THE MBA ADMISSION CONSULTANT

In 1976, Maxx Duffy, who was an Associate Director of Admissions at Harvard Business School at the time, left the school for personal reasons. Initially, she didn’t really think her “insider knowledge” was a big deal but a lot of her friends pressured her to help them get into the elite business school she had just departed. An extraordinarily large number of those she assisted were successful in being admitted. So, it wasn’t too long before she started billing for her services. At the outset, she distributed fliers to GMAT sites around Boston. By 1985 she had a vision and moved to LA to launch Maxx Associates, which many insiders consider to be the first “admissions consulting” firm specializing in top MBA programs.

Because many schools at that time forced applicants to sign statements that they had no assistance in preparing their application for admission, Duffy quietly stayed behind the scenes, never letting it be known that she was leveraging her “insider knowledge” to help aspiring individuals get admitted to the MBA programs of their choice.

The average cost for such help typically runs $5,000-$10,000 but almost all applicants to top MBA programs consider it a “drop in the bucket” when compared to the total cost of an MBA program (now estimated to be in the range of $300,000 once you include lost income over a couple of years.

What do you receive for this consulting fee? Some call it polish; some call it coaching and advice; and others call it repackaging. One applicant, who was laid off four times including one time while he was applying to Wharton, was planning on covering his dismissals with “I decided to change companies”. His admission consultant convinced him to change his whole essay approach to emphasize resilience and “lessons learned from failure”. He was admitted to Wharton with a scholarship to cover his tuition. Business schools have mixed reactions to the interaction between applicant and consultant. At one end is Stanford which informs every applicant that “you cross a line when any part of your application (excluding letters of reference) ceases to be exclusively yours in either thought or word”. At the other end are schools that accept on faith that applicants and MBA admission consultants are behaving ethically.

MBA admissions’ personnel frankly admit that on their own, essays rarely signify problems (there was an isolated case where two applicants submitted very similar essays and both were rejected). But because of the large number of applicants who utilize consultants, more and more emphasis is being placed on personal interviews and, in particular, admissions is looking closely to spot dramatic differences in the picture that emerges from interviews, recommendations, and the writing section of the GMAT.

I was curious about how our MBA students viewed admission consultants and so I brought the topic up in one of our classes. I phrased the question nonchalantly, “How many of you are familiar with MBA admission consultants?” About half the class raised their hands but no one had actually consulted one. Most B-schools view admission consultants as an inevitable part of the process. They probably should. Surveys have shown that consultants’ sites now rank third only behind school websites and Business Week rankings as an information source for MBA aspirants.

I decided to take admission consultants off my “immediate concerns” list and move it to my “watch” list.

WHAT IF WE RAN THE MBA PROGRAM LIKE THE REAL WORLD?

I was wondering the other day, what if we ran our MBA program according to how some events played out in the real world?

For example, you might recall that the Iowa Supreme Court recently considered the question of whether an employee who has not engaged in flirtatious conduct may be lawfully terminated from employment simply because the boss views the employee as an ‘irresistible’ attraction. The Iowa Supreme Court ruled yes. On that basis, wouldn’t we need an Irresistible Attraction Committee at the College of Business to decide which MBA students should be dismissed from the program?

You’ve no doubt seen the stories about online retailers varying prices based on a customer’s location. Customer #1 wants a Swingline stapler so she goes to the Staples.com website and sees that it’s listed for $15.79. Just a few miles away, customer #2 looks for the exact same item and it’s priced at $14.29. Most individuals are completely unaware that many websites take several factors into account before giving you their price, including: 1) your specific location; and 2) your distance from a rival brick-and-mortar store. So, for example, if you were within 20 miles of an Office Depot or OfficeMax, Staples.com would show you a discounted price. So, I guess our way of emulating that would be the next time you went online to register for an MBA class, your price would be a function of not only your physical location but also your proximity to another college/university offering a competitive MBA program.

There is a simple provision in the new fiscal cliff tax law that passed in January that reinstates the marriage penalty and essentially translates into higher tax rates for high income married couples than single individuals making the same amount of income. Some very happily married couples are getting a “Tax Divorce”. To simulate this same effect, we’d make textbook prices in the bookstore higher for married MBA students than for single MBA students.

