Saturday, May 12, 2012

Money Over Everything?

In the last few weeks at least half a dozen threads have popped up on the MBA forums with different variations of the same theme.  School X vs School Y.  Having been in this predicament myself I find myself drawn to these threads.  They are particularly interesting when School X is ranked higher than School Y, but School Y is offering money while School X is offering less or none. These threads inevitably come down to the "age old" question of rank vs. money.

"Pedigree Matters..."
"...And don't believe anyone who tells you it doesn't."  A professor at a top 5 business school said this to me and a classroom full of prospective students during a mock class last fall.  He told us that lower ranked schools would try to lure us with lucrative scholarships, but that we should not allow money to be the deciding factor in choosing a business school.  "Go to the best school you can get into." That's what he was really telling us. I've seen that mantra repeated over and over again on many admissions consultants websites.  I tend to agree with them.  The second I decided that the MBA was the right route for me I knew I would only consider top 15 programs.  If I couldn't get in then I just wouldn't do the MBA.  Extreme?  Maybe, but I knew that certain opportunities would only be open to me if I went to an "elite" school.

With that being said, I have noticed that even amongst the elite there are stratified tiers.  Some say the zenith is HBS/Stanford/Wharton.  However, others would say that the H/S/W tier really only exists for Wharton.  HBS and Stanford view themselves in a league of their own.  Then there's endless debate about whether Booth, Kellogg, and MIT make up their own cluster right under H/S/W or if B/K/Sloan/CBS/Tuck are all peers.  There are some who say Wharton is its own tier and there are others who say B/K/W are interchangeable.  Things get even murkier when determining which schools make up the Top 10*.
"Is Stern #10 or has Yale edged it out of that spot?"
"Why is Haas ranked so high?"
"Does Tuck belong in the M7?"
I have seen variations of all these debates and after a while it all becomes one big pissing contest.  Is there a difference between the #15 school and the Top 5?  Yes, I would say there are tangible differences.  It shows in the educational and professional backgrounds of the students as well as in the caliber of companies that recruit.  However, distinguishing who is #3 and who is #5 comes down to a matter of preference instead of clear advantages.  Regardless, within the top 15 there is definitely a level of prestige and opportunity that you will not find in lower ranked schools.

Even with the jockeying for position within the top 15, there is a very clear consensus about which schools belong in it.  So what happens when a person gets into Ross with a significant scholarship and Kellogg with little to nothing?  While Kellogg is agreed to be the more prestigious program is that prestige worth $100K more in debt?  The dirty little secret that a lot of schools at the top of the heap hate to acknowledge is that 80% of the time end game from school #4 is no different than the end game at school #14.  If you are interested in the traditional MBA career paths, especially brand management and consulting you can just as easily get hired by P&G or Deloitte from Ross as you can from Kellogg.  When schools also have similar cultures the money can be the great equalizer.  I can understand taking the money, but I also understand leaving it. 

The equation becomes even more convoluted within the top 5.  I completely understand why Harvard is Harvard and Stanford is Stanford.  It is difficult for any amount of money to pull an applicant away from either of these schools.  However, I am not sure that either truly offers a vast array of immediate post MBA opportunities that are not available to Wharton or Kellogg grads.  I will give the clear advantage to HBS for the network and the name.  HBS alums are EVERYWHERE and no matter how long ago you graduated the Harvard branding sticks.  But other than that I don't think a person who does choose the money at another top 5 school is losing anything else but debt.  That's the conclusion I came to with Wharton.  I will readily admit that the Wharton name has a slight edge over Booth and Kellogg.  However, from a recruiting standpoint they are all the same.  Wharton, Booth, and Kellogg (HBS and Stanny too) all send people to McKinsey, General Mills, Blackrock, and other top companies across all industries.  Yes, Wharton is the most recognized name out of the three schools I chose between.  However, recognizable does not necessarily mean better.  Wharton's like old money while Booth is like new money.  You don't need to know about Standard Oil Company to know that the name Rockefeller means money.  And you might not know the name Brin, but that doesn't negate the fact that he's richer than any Rockefeller.  Whether they've been one for over a century (Wharton) or they fell into the money this decade (Booth), a billionaire is a billionaire.  Who cares if Joe Schmoe doesn't know about it?  Some people do care.  When we're talking $100K vs. $50K I damn sure do not.
 
