February 3, 2017Closing The Relative Income Gap

A recent study of Federal Reserve data by the advocacy group Young Invincibles, reveals the extent to which Millennials are falling behind previous generations: Median income is 20% less than their Baby Boomer parents at the same stage of life and they have accumulated half as much in assets, this despite the fact that they are better educated. Much has been made of this generational phenomenon as well as the implications for asset purchases, household formations, and economic growth that will be felt for years to come.

The math surrounding wealth accumulation is predicated on a few simple data points – the size of your initial savings or investment account, the amount and frequency of your contributions, and the number of years and rate of its compounding. All else being equal, if you start with a smaller balance and/or delay the start and frequency of your contributions, you will end up with fewer total assets over time. What’s more, the lingering wage effects of starting in a weak economic environment may persist even after economic growth resumes. Over the course of a 30 or 40-year career, these differences can prove to be quite sizeable. Unfortunately, this is what Millennials are facing. And yet, nowhere in economics is there a principal that promises ever-higher wealth to successive generations.

It’s true that Millennials are the first generation since the Great Depression to endure such an extended period of economic uncertainty. But, setting aside for a moment the timing of their arrival into the workforce, every generation has faced a marketplace that differs from the previous one simply due to the dynamic nature of our economy. For example, few of today’s jobs are dependent upon pure brute strength that dominated much of the twentieth century, thanks in large part to advances in robotics and machinery. Today’s value creators are more likely to spend the day flexing their patents, not their muscles, especially in fields like programing, engineering, science and physics.

Regardless of a generation’s fortunes, the key to success has always been having the skills that employers demand. For some, choosing a profession is simply a matter of following one’s passion; for others, passion comes from doing something well. Regardless of your journey, you’ll want to have skills that provide the best prospects for personal satisfaction as well as financial reward. One way to obtain those skills is with additional education. Study after study has shown that earnings increase with successive levels of educational attainment; historically, those with a Master’s degree or Professional degree have received the highest earnings.

A Masters in Business Administration (MBA) continues to be one of the most versatile graduate degrees. The key to its popularity is the enterprise-wide knowledge that prepares its holders for success in any business function, at any time in their career. Moreover, as the economy changes and new business models emerge, the degree is no less valuable. There are many factors besides the economic cycle that determine earnings potential, however, for business professionals, there’s little doubt regarding the returns from having an MBA.

The jury is still out regarding Millennial fortunes but I would not want to bet against their potential. The one thing we already know for sure is their ability to enjoy life regardless of their relative financial status. Cheers!

Categories: MBA

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January 18, 2017The Retooling Of An American Craftsman

The recent announcement that Sears was selling its Craftsman tools brand to Stanley Black & Decker for $900 million was just the latest reminder of the slow demise of this once iconic American company whose history dates back to the late 1880s. With its reputation for quality, durability and lifetime guarantee, no other retailer in the last century has had a bigger hand in building America. Yet, for all its success Sears was unable to build a beachfront capable of withstanding the ebb and flow of free market capitalism.

In the hands of its new owner, Craftsman will join two other iconic brands, and presumably return to its preeminent position among tool manufacturers. Countless weekend warriors – count me among them – will no doubt cheer the news and look forward to filling those red & black toolboxes with the latest gadgets.

News of the sale was accompanied by plans to close 26 stores on top of the 16 closures announced on December 27. Sears wasn’t the only storied retailer to report closings. That same week Macy’s announced plans to close 68 stores, Kmart said it will close 78 stores and The Limited said it plans to shut all of its nearly 250 stores. News of trouble among brick and mortar retailers is not new or even surprising; the seeds of their demise were set some time ago with the emergence of online retailing and big box competitors.

Over the years, retailers have had more than their fair share of misplaced hammer strikes but not all of them have been self-inflicted. Though Sears’ long-term viability is questionable, its enviable record of creating value for its shareholders is not. This mighty conglomerate boasts of creating some of the most successful brands in corporate history: Allstate, Craftsman, DieHard, Discover Card, and Kenmore.

For a over a century, legions of Sears devotees anxiously awaited the publishing of the latest Sears, Roebuck & Co. catalog, much like today’s Millennials await the unveiling of the latest smart phone. The catalog, which ceased publication in 1993, contained thousands of items including apparel, sewing machines, appliances, televisions, power tools, even a kit to build an entire home. Its pages were filled with celebrities and fashion models that for generations would both mirror and set the standard for what filled American households.