Lastly, South Carolina offers a $50-per-couple tax credit for premarital counseling. A couple can claim an extra fifty dollars by completing a six-hour premarital course taught by "an active member of the clergy in the course of his or her service as clergy, or his or her designee who is trained and skilled." As long as that couple obtains a certificate of completion and a state marriage license in that tax year, the tax credit is theirs. Business faculty would offer a 6-hour pre-MBA counseling class and students could get a $50 reduction in their overall tuition by attending it.

I’m trying to decide which of the above would be the most popular….

POLITICS AND BAKED POTATOES: APPLYING TO THE MBA PROGRAM

We had an MBA social the other evening and one of the conversation topics was the amount of preparation required just to apply to our MBA program. One student remarked, “I thought it was just an extension of my undergraduate work – you know, fill out a quick application on Friday, enroll in a few classes on Monday, buy some books on Tuesday and after a few semesters of this, get awarded the MBA degree. Was I ever wrong!”

I had a professor who liked to always say, “The further you go in education, the more political it becomes.” At the time he was preaching this, I was an undergraduate student and had no idea what he was talking about. I was precisely like the student above – about as political as a baked potato. But I learned rather quickly that any graduate program typically has a precise set of rules, procedures, and required documents that must be submitted to be considered for admittance. I thought it might be useful to briefly review the process of applying to our MBA program and the rationale behind certain requirements.

STEP 1 is to complete and submit an online application at www.applytexas.org.

                Purpose: This essentially initiates the application process for you.

STEP 2 is to submit the following documents:

(1)    official transcript(s) from the Institution(s) where you earned your Bachelor’s degree and any Advanced degree(s) [if applicable]. These transcripts must be received directly from the degree granting institution(s);

(2)    official GMAT score report; and

(3)    official TOEFL score report if you graduated from a foreign university.

to:

UHD Office of Admissions-Graduate Admissions

One Main Street

Suite 325

Houston, TX  77002

STEP 3 is to submit three documents in .pdf file format to gradadmissions@uhd.edu.

(1)    Current resume reflecting a minimum of three (3) years of post-baccalaureate professional work experience.

Rationale: This experience requirement is important for several reasons. First, it turns out that the most important attribute to students in MBA programs is not the professors, not the perceived quality of the school, not the curriculum, but rather the quality of the students in the program. One of the key components of student quality is (you’ll never guess) – business experience. Second (and this goes along with the first reason), the MBA is an applied degree, i.e., while there is a theoretical foundation, maximum benefit accrues to someone with an experience base (i.e., management experience). And lastly, for those who think that the argument “No other MBA programs have experience requirements,” holds water, I would challenge you to find any quality MBA program without an experience requirement;

(2)    Two (2) letters of recommendation from professional (not academic) references.

Rationale: This is to further substantiate the “experience” factor;

(3)    Personal statement of 250 words or less about why you are pursuing an MBA degree (This is optional but recommended).

Rationale: To get a brief feel for your writing style as well as some insight into your motivational make-up.

When all of the above items have been received by UHD, your file moves from the Application Process to the Admission Consideration Process.  Your completed file is forwarded to the MBA Admissions Committee for full review and determination of eligibility. Decision regarding admission follows.

When my wife was proofreading this blog for me, she asked in her mock serious tone whether now that I was a Dean, did that mean I was a baked potato with sour cream, butter, bacon bits, and chives?

Some questions don’t even merit a response….

MOOCs: FUTURE OR FAD?

I was talking with a few of our MBA students last week and I was curious about their take on one of the latest emerging technologies in higher education – the MOOC – an acronym for Massive Open Online Courses. The theory is basically this – classes are put online and available to anyone in the world – no college credit but they are free. Many of our top universities in the U.S. offer MOOCs including Stanford, Duke, Berkeley, MIT, Harvard, Yale, and UCLA and hundreds of thousands of students worldwide have enrolled in MOOCs.