"Your MBA is What You Make It..."
This is also very true.  There are people who squandered opportunities at "elite" business schools and others who have opened their own doors from lower ranked schools.  I have seen it happen with people that I know.  However, I would not take isolated cases and extrapolate that school #40 is comparable to school #4. 

Right after I was admitted to Kellogg an associate who I had not spoken to in nearly a year called me. He tends to contact me a couple times a year to put out job feelers at my company.  When I told him that I was admitted to Kellogg and would be leaving the company in a few months he asked if I had applied to the school where he did his MBA (Top 30ish program).  When I told him that I wasn't planning to apply there he asked me why.  I responded that 1) I did not want to live in the school's location and 2) I was already in at a much higher ranked program that I far preferred.  His replied, "Yeah, but why pay all that money when you could go to (name of his school) for free.  I did."  I found his suggestion ironic and laughable.  He was suggesting that I NOT go to a widely known top 5 business school in favor of his school yet he was underemployed in a job most companies don't even recruit undergrads to do and coming to me, not his school's network, for job leads.  Not exactly the most compelling example.  Alas he isn't the only person I know who attended a 2nd or 3rd tier MBA program for free who found themselves not only debt free but job free (maybe job lite) as well.  No matter how hard they tried to break into new fields, the opportunities just were not present and you can't spin straw into gold.

I am not saying that 2nd tier MBA programs set people up for unemployment.  But I do think that expectations should be greatly tempered.  Many of these schools' employment strengths are in a limited geographic area with a handful of companies.  Even when the "sexy" companies do recruit from these schools they are often not recruiting for the "sexy" jobs.  Although you want to do strategy consulting, investment banking, or marketing the opportunities may only be in operations or support roles.  I found this when I recruited with my current employer out of undergrad.  I was so sure I was going to be a marketer and marketing for a major CPG company would be totally cool.  However, when I went to my company's booth at the career fair they told me in no uncertain terms that they were only there to recruit for the sales management program.  Marketing had its own recruiting team and the two did not overlap.  The recruiters also put the kibosh on coming into sales then moving over to marketing in a year or two.  Just like kids get tracked in elementary school, adults get tracked in the job market and once you're hired for one track you're more likely to hit a half court shot than to jump to a more prestigious track.  Has it been done?  Sure it has, but it doesn't happen often.  It's the exception, not the rule.  In the book "He's Just Not that Into You" the authors advise women to not think of themselves as the exception.  When a man doesn't call, doesn't ask them out, doesn't commit it's because the guy is just not that into them.  That's the rule.  Occasionally there are exceptions, but it is better to live as though you are the rule to prevent undue heartbreak.  I think the same advice applies to business schools.  Could a 2nd Tier MBA get you to the same place that a top 15/20 school would?  On occasion, but generally speaking, probably not.  If there is a choice between the two then why not go for the option that offers the most options and puts you in the best position to accomplish your goals?

I have seen some applicants cast a very wide net when applying to schools, even applying to safeties for their safeties.  The dust settles and some of them have multiple offers from disparate schools.  Yes, there are many really good schools outside of the top 10/15.  And if it came down to a choice between Top 25 with money and bottom of the top 15 with no money then I can see the conundrum.  However, not even a full ride plus stipend can make a top 50 school comparable to a top 15 or even 20.  It just doesn't compute.  To me, this is a clear case of "Go to the best school you can get into." The education pays for itself not just in terms of starting salaries but also in the caliber of classmates and ease of landing the job you couldn't get without the MBA.

"This or that..."
Ultimately I think it comes down to a person's priorities.  Pedigree is great, but the massive debt that often accompanies it sucks big hairy moose balls.  It scares the shiznit out of me.  Within the top tier I think that there can be tradeoffs.  Sometimes a extra smattering of sparkle dust isn't worth an additional $50K.  However, to believe that the sparkle dust is never worth more would be foolish.  The bigger the goals the more valuable it becomes.  Basically it's a gamble on yourself and the strength of that school's MBA.  Sure taking the money provides freedom, but freedom doesn't always equate to opportunity. 

*The above questions are not necessarily my personal opinions but rather different questions I have heard raised in the debate over which school ranks where and why.

14 comments:

Bundled said...