Not content to rest on its laurels, Sears acquired Dean Witter Reynolds and Coldwell Banker in the early 1980s and, together with Allstate, became a major player in the burgeoning financial services industry. Over the years, management demonstrated a masterful skill for anticipating new market opportunities.

But the Craftsman sale and store closings are a stark reminder that capitalism harbors no nostalgia for the past. As the arbitrator between winners and losers in a market-based economy, capitalism is often criticized for its coldhearted, indifferent and unemotional execution. But that is precisely why it functions so well. Its renderings are based on economic returns, which lie at the center of what makes the US economy the envy of the world. Emotions play a big part in driving individual decisions and behaviors, but capitalism itself is governed by the collective wisdom of the masses.

Confidence in a market system doesn’t diminish the need to acknowledge the human toll of business failures or eliminate the empathy that follows. Nor does it eliminate the need for market intervention. Store closings and layoffs are troubling at a local level, but at the macro level they provide sure evidence of capitalism’s great promise. The economist Joseph Schumpeter called this process creative destruction, i.e., the relentless innovation of new products and processes to replace the existing ones.

Innovation is the lifeblood of our economy and thanks to the ingenuity of American craftsmanship, there is no shortage of new ideas or businesses for us to admire. Entrepreneurs toil away in garages and coffee shops across the country plotting to launch the next generation of products and services; new business models appear overnight to take advantage of new technologies and ways of operating; and new retailers emerge to replace the old.

No matter what happens to Sears, its contributions to the American economy are well preserved. So, go ahead – pick up a tool and make your mark on the world.

Categories: MBA

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November 16, 2016A Sense of Where You Are

Having a sense of where you are in life gives you a much better chance of controlling where you are going. Nowhere is this statement truer than in corporate America where the concept of a corporate or industry lifecycle, often presented graphically as an “S” curve, has bedeviled business executives throughout our corporate history. The idea behind it is a simple one: from cradle to grave companies, products and entire industries, follow a well-worn path that includes five distinct phases from development to launch, followed by rapid growth, maturity and then decline.

So powerful is this concept that it can influence everything from the type of executives needed to operate the company at each stage, to whether excess cash is used to fund growth initiatives or returned to shareholders in the form of dividends or buybacks. The questions managers ask themselves and the metrics they monitor change depending on the company’s positioning, as do the type of investors betting with or against them.

The “S” curve conceptualizes the roller coaster issues executives face while navigating a dynamic global economy. At its core are the twin forces of competition and destructive innovation that inevitably lead to the decline of entrenched players. Throughout history, few companies have escaped its gravitational pull and those that do must work hard to reinvent themselves. Corporate annals are filled with once venerable companies that lost their dominance or disappeared altogether. Not too long ago, Blackberry and Nokia dominated the handset market but have since yielded to Apple and Samsung; Sears and Toys “R” Us were first disrupted by Wal-Mart and again by online retailing.

It’s hard to imagine that same fate happening to some of today’s corporate stars but a quick look at Amazon and IBM reveals that natural selection is alive and well. Amazon started life as an online bookseller while IBM began as a manufacturer of mainframe computers. Today, Big Blue earns most of its revenues from services and Amazon gets less than 10% of its total revenues from selling books.

In a recent WSJ interview with IBM”S CEO, Virginia Rometty discusses the company’s many transformations over its 105-year history:

“Tech companies come and go. It’s very difficult to transform [and prosper] through one or two eras. It’s something very different to go through three, four and five different eras. You can’t define yourself by a product….We define ourselves by working on the most challenging societal and business problems.”

What distinguishes the survivors from those that disappear? Savvy management – executives who exercise thought leadership and are willing to take risks. Too often management gets drunk on their own success and fails to see who or what may be nipping at their heels. Size, culture and hubris are classic impediments that can lead to corporate paralysis and inertia. However, once it becomes apparent that a new direction is needed, it is often too late to do so without painful layoffs and restructurings. Even then, it may be too late to avoid the inevitable.

Categories: MBA

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October 5, 2016MBAs for Entrepreneurial Success

Entrepreneurs come from all walks of life and establish businesses in a variety of areas, from restaurants to social media, from healthcare to financial services. However, regardless of the business, their founders are all driven by a common trait – the passion and commitment to build a successful business. Although a significant number of entrepreneurs do not have an MBA, it’s becoming a highly important factor for success in the twenty-first century.¹

Passion goes a long way in many endeavors but passion alone doesn’t guarantee success. The expert knowledge that MBA students attain over the course of their programs provides them with a foundation on which to build a prosperous firm. This knowledge transfer is invaluable because it allows entrepreneurs to learn from the mistakes of others, thereby reducing the probability that they will repeat those errors¹.