My first question(s) to the students were strategic in nature. What did they think of the MOOC concept, what was its potential, and what kind of threat(s) did it pose to higher education? They all thought MOOCs had lots of promise and offered at least a partial solution to some of the problems of higher education like rising costs and limited access to higher education. But they were quick to point out some of the glaring issues that MOOCs faced, namely: (1) an employer typically wants some type of proof that students have truly learned material; (2) students actually want to receive credit for courses they take; (3) colleges and universities would like to stay in business and keep making money; and (4) professors probably don’t want their jobs outsourced to computers. As for the long term threat, they were less in agreement about that but one student said “it’s hard to anticipate how new products/ideas will evolve in the market. Blockbuster certainly didn’t view Netflix as a threat with their initial business model. But the Netflix business model evolved and Blockbuster folded.”

My second question was whether they thought MOOCs were a possibility for MBA programs/courses. They all said no way – that MBA curricula didn’t really fit the MOOC model.

I then handed them each a description of the University of Virginia’s Darden School pioneering MOOC course entitled “Grow to Greatness: Smart Growth for Private Businesses” which begins January 28, 2013. It’s available worldwide at no cost to anyone with a computer and internet connection. The Darden School had nearly 20,000 sign-ups in the first 30 days after the MOOC was announced. This course just happens to parallel a course in the Darden MBA program focused solely on the challenges of growing existing entrepreneurial businesses. The MOOC also fits the Darden mission of educating both students and practitioners. Darden faculty believe they will reach thousands of students and small business owners all over the world who otherwise would not have the opportunity to come to Darden and learn and in so doing will help create jobs and have a positive impact in these students’ societies.

I love the look on students’ faces when you present them with an idea that is both logical and one they haven’t considered.

Isn’t that what learning is all about?

STEVE JOBS AND THE POST-PC ERA

Each semester we host several information sessions for our MBA program. The purpose of these sessions is to not only market our program but also to answer in real time various questions prospective students might have regarding the MBA program, give them a “feel” for certain aspects of the program, and introduce them to one or more of our MBA faculty. At our last session, there was something that caught my eye. Every attendee had a tablet or a PC but the tablets outnumbered PCs by almost a 2:1 margin. This was a significant change even from the previous semester and it got me to thinking about a larger issue – PCs and their future.

In marketing, there is a well-known concept called the Product Life Cycle (PLC). Essentially, the PLC defines several stages that all products pass through beginning with introduction and ending with decline. The decline stage is almost always brought about by the introduction of a replacement product. It doesn’t happen overnight but the older product gradually fades away as sales decline. There are, as you might imagine, many well publicized examples of product decline. The TV marked the decline of the radio, electronic word processors replaced typewriters, DVDs replaced VHS tapes and laserdiscs and are in the process themselves of being replaced by streaming video. The point being that it’s fairly easy to spot decline stages in retrospect. It’s a lot more difficult to identify them early because replacement products take a bit of time to catch on with consumers. Some products are initial hits but never get over the hurdle of widespread consumer acceptance. Take the Segway – looked extremely promising at introduction but never translated over to mainstream.

Here’s a question for you to consider. Are we currently witnessing the early signs of product decline for PCs? PC sales are going to be down in 2012 for the first time in over a decade. Intel and Dell stocks, closely tied to PC sales, are both down significantly in 2012. Apple, manufacturer of the world’s best-selling tablet (the potential replacement for PCs), was up 30% in 2012. The initial projection was that tablets would outsell PCs by perhaps 2016. That estimate has been revised. Several sources are predicting channel sales of tablets will top PC shipments in 2013.

In June 2010, Steve Jobs made what many consider the first reference to the onset of the decline stage for PCs when he said, “I think PCs are going to be like trucks. Less people will need them. And this transformation is going to make some people uneasy…. because the PC has taken us a long way… We like to talk about the post-PC era, but when it really starts to happen, it’s uncomfortable…”

Put PCs on your watch list.

STRATEGIC THINKING FOR THE MBA STUDENT

One of the topics we encourage with our MBA students is strategic thinking. To be a good strategic thinker, one must not only anticipate likely problems to be faced in the future, but also determine how best to position your business to take advantage of what you predict is likely to happen.

There are a number of interesting technology issues on the horizon that will get confronted in the next 2-5 years. If you want to test your strategic thinking capability, decide where you think the technology issue below is headed. Then think about the impact it will have on your current organization and the possible positioning you might recommend to your company to leverage where you think things are headed.

