Part I, we raised the idea of these firms could go so far as to create their own admissions offices, which would screen applicants in much the same way that MBA admissions officers do today. Why let these young superstars spend two years out of the workforce?Last week we introduced our idea for how traditional hiring firms at top business schools could upend the whole system and recruit those high-potential young professionals directly. In
In that piece, we discussed some of the pros and cons for the hiring companies. Today we look at pros and cons for the other big constituency that would need to buy into this idea: Those young professionals who normally apply to the world’s top MBA programs two to five years after graduating from college.
We’ll start with a big, obvious con, which is actually several disadvantages all rolled into one: For someone who can get into Harvard/Stanford/Wharton, etc., skipping an MBA to go directly to their “post-MBA job” will mean missing out on all the benefits that attending such a school can give a young grad. These include the network that they gain from attending such a school, the brand-name reputation benefits that they get from having such a school on their CVs, and (of course) the enriching academic experience that they gain from the classroom.
These are all certainly benefits that they would miss out on by not attending business school, but we’d argue that at least the first two would largely be rendered moot. After all, if someone could directly go from their first post-college job into a new associate program at McKinsey, they would immediately be plugged into a very strong professional network that rivals one that any top business school can offer. Yes, these new hired would individually know fewer people than would someone who attended a large MBA program and worked ta McKinsey, but a person’s network quality is what ultimately matters, not its size. Yes, each person’s network would like be less diverse than it otherwise would be (in the McKinsey example, each person would know a lot of consultants, but not many brand managers, bankers, biotech executives, or non-profit leaders), but this is the only downside we can see.
In terms of brand-name aura, we again don’t see a large tradeoff here. If someone can land a job directly with McKinsey (we’ll just keep using that as our example firm, since they’re usually one of the biggest hiring firms at top U.S. business schools), they instantly have the bluest of blue-chip firms on their resume. They will lose the benefit of having “Harvard” or “Stanford” on their resumes (assuming they haven’t already attended one of those universities), but they will still have a terrific name to show off in their professional history.
So what about the academic experience? Are we here to suggest that those two years spent in the business school classroom aren’t worth $100,000? We’re not here to bash MBA programs or turn this into a stump speech about soaring costs. However, that’s a healthy chunk of change, and if an applicant can get several months of classroom training from McKinsey plus a couple of years of ongoing training (as we described in Part I), and not have to pay $100K to do it… Well, that’s a tradeoff that we suspect a lot of smart potential applicants would make.
One disadvantage that we haven’t figured out how to overcome is that this proposal is necessarily narrow, at least to start. Launching a credible, successful alternative to business school would take the commitment and resources that only the largest firms could muster. So, this could be an interesting alternative for someone who’s only considering business school as a path into a banking or a management consulting career, but for someone who wants to go into a smaller field (“smaller” here meaning that fewer industry jobs are handed out at top schools), they will likely still need to go to business school to gain access to some rarer career options that are only open to newly minted MBAs. An example would biotech: Biotech firms hire a lot of MBA grads into marketing and product management jobs each year, but they don’t do enough hiring that piloting such a “Replace the MBA!” program would be worth it. Those students are still better going the traditional business school route to pursue those opportunities, at least to start. If such an idea caught on with blue-chip banks and consulting firms, it’s conceivable that it could “trickle down” to firms that do less MBA hiring.
The biggest advantages for would-be MBA are the cost savings and not having to exit the workforce for two years. Neither of thee is a trivial point. The tuition alone at HBS now costs more than $50,000 per year, and Harvard’s own estimate for a single student’s total cost over two years is nearly $170,000 (going by the school’s one-year estimate for the Class of 2013). Yes, a brand-name MBA is worth a lot, but what if you could save six figures and skip right ahead to the job you want to land after business school? Add in the opportunity cost of being out of the workforce for two years (most U.S. programs take two years), and the cost-benefit advantages of an “apply directly to McKinsey” model start to become very, very compelling.
So where does this leave us? Should top hiring firms disintermediate MBA programs and go directly to the source to find the mid-twenty-somethings who will be their next wave of hires? It’s certainly compelling enough that we’d like to see a firm try it. We have no idea what caliber of applicants this would attract — certainly a firm like McKinsey would have no trouble attracting a lot of applicants, but would the caliber of those young professionals approach that of the grads McKinsey can find at the nation’s top MBA programs? There’s only one way to know for sure.
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