In addition to the fundamental business concepts, MBA students are exposed to the challenges of doing business on a global scale. The integration of markets worldwide has made it possible for even small proprietorships to begin operations with a global footprint, something that was once reserved for only the largest companies in our economy. Global companies have access to a larger pool of customers as well as an expanded list of suppliers and manufacturers from which to choose. For many of today’s budding entrepreneurs, having international business acumen is no longer an option.

In addition to acquiring needed skills in accounting, marketing and finance, entrepreneurs often create valuable bonds with their MBA classmates while growing their professional network. Today, it’s not uncommon for entrepreneurs to staff their startups with their MBA classmates or to tap into their expertise a few years down the road. Most importantly, however, MBA students often remark about how much they learn from their classmates’ professional experiences. It’s this intersection of theory and practice that makes for the most enlightening moments inside the classroom. And it helps entrepreneurs to distinguish between managing a successful firm and operating an entity that is destined to fail¹. In short, an MBA is increasingly becoming a critical advantage for entrepreneurs.

Ramapo College’s accelerated twenty-month, 42-credit MBA program is designed to test the mettle of working professionals, providing them not only with knowledge gained through a rigorous curriculum, but also through experiences beyond the classroom. For example, during the fall of their second-year, Ramapo’s MBA students spend nine days in China, immersed in the country’s business culture. Students visit Shanghai and Beijing and meet with private business executives, heads of government agencies, and Chinese MBA students.

In addition to the China Immersion Experience, Ramapo requires its second-year students to complete a capstone project in which small teams work as consultants for area businesses, solving real-world problems. This firsthand corporate experience is the culmination of the students’ learning, requiring the application of many of the skills gained throughout the twenty-month program. Ramapo’s Capstone Partners have included Becton Dickinson, BMW North America, Hackensack University Medical Center, Valley Medical Group, Dressbarn Stores, Home Depot, among others.

Ramapo’s MBA program is designed with an emphasis on leadership, critical thinking and international management, all the strengths needed to be successful in today’s marketplace, whether you are running your own business or working for a Fortune 500 company.

Those interested in learning more about Ramapo’s Master of Business Administration (MBA) degree program are strongly encouraged to visit www.ramapo.edu/mba for more information.

 

¹Source: “5 Ways An MBA Can Help Entrepreneurs”. Retrieved from http://therealtimereport.com/2016/06/19/5-ways-an-mba-can-help-entrepreneurs.

Categories: MBA

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June 24, 2016Teaching the Impossible: Creativity in Business

When people say, “That’s impossible,” what they usually mean is, “That hasn’t been done yet.” The vast majority of people in the world adopt assumptions that they never question.

Yet everything that’s possible today was once impossible, and nothing ever became possible without a commitment to try something new.

How do you teach the tenacity of one’s belief? How do you teach someone to ferret out their own assumptions and interrogate them with others? How do you awaken someone to discard limitations that they’ve placed on themselves? It is reminiscent of that old saying, “You can’t awaken someone who’s only pretending to sleep.”

Teaching creativity is a hot topic in academia right now, but even that was once considered to be an impossible task. People said, “You’re either born with it, or you’re not.” Eventually, somebody questioned that assumption and now creativity is being taught as a discipline across the educational landscape, from business schools to medical schools.

Art as Rx

In a drive to foster innovation and new business models, MBA programs are taking a closer look at how creativity is taught in medical schools. An article in Yale News reported, “While future physicians with heavy course loads at the Yale School of Medicine usually don’t have the time to ponder art, these students were visiting the museum for a required class — one that could someday save a patient’s life.”

At many medical schools, including Yale and Wharton, medical students are required to take a course on art appreciation. The evidence suggests that students emerge with an ability to make better diagnoses because they take a more holistic approach to the patient’s problems. Looking at the entire picture, instead of just looking at the immediate symptoms, yields better outcomes.

Business by Design

Medical schools are not alone in searching for creative ways to teach the skills that will improve outcomes. To succeed in a highly competitive and dynamic marketplace, companies need creative thinkers. But is it possible to teach creativity? Some of the leading business schools, including Stanford, John Hopkins and MIT, think it is and are encouraging students to take courses in design.

