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They're pursuing MBAs to change the world, but first they're forcing business schools to make changes in order to accommodate them
Editor's Note: This is an extended version of a story in the Nov. 24 issue of BusinessWeek.
Sara Hochman, 27, has always been interested in environmental issues, so it wasn't much of a surprise that her first job out of college was as an environmental consultant. But after a few years on the job, she grew frustrated working with clients who didn't have a clue about sustainability and didn't care to learn. "They simply weren't interested," she says. Part of the problem, Hochman concluded, was that she wasn't able to make the business case for sustainability. "I needed to beef up my business skills," she says. So she decided to attend business school, ultimately choosing the University of Chicago. Since enrolling last fall, she has immersed herself in green business activities—including co-chairing the Energy Club and taking a new elective on renewable energy that was added at the urging of Hochman and fellow students.
As a member of Generation Y, Hochman is part of a demographic tsunami that will soon be remaking business schools on a grand scale, and the changes she helped launch at Chicago represent the leading edge of that transformation. Since first appearing in the workforce in 2002, members of this so-called Millennial Generation have been praised and derided in equal measure—for their tech knowhow and idealism, their unrealistic career expectations, and their doting "helicopter" parents, who hover over their kids obsessively. Beginning as a trickle last year, the flow of Millennials into B-schools will become a flood this year and next, as the bulk of Gen Y begins entering the prime B-school age group of 26 to 28. When that happens, B-school will never be the same. Think parents footing the bill for tuition, personalized programs, and office hours held in the virtual world of Second Life.
At the best MBA programs in the nation—including those featured in BusinessWeek's 11th biennial ranking of the Top 30 B-Schools—the changes have already begun, starting with No.1, Chicago's Booth School of Business. There, Hochman found an abundance of features seemingly tailor-made for Millennials, including a leadership position at the B-school's chapter of Net Impact, a nonprofit focused on using business to change the world. Stanford (No. 6) and Yale (No. 24) have introduced new, customizable curriculums that allow MBAs to design their course load based on individual career paths. Chicago recently announced a similar curriculum change. And many schools, including Cornell (No. 11) and Notre Dame (No. 20), have added sustainability electives, case studies even entire sustainability programs.
Bigger Than Boomers
At Harvard Business School (No. 2), professors are experimenting with virtual worlds. The career services department at Northwestern University's Kellogg School of Management (No. 3) is turning to technology to reach students faster. And at the Tuck School of Business at Dartmouth (No. 12), small class sizes give students a more personal experience. Cam Marston, an expert in multigenerational relations, says Millennials will be screening business schools for features like these that appeal to their lifestyles and values, and schools that fail to adapt will be left behind. Says Marston: "They are going to make the schools work a lot harder."
Who are the Millennials, exactly? Born between 1980 and 2000 and 78 million strong, they are a generational cohort that's bigger than the baby boomers. Politically galvanized, they are in some ways even more influential, helping propel Barack Obama to the Presidency on Nov. 4. Generalizations about them should, like all generalizations, be applied with caution. But they like personal attention and are used to getting information how they want it, when they want it. They are strong-willed, passionate, optimistic, and eager to work. And, like Chicago's Hochman, they care deeply about the world and its problems. "There is so much potential for this generation," says Marci Armstrong, associate dean of graduate programs at Southern Methodist University's Cox School of Business (No. 18). "They're going to change the world."
And they're not going to wait to do it. Millennials are showing a far greater interest in B-school at a younger age than previous generations. Most B-schools prefer applicants who are 26 to 28 because they have enough work experience to contribute to class discussions. But last year, 38% of those who took the GMAT B-school admissions exam were under 25, up from 30% in 2004. Some programs have been inundated with applicants. Last year, SMU Cox, which accepts no more than five under-25 students a year, got nearly 300 applications from that age group—nearly 40% of the applicant pool—and accepted four. For B-schools, such decisions are difficult, since they know Millennials are unlikely to take no for an answer. "We either get them now, or we don't get them at all," Armstrong says.