Congrats. Coming from a top 20 Bschool myself, I can tell you how much schools want to promote women. Add a race advantage?? Its unbeatable. Ironic how some people need GMAT coaching and instructors, and others get 750s unaided and guess who's the one to get accepted.
But as they say, the world is unfair. And so here goes my congratulations. Enjoy your Bschool journey. There are some others who long for it more.

Anonymous said...

Why don't you think Haas should be ranked so high?

LadyRoadWarrior said...

Bundled,
I'm sorry, but your comment is offensive. Your implication that all accepted women and/or minorities are somehow less is both incorrect and rude. GMAT isn't the only indicator of ability to succeed in bschool and/or contribution to a class. Please leave your sour grapes at the door.

mbalady said...

"Sure taking the money provides freedom, but freedom doesn't always equate to opportunity." - Nail, meet head! Love this.

This realization is basically what made me comfortable with leaving money on the table. Very well written post. I think if one's goals can equally be reached at a school offering money - especially when both schools have a similar culture, it may be best to take that route. I however agree in that especially for folks with huge and/or unorthodox goals, the school that provides the best opportunities is worth it, regardless of the cost(worth not being based on a purely financial measure.)

In my opinion - Debt sucks yes. Limiting your ability to achieve your goals, limiting your level of impact on society and limiting your opportunity for self-actualization sucks even more.

maximus said...

@LRW

You find the first post offensive? What about the way you, cheetarah and 2 other girls were gloating around, hogging all the bandwidth on the GC Booth chat on the day of the decisions. Insensitive.

People like you just hide behind the facade of perceived ultra-special contribution and a
"women's" perspective that they believe they can make at B-school. If this was actually true, why don't companies offer this special treatment when it comes to jobs? Surely they could use your 'perspective'. Ironical how some women can cry hoarse for equal standing with men AND still justify any special entitlements that benefit only them.

LadyRoadWarrior said...

Maximus -
Being supportive of fellow applicants is always something I will choose to do. If you search my posts you will see many supportive comments directed for men and women.
As for my own candidacy - I'm pretty sure I would have been admitted to Booth regardless of gender.
Sour grapes, like I said

Anonymous said...

Hi Cheetarah1980 - Hope you are doing well! I came across your blog from Gmat Club. It's been not only very helpful but also quite inspirational! I have been trying to get in touch with you but have not been able to do so. Would you please be so kind as to let me know your email address so I can reach out to you offline? I have some questions regarding the application to Kellogg. Thank you for your time in advance!

maximus said...

@LRW

Kudos on not answering my questions. -- "If this was actually true, why don't companies offer this special treatment when it comes to jobs? Surely they could use your 'perspective'."

IF the criteria is "the whimsy in my personality" as one of your 'gal pals' gloated on GC Chat, it is surely no surprise that 20% of class at these Bschools end up jobless.

xg said...

Cheetarah and LRW have both helped me out in private through GC. They are wonderful ladies.

I'm not sure why some people are being douches on her blog, it sounds like someone is bitter...

Cheetarah1980 said...

In all of the years I've maintained this blog I have never once commented on any of my posts. I like to leave this section open to whatever commentary may come (positive, negative, neutral). But after reading some of the comments I feel like I have to clarify some things.

maximus, to answer your earlier question, yes many companies do see the value in making sure women are represented in management across functions. My company has women's mentoring circles, a women's network, and other channels to make sure women employees have the opportunity and means to succeed. What many companies realize is that many of these formalized initiatives for women already exist (and have historically existed)for men informally. Have you never heard of the "good old boys" club. It is alive and well and difficult to penetrate. This isn't an overt hostility, just human nature to cluster in like groups. When I see all of the male senior leadership in my office jetting off to the Super Bowl together, while the women in those same positions are not invited I am reminded of the need for concerted efforts to get women connected to opportunities. Remember, a lot of business happens AWAY from the office. So I hope that answers your first question about whether or not companies offer "special treatment." Yes, they do. And the women who have benefited from this treatment have delivered outstanding results so companies continue to do so. Please also remember that women have unique challenges in the workforce given that many of us often choose to excuse ourselves for long periods of time for family concerns, often during the prime years for advancement.