Brint Markle, cofounder of AvaTech, took design classes as part of his MBA at MIT’s Sloan School of Management. He said, “Taking a design course is a really fantastic way to learn about solving problems in very different ways. It’s also really valuable to learn to speak other people’s language outside of the MBA community.”

The Art of Comedy

Art appreciation and design courses represent two pathways to original ideation in this new approach to teaching creativity. Something else that is gaining widespread acceptance in the business world is improvisation comedy. Many years ago, corporations did this as a means to promote team building, and today improv classes are part of the standard corporate training at companies like Google, Pepsi and McKinsey.

Last year Ramapo College invited two improvisation instructors from the Magnet Theatre in New York City to join one of its MBA leadership classes. The lessons learned during the improv session are consistent with the skills needed for success as a professional manager. The first one is that you can’t win alone – your improv team wins or fails together, there are no individual awards. Everyone learns to play off each other, magnifying each other’s strengths and minimizing their shortcomings. Improv teaches you how to listen, how to be fast on your feet, and how to get comfortable when presenting in front of a large, sometimes skeptical, audience.

The End of Certainty

There is one very important reason why teaching creativity has become such a high priority: the rate of change in our society. In a competitive global marketplace where disruption is business as usual, you need creativity in your corner just to survive.

IBM — which for decades has been synonymous with predictability and repeatable processes — released some fascinating survey results on creativity in business. In talks with more than 1,500 business leaders in 60 countries, IBM found that 80% of these execs expected their industry environments to grow “significantly more complex” in the very near future. However, just under half of them were confident that their workers had the skills to deal with those changes. What the execs all agreed on was that they urgently needed workers with creativity more than any other skill set.

The Rise of the Machines

Much has been written about the strides in robotics and artificial intelligence and the fears that workplace jobs are increasing at risk for disruption. The substitution of capital for labor has long been part of our economic history but until now it was largely confined to rote tasks or assembly line jobs. However, with the ascendancy of artificial intelligence, more sophisticated tasks are being threatened with substitution. IBM’s Watson Computer beat the reigning Jeopardy! Champions in 2011 and has since gone on to graduate from law school and medical school. Today it speaks multiple languages and can process 800 million pages of text per second.

What is likely to remain from the ascendancy of artificial intelligence is that tomorrow’s valued workers will operate in domains where cognitive abilities are robot-proof. According to an article in The Chronicle of Higher Education, “The robot age invites people to be not drones, servants, or vagabonds, but creators. Technology will free us to ask questions that have never been posed, to envision beauty never before unveiled in the mind’s eye. To achieve this, though, we’ll need to educate people very differently.”

Is it fanciful to think that we can teach creativity or is it merely common sense? Perhaps. But it’s not hard to see why creativity is in such high demand. Appreciating the artistic genius of Picasso, designing something or performing in front of an audience may just turn out to be the best training for someone leading an international organization in today’s impossibly complex world.

Categories: MBA

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June 24, 2016AACSB-Accredited MBA Programs: What It Means & Why It Matters

Most colleges and universities are accredited, first and foremost, by their regional accrediting bodies, such as Middles States. Above and beyond that, some schools have earned specialized accreditations for certain programs. When researching schools and programs of study, it is important to consider what those accreditations are and the importance and reputation they carry. One of the most respected accreditations for MBA programs and business schools globally is the AACSB accreditation because less than 5% of the world’s 13,000 business programs have earned this distinction.

What Is AACSB?

The Association to Advance Collegiate Schools of Business (AACSB International) is one of the oldest accrediting bodies for business programs dating back to 1916 and with significant influence on shaping business school standards since the 1920s. This premier certification offers international
recognition for programs offered on a bachelor, master’s, and doctoral educational level.

Schools that have earned AACSB accreditation are required to follow certain standards to maintain high-quality business programs and to continuously innovate and improve those offerings. The prestige of AACSB accreditation is recognized by employers and educators worldwide and should be the first thing you look for in an MBA program.

How an MBA Program Becomes AACSB-Accredited

Achieving AACSB accreditation requires fulfilling various steps of a rigorous process that ensures that the school and the degrees it offers, including the MBA program, meet or exceed accreditation standards. According to the Association to Advance Collegiate Schools of Business International, one of the eligibility requirements is for the school to obtain local and regional accreditation. One such regional accrediting organization, for example, is the Commission on Higher Education of the Middle States Association of Colleges and Schools, or Middle States, which encompasses states including New Jersey, New York, and Pennsylvania.

