what MBA admissions officers do, and it’s a word apart from giving a brain teaser to a 21-year-old econ major at Princeton who’s yet to make a presentation to senior management.
One obvious question is this: If a McKinsey or Bain or Goldman Sachs decided to try this, who exactly at the firm would do it? Would this be one more responsibility to fall to overworked engagement managers or vice presidents? We propose that these firms would actually open up their own admissions offices. Why not hire Dee Leopold when she’s ready to step away from her role as director of admissions at HBS, let her build a team from scratch, and start touring the country in search of the firm’s next 100 great hires? They could make the admissions criteria whatever they wanted them to be, but they could start with: a GMAT or GRE score, at least two year’s of work experience, two letters of recommendation, a personal statement, and a short recorded video presentation. Those who make the first cut would then be interviewed in person.
Sounds a lot like a modern MBA admissions process, doesn’t it? Why shouldn’t hiring firms do this directly? Tell us what you think!
Next week we’ll dig into Part II, which looks at the pros and cons from a potential MBA student’s standpoint. In the meantime, if you want to read more bold ideas, be sure to find us on Facebook and follow us on Twitter!
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