As for me, LRW, and other women "gloating around, hogging all the bandwith on the GC Booth chat on the day of the decisions," I think that's some revisionist history. 1st, LadyRoadWarrior, me, and a couple of other women applicants are regular chatters. There is a group of GC members (male, female, white, black, Indian, Vietnamese, etc) who chat daily. What you came in on was our regular routine. On decision days for one of our schools we all band together in support. Just so happened that the girls were the only regulars waiting for Booth decisions, hence any #teamgirls talk. 2nd, there was NO gloating that day because none of us got our calls until after 5pm EST, when chat had died down. The entire day we were waiting with everyone else, offering encouragement, calming words, and joking around. And yes we talked about our application credentials, mostly in jest. I said that they would admit me because one of the pics in my power point showed a bit of cleavage. Do you honestly think any of us were being literal in these types of statements? Honestly, maybe a bit of whimsy in the application essays did attract the adcom's attention after hundreds of routine applications. That doesn't mean any of us believe that's the only thing driving us in. You are talking about a group of women who all have 700+ GMAT scores, work in management positions at blue chip firms, and all worked really hard (just as hard as you and others) on our applications, which is what made Bundled's comment so offensive. Did we feel as though we "deserved" to get in? Yes, as I'm sure any applicant does when they apply. Did we think we were entitled to be admitted? No. I don't know what gloating you saw. There were no "I got in, you didn't...na na na na na na" comments. We joked around with each other to lighten the stressful mood. If you somehow found that to be insensitive, given that we were in the same position of WAITING as everyone else, then I don't know what to tell you.

mpg2011 said...

Wow, after reading a brilliant post I come here to see this negativity?

Are you kidding that the girls at GC were gloating about getting in? I got an anxiety-scale named after me for being SO insecure during this whole process.

Anyways, great post cheet. One should just re-read your blog to notice how WORTHY you are of being admitted to top MBA programs. Humble, insightful, smart, an excellent writer.

It'll be an honor to go to B-school with you!

Anonymous said...

Hi Cheetarah! Trying to reach out to you again; need to connect with you offline (via email); staying anonymous as I've not shared my MBA plans with my current employer, so trying to avoid coming up in the web searches {Yes, your blog is popular :)}. If you can post your email address in the comments here, I would greatly appreciate it - will check back again in a couple of hours. You can remove it later if you don't want to keep it there forever. Thanks for your time and help in advance!

The Arsonist said...

There has been a heated debate going on here and the topic of the blog post is interesting.

Pedigree matters, no question about that. You have mentioned an uncomfortable truth - Top 15 MBA >> Rest. However it is very easy to spoil the advantage offered by a Top Tier Degree. If for some reason a person fails to get into his target job post MBA in the 2-3 years span, the value of MBA decreases very sharply. One should really ensure to make the most of MBA and not slack off like one does in undergrad.

MBAGirl said...

This goes to Bundled and his like-minded peers. I have spend 3 years on GMATClub (and it its chat) as an anxious applicant, an observer, a friend, an administrator, and a mentor. It taught me a lot, so here are a few nuggets of wisdom from that experience:

1. The chat has the benefit of being a blank slate for most relationships that develop there. (You don't see anyone's background, location, attractiveness, even gender, unless they reveal it explicitly). Many people came to the chat to vent, get the latest gossip about their program and brag about their lifestyle. However, in that environment you get as much as you put in. The few people that did well in their outcomes had a common trait - they also chose to get to know the people around them. 98% had no idea who they were venting to. The 780 GMAT guy from an investment bank who didn't get an interview kept spreading his asian race as the reason for his failure, and how black candidates have it easy, while the person he was talking to was a black immigrant (which he didn't know about his venting target) from an African country who had worked his way up to a top 3 Ivy school from nothing and was second in command at managing a professional sports team , a position he held at 1/4 of the pay of the IB guy who was complaining. IB guy remained bitter and racially predjudiced and didn't make it far; his listener had developed deep relationships with several others who had better strength of character and listening skills. Ironically all of his trusted chat companions ended up in the top 5 programs (half were female). Which leads to point #2.

2. BSchool decisions and the waiting period that precedes them strip most applicants psychologically naked. They separated the men from the money/status/insecurities obsessed whiny boys and it uncovered a tremendous universally solid strength in female applicants. Among the hundreds of applicants I met there, about a dozen each year remained as regulars, among those a third were female and every single female applicant remained strong, constructive and collaborative with others even at the worst of times. For the guys, I would say the split was 50/50. Those are the people that will lead the companies of tomorrow. Not because of gender, but because of their character and understanding of their peers when it counts.

Funny how you see what matters most when you don't get to see one's face/gender/race/status/past in an obvious manner.