After meeting this basic condition, a development plan that outlines principles of accreditation and strategies to fulfill these standards is put forth by the business school and implemented with the aid of AACSB mentors and committees. A review team of business school deans will then visit the school and evaluate the school’s progress and will send a recommendation for accreditation approval to the AACSB Initial Accreditation Committee and Board of Directors.

If the committee and board approve the recommendation, then the school is granted official AACSB accreditation for all of its business programs. This process is stringent, as development plans alone can take years to implement. Additionally, schools are expected to maintain these high standards for each of the accredited programs offered. The school and the programs are re-evaluated every five years to ensure quality education and fundamental requirements are continuously and consistently being met and improved upon.

Why AACSB Accreditation Matters

Being a part of an AACSB-accredited program matters to employers that know and respect the accolade and are seeking quality employees. The accreditation provides prospective employers with peace of mind, as they will know that they are hiring individuals who are equipped with a high-level education, and who require less training than an applicant without the same accredited experience.

Employers can also be confident that applicants have the dedication needed to see a project from start to finish, if they have completed an AACSB-accredited business program. Since the standards of the program are kept high, it is guaranteed that graduates of these programs have met and exceeded these standards.
Enrolling in an AACSB-accredited MBA program provides you with access to challenging work that’s compatible with today’s business environment.

You will also have access to stellar faculty members and quality career and academic connections, including:

• Business networking events.
• Business plan competitions.
• Career coaching.
• Academic support services through writing labs and tutoring services.

Academic work is designed to foster innovative thinking while encouraging interaction between peers and professors. Despite variations in technology and how the information is delivered, AACSB-accredited MBA programs are meant to highlight consistent, excellent curriculum for equivalent degree programs. To gain the best collegiate experience coupled with networking opportunities, adequate academic and career support, engaging activities, challenging curriculum, and networking opportunities, consider choosing an MBA program with AACSB accreditation.

The AACSB-Accredited MBA Program at Ramapo College

Accredited as one of the top quality AACSB business schools in New Jersey, Ramapo College’s part-time curriculum was designed for today’s working professional with a focus on leadership, critical thinking, international immersion and experiential learning and based on meeting the challenges of today’s ever-changing global economy.

Ramapo College MBA graduates lead lasting change that betters the world of business in meaningful ways, both big and small. The program seeks ambitious students, provides them with a strong, real-world based curriculum, and supports their advancement with career counseling and coaching services.

Categories: MBA

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June 23, 2016The Top 5 Misconceptions About MBA Cohort Programs

Although cohort based programs are well established across many academic disciplines, there are lingering misunderstandings or misconceptions about how the cohort model operates and what benefits it offers students. Here are five common myths followed by how things work in the real world.

Myth #1: Cohorts don’t allow for concentrations.

Reality: Even in a cohort-based program, you can have a concentration, of sorts. Ramapo College’s MBA program includes a leadership concentration that was designed to permeate the entire program along with the other curriculum pillars – critical thinking and international management skills. While a Ramapo College transcript doesn’t read “MBA – Concentration in Leadership,” there is no question about the program’s focus or emphasis.

Concentrations are quite popular among MBA applicants these days, but in a study recently published in the Harvard Business Review, the evidence suggests that MBA generalists receive more offers and higher starting salaries. According to researcher Jennifer Merluzzi, an assistant professor at Tulane, “Someone who accomplished a lot of things is better than a one-trick-pony who just keeps doing the same thing and isn’t taking advantage of what the MBA has to offer.”

Myth #2: The cohort model doesn’t provide flexibility.

Reality: This myth is a corollary of the first one. In fact, Ramapo’s cohort model is not significantly different from a part-time a-la-carte program. The 42-credit degree consists of 14 courses, six of which are considered core or functional business courses. No matter which program you choose, the core courses are basically the same. It is only after completing the core courses that curriculums begin to diverge.

In Ramapo’s case, the themes that define the program are embedded throughout. And, not unlike the a-la-carte programs, Ramapo’s second year students choose two electives, which allows for additional “micro concentrations.” The biggest advantage of the cohort model is that, with the exception of the electives, students take the courses in the same sequence. Since you’re not flipping around from term to term, you get to know your classmates pretty well, which can be an enormous benefit. That leads directly to the next myth.