The issue is privacy. At one end of the spectrum are consumers who are struggling to protect their online privacy and personal data. At the other end are companies whose business it is to collect data about consumers and track their online behavior in order to sell them things directly or sell their names to companies who will turn around and sell them something. Currently, rules for monitoring online behavior are only loosely defined. Expect some significant revisions in the antiquated Electronic Communications Privacy Act of 1986 as well as additional privacy legislation that addresses how internet data can be collected and/or sold. The strategic thinking exercise is what that legislation will look like.

A good example of how things can change overnight is the Driver’s Privacy Protection Act of 1994 (commonly referred to as DPPA). Prior to this legislation, consumers had to “opt-out” to prevent their personal data from being accessed by marketers. Typically, less than 2% “opted-out” meaning that consumer data was generally available to anyone who wanted it on everyone who owned a motor vehicle in the U.S. After passage of DPPA, consumers had to “opt-in” for their information to be accessed. Guess what? Less than 1% opted-in and practically overnight, easy access to information gathered by state DMVs was eliminated.

Here’s another privacy related question: how would you feel about losing a juicy contract or promising job based upon something you posted on Facebook or information obtained by “Googling” your name? Think that’s a stretch? Don’t kid yourself. A study just conducted of college admissions officers indicated nearly one-third checked Facebook and Google as part of their applicant review process and 35% of those doing so found material that negatively impacted how they viewed the student!

By the way, once you figure out privacy, there are a few others technology issues on the horizon as well: piracy, cybersecurity, and STEM education. But that’s another day….

TWINKIE

All the news about Hostess these past few days reminded me of a close friend who purchased a dog for his daughter when she had just turned 4 years old. He told me as he drove home with the puppy that he was thinking of naming the tiny white Bichon Frise Fluffy or maybe Snowy. His wife preferred the names Casper or Snowflake. But when he walked in with the puppy under his arm, his daughter immediately ran to him jumping up and down shouting, “Can I hold Twinkie?” According to him, no other name stood a chance after that.

So when I read that the last ditch mediation session ordered by U. S. Bankruptcy Judge Robert Drain for Hostess and its Bakers’ Union had failed, that liquidation for Hostess might be imminent, and Twinkies might be history I had a brief, reflective moment about Hostess Brands the company, Twinkie, my friend’s daughter’s dog, and what it all might mean.

Well, to start with it was going to mean a high likelihood that 18,000+ Hostess jobs were going to be lost. Unfortunately, even though Hostess had $2 billion in revenues, it was suffocated with $1 billion in debt.  Hostess was also saddled with anachronistic pensions, manufacturing facilities that were significantly outdated, and a highly distrustful workforce. I remember reading this summer that Hostess had announced that without an agreement from both its major unions, The Teamsters and Bakers’ Union, it would be forced to cease operations. I wondered at the time if they were posturing or whether it was a real threat. The Teamsters did agree to meaningful wage cuts (nearly $200 million) but the bakers decided to fight. Thus, the showdown developed. It also likely means that most of the cash that’s been pumped into Hostess over the past couple of years from the outside (like $130 million) is “down the drain” (no pun intended on the Bankruptcy judge).

What are the major lessons we can learn from Hostess shutdown? Well, first and foremost, bluffing has its risks. The Bakers’ Union undoubtedly thought that Hostess wouldn’t take the drastic steps of bankruptcy and subsequent liquidation as Hostess management had backed down from the bankruptcy threat late in the summer. At the same time, Hostess management probably felt that since The Teamsters had agreed to a restructured deal, the Bakers’ Union would be close behind. Both were wrong. Second, my best guess is that the Twinkie brand will somehow survive. After all, they produced like 500 million of them last year (how many of you would have guessed that number??). Twinkies will probably look exactly the same even though someone besides Hostess is making them.

So where does that leave my friend’s daughter’s dog? Well, Twinkie passed away a few years ago but I am told he was a great family pet. Of course, this wouldn’t have been nearly as good a story if my friend’s daughter had run up and shouted, “Can I hold Ding-Dong?”