Myth #3: A diverse cohort may dilute the MBA experience.

Reality: Everybody tends to be anxious about joining a cohort for the first week or so. They worry about getting stuck with people from different professions; they worry about being the only liberal arts person in a cohort full of business majors; they worry about being the only 50-year-old in a cohort of 20 something-year-olds; and they worry about the length of time needed to get back into study mode.

By the second week, however, the fear starts to fade and is quickly replaced with enthusiasm. The cohorts really are magical in that sense. Everyone, regardless of their background or age, has something valuable to contribute to the cohort, or they wouldn’t have been selected. Behind the facades that hide students’ perceived shortcomings is a common ground filled with a desire to improve one’s professional opportunities. It’s competitive, but students realize that it’s not a zero sum game, and they recognize that it’s possible for them all to win together. In the end, the cohort becomes both a support network as well as a professional network that can lead to new professional opportunities and a lifetime of friendships.

Myth #4: Cohorts have the same attrition rate as a-la-carte programs.

Reality: The probability of completing your MBA in a timely manner is much greater in a cohort model. There were two students at Ramapo who, when faced with a difficult personal situation, decided to take a leave from the program. At Ramapo, students are permitted to hit the pause button, but they can only resume their studies the following year when that course is offered again. In both cases, the students came back after a few weeks and said, “When I told my cohort that I was leaving, they convinced me that if I left, the chances of coming back to finish were quite small.” They were right, and that’s backed up by empirical data.

So, thanks to the support of their classmates, both stayed and graduated in 20 months. Under ideal circumstances, the a-la-carte programs are completed within three years but without the camaraderie and commitment of a cohort, many students take in excess of four years to complete them. (Note: most graduate programs require students to complete their degree within five years of starting).

Myth #5: The lock-step pace of the cohort model might be too restrictive for some students.

Reality: Perhaps the biggest advantage of the cohort is that your classmates keep you on track to graduate within the shortest possible time. That way, you start earning a return on your investment much earlier. However, some applicants worry that the lock-step structure isn’t flexible enough for someone with limited formal business education. They argue the extra time afforded to them in a traditional program lets them concentrate more deeply on their academics.

The cohort model may not be right for everyone, but staying focused and plowing ahead without interruption for Ramapo students has proven to be the best learning experience whether they were an accounting major or English major. Furthermore, the idea of completing a program in 4+ years isn’t all that appealing when you consider the impact on your personal and professional life.

One Great Idea

If there is just one message to take away, it’s that the cohort model in general, and Ramapo’s program in specific, are not inflexible. Each year incremental improvements are made to the Ramapo program based on student feedback. In the last few years the sequence of classes has been improved, a course on data analytics was introduced, an improvisation team was invited to join our leadership class, and, this year, a second course in Project Management will be added, allowing qualified students to complete their project management certification (PMP) before graduation. And other changes are in the pipeline. In many respects, the added structure of a cohort model is ideal for innovation because the change applies to everyone and the impact is evident almost immediately.

Categories: MBA

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June 22, 2016A General MBA Leads to Better Job Offers

We live in an era of specialists due in large part to advances in science, technology and healthcare. Today, there are more than 145 specialties and subspecialties for physicians to choose from, up sharply in the last 25 years. Advances in technology have also fueled the growth of business specializations, particularly in finance. Yet when it comes to middle and senior managers, the opposite appears to be true. Generalists are winning the talent wars.

That’s the conclusion from evidence presented by researchers at Tulane and Columbia Business School, who reported their findings in the Harvard Business Review.

Market Penalty

Although some students who followed a more specialized track during their MBA studies did succeed along specific career paths, the majority of employers definitively favored those who could demonstrate a wider range of fundamental leadership skills.

The study also gave reasons why the business community appeared more welcoming to those with broader backgrounds. Jennifer Merluzzi, one of the professors who ran the long-range study, stated unequivocally, “Specialists were definitely penalized by the market. Not only were they less likely to receive multiple offers, but they were offered smaller signing bonuses. In some cases, the specialists earned up to $48,000 less than their generalist peers.”

Oversupply of Specialists

The fact that there is now a more favorable outlook for general MBA jobs might seem to run counter to the advice that many MBA students have heard repeatedly throughout their academic and professional careers. Mentors often warn, “You can’t make it as a wandering generality. You must have a specific skill set.”

But according to Professor Merluzzi, that line of thinking can lead to a job market with an oversupply of specialized MBAs, “You end up with many similar people in the market. Specialization becomes commodified, giving you less bargaining power, because you’re easily substitutable. Plus, when the firm is used to hiring a lot of people like you, it’s easier to calculate your value compared with someone with diverse accomplishments.”

Micro-Concentrations

However, her latest new findings don’t necessarily contradict with established wisdom. MBA students can distinguish themselves by fine-tuning individual skillset combinations without limiting themselves to intensive finance or marketing specializations.

One way to do that is through “mini-concentrations.” It has become increasingly common for MBA programs to allow students to earn a professional certification along with their MBA. For example, a certificate in project management from the Project Management Institute (PMI) can be rolled into the general MBA program. Students then enter the workforce with the broadest leadership training, in addition to a certification that is currently highly prized among recruiters within various industry verticals.

The Global Outlook

This preference for a more general MBA vs. a concentration track has become a global phenomenon. According to Andrea Masini, the Associate Dean of the business school at HEC Paris, senior level execs today are most in need of business leaders with more extensive knowledge. They need leaders who can take an active role and advise their teams in any problem area at any time.

Stefano Caselli, the Vice Rector of International Affairs at Italy’s Bocconi University says, “The concept of MBAs is to create top-quality managers in many areas of management.” The international picture, characterized by volatile economic projections and intense competition from developed and emerging markets, demands leaders who are proficient in a range of skills so they can shift gears instantaneously.

In addition, the earlier trend toward more narrow academic concentrations tended to stifle overall corporate creativity and limit enterprise-wide knowledge among middle-tier managers.

The Time of Generalists

Gary Vaynerchuk, CEO of VaynerMedia, turned a simple retail store into a $60 million business in under seven years. Part of that success is due to his strategy of hiring only generalists. But that doesn’t mean you have to spread yourself too thin, though.

Vaynerchuk said, “I don’t believe in trying to strengthen weaknesses, but I do believe in working hard to be good at many things. In life, you will be required to take on many different tasks. You might be really good at something now, but don’t let that stop you from finding out what else you can dominate. You’ll never know when you’ll need to tap into more than one skill. It’ll speak to your agility and your ability to offer a number of benefits to a certain situation when the time calls for it.”

That time could be as soon as graduation for many MBAs, coming into industries in the midst of disruption. Many companies are experiencing some type of disruption from the likes of mobile-based apps, the sharing economy, artificial intelligence and the Internet of Things.

While specialists are seen as experts in their fields, general MBA graduates are seen as more capable of assuming the highest executive functions in the face of accelerating change. “Leaders tend to be generalists,” Professor Merluzzi concluded. “They can shift course and manage multiple areas. They’re more flexible.” What organizations need to survive in this new reality are leaders who can adapt to new conditions instantly and lead their teams into unknown territories.

 

Categories: MBA

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June 10, 2016Capitalism's Great Promise

In a recent WSJ editorial, the Dean of Harvard Business School provided a defense of Wall Street that has been absent from the political debate thus far, “Imagining an Economy without Wall Street.” The juxtaposition of Wall Street and Main Street has been political fodder throughout modern history but, for some reason, capitalists rarely come to its defense, at least publicly. When someone does, it’s worth paying attention to. This is especially important today because a generation of young workers knows little of capitalism’s great promise.

As a business leader, it is important to understand why capitalism has made the US the envy of the world. But it’s also important to reach your own conclusion about whether it has outlived its usefulness and, if so, what is going to replace it.

What most people fail to recognize about free market capitalism is that it is unapologetic about unequal outcomes. Capitalism does not promise equal riches, but rather equal opportunity to benefit from the fruits of one’s labor or the creation of intellectual property. Throughout the ages, organized societies have dealt with inequality of riches and for much of man’s history wealth resided within the ruling class. But without democracy’s commitment to equal opportunity and the protection of individual property rights, the ruling class is eventually undone by the masses.

Emigrants come to our shores not for the promise of owning a house on the beach but instead for the promise that through hard work and self-sacrifice they may someday have the opportunity to own a home – something that’s unattainable in many countries. Accepting that a mansion holds no monopoly on happiness is what allows the large and small homeowner to coexist happily on the same street. However, the benefits of capitalism crumble when people lose faith in its democratic underpinnings, when the absence of economic growth turns the hard work of the small homeowner into hard labor, and when wealth is concentrated among the ruling class.

To be sure, capitalism is not without shortcomings, but income inequality need not be one of them; it is the natural outcome of an economic system that knows no equal. Until we identify a superior mechanism, politicians and business leaders would do well to spend time thinking about how to grow the economy so that the allocation of scarce resources can once again raise the income prospects across all economic classes.

Categories: MBA

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June 8, 2016Am I Too Old for an MBA?

Many of Ramapo College’s older applicants ask themselves some variation of the question in the title of this blog. The simplest answer is that a 50-year-old with a recent MBA has a distinct advantage over a 50-year-old without one, all else being equal. While it may not be right for everyone, increasingly an MBA is proving to be a versatile degree in response to the sweeping changes underway in business and society. In this blog we take a closer look at those changes and identify cases where an MBA makes sense later in your career.

Statistics on Older MBAs

The National Council on Aging reported that by 2019, over 40% of Americans over age 55 will still be employed, representing one-quarter of the U.S. workforce. Meanwhile, data from the Committee on Economic Development shows that these older workers excel at tasks requiring careful judgment, commitment to quality, and longevity. Note that those are precisely the areas where younger workers have not excelled.

The average age of incoming MBA students across the country is 28. However, while the average hasn’t changed much over the last 30 years, the age range among enrollees has been getting wider. The reasons are clear – younger workers need skills to succeed in the new age economy and technological advances and global competition are shortening corporate and product life cycles, reducing job security for all. And thanks to advances in healthcare, life expectancy is increasing, allowing older workers to extend their employment within a given profession or to embark on a second or even a third career before retiring.

Age is a factor when calculating the return on your investment (ROI) in an MBA, but if the numbers make sense, get the degree. Many older applicants may judge the value of an MBA based solely on the personal satisfaction that it brings them and the doors it opens regardless of the ROI calculation. Older applicants often express frustration that they put off applying for an MBA, even when it was financially feasible, due to professional and/or personal commitments.

Keeping Up and Branching Out

One of the biggest hurdles for older applicants is wondering whether they still have what it takes to keep up with younger generations of students. In our experience, the determining factor between success and failure in graduate school is commitment, not how long it has been since you last set foot inside a classroom. Whether you’ve been out of school for six years or 25 years, it’s still a challenge to get back into “study mode.”

Ricardo Mier, a business analytics and strategy exec, explained in a piece for LinkedIn “How Getting an MBA After 40 Revitalized My Career.” Mier found that getting an MBA later in life, when he was more mature and knew what he wanted, helped him be a more focused student. He said, “The MBA opened the door to a world of knowledge and widened my fields of interest. Since graduation, I read on average a book per week and vary the topics to cover a diverse number of themes. One week I’ll be reading about how big data has taken marketing to a new level, the next it will be about how corporate culture and innovation helped turn around a struggling enterprise. Before my MBA, I used to focus on being the best at what I did. Now I focus on being the best at what I want to become.”

Free Agent Nation

It’s important to understand how the employment landscape is changing. In the past, companies preferred to fill management positions from within, and it was not uncommon for some workers to stay with the same company until retirement. Today, positions are filled with the best internal or external candidates. In fact, companies may prefer to look outside when they are entering a new market. And some workers are finding it necessary to go back to school just to keep up with advances in their own specialty. In a dynamic economy, the workers who fair best and have the most options tend to have the broadest skillset.

Recent research from IMD suggests that four out of 10 of the market leaders in a number of industries will be displaced by 2020. That’s going to put a lot of older workers back into the mix who will need new skills.

Standing Out and Fitting In

Another concern expressed by older students is whether they will feel uncomfortable in a room full of 20-something year olds. What actually happens is that younger students welcome them with open arms! Older students bring a different perspective and wealth of knowledge and experience that younger students covet. That’s why the cohort model at Ramapo College works so well for the students.

Mier remarked that in his experience, “Being one of the oldest students in my class gave me the opportunity to sit in class with a new generation. Working at a peer level with some of the brightest millennials allowed me to better understand their thought processes. As a result, I am now in a stronger position to collaborate across generations at a professional level and build more effective strategies.”

MBA programs are courting older students with more flexible schedules and hybrid delivery systems. It wouldn’t be a surprise to see the average age of MBA students trending upward in the near future as a result.

Categories: MBA

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