One reason for the flood of young applicants may be the looming recession, which in years past has sent many scurrying for the relative safety of B-school. Another might be the surprisingly high salaries reported by the outgoing class of 2008. Among graduates who responded to our survey, average salaries were up 9% from 2006, to $104,000, and that doesn't factor in signing bonuses or other compensation. But a lot has changed since those numbers were reported this summer, and it's hard to tell how many of these newly minted MBAs are still in the positions they started in just a few months ago—or how many may lose their jobs in the months ahead. Either way, it's safe to say that current MBA students won't be so lucky, with the current market for MBA talent unstable at best.
With a recession threatening, the class of 2009 and beyond will need to work harder to land their dream jobs—and they'll be looking for B-school placement officers who work just as hard on their behalf. For two years, Lisa Feldman, director of recruiting at the University of California at Berkeley's Haas School of Business (No. 10), has been experimenting with new approaches to the old-fashioned recruiter information session. Large and impersonal, these sessions held little appeal for Millennials, so Feldman adopted a "speed networking" approach that allows small groups to spend 10 minutes with a succession of company reps. Each one fields questions and discusses a specific aspect of the company, such as pay or benefits. "It's more of a give and take," Feldman says.
Such a "high touch" approach will be more in demand as Millennials begin occupying more B-school slots. Students are demanding more hand-holding from advisers. In the past, MBAs would meet with a career adviser once or twice a semester. Now they want weekly meetings to go over career strategies. At Berkeley, MBAs participated in 1,800 advising sessions last year, a 37% rise over the year before. Interest in more frequent sessions is also up at Vanderbilt's Owen Graduate School of Management (No. 30), where students want to consult with their mentor advisers even during summer internships. "It seems that there is almost a professionalization of their career management starting in high school," says Tuck Dean Paul Danos. "Maybe even earlier."
To meet this voracious appetite for career information, some schools are turning to technology—a natural fit for Millennials. Roxanne Hori, assistant dean and director of the Career Management Center at Kellogg, was struggling to find the best way to communicate job-related information to students. E-mail wasn't working; student in-boxes were stuffed. So last month she began blogging. Her posts cover job market updates, on-campus events, and what she's hearing from recruiters. So far, feedback from students has been positive. "It's another tool to give this generation of students information they want as fast as they want it," Hori says.
Not Just Greed
Then there are the jobs themselves. Sure, MBAs are still attracted to investment banks and accounting firms, but students from the Millennial Generation are increasingly interested in jobs where they feel they can make a positive difference—whether that's building solar panels, running a food bank, or making microfinance loans in Africa. Last summer, Neil C. Hawkins, vice-president for sustainability at Dow Chemical, put two Berkeley interns to work exploring the possibility of developing affordable housing for India's growing working-class population. One month was spent at the company's Midland (Mich.) headquarters while another was spent on the ground in India. Hawkins calls it a win-win. "Students are getting experience, and we get to see them in action," he says. At Chicago, career services started a program specifically to help about two dozen students like Hochman undertaking a search for jobs in green business and renewable energy. "There are a lot of the same companies coming to campus every year," Hochman explains. "And none of them are what I'm looking for."
If career services is ground zero for the coming change in B-school priorities, it's not the only aspect of the MBA experience to feel the tremors. Electives in such areas as sustainability and renewable energy are appearing in more course catalogs. And at Harvard, the Social Enterprise Club has replaced the finance and management clubs as most popular on campus. Carl Kester, finance professor and deputy dean of academic affairs, says that while idealism wasn't altogether absent in the past, it has picked up steam. "It's become very prominent since the Millennial Generation arrived at our doorstep," he says.
In the classroom, Millennials and their desire for more intimate interaction have some schools shrinking class sizes. At Dartmouth, where students already rave about the teaching quality and highly accessible faculty, Dean Danos is not resting on his laurels. In fact, in the past year, he has added faculty but not students, an interesting move for a school that, with 12 students for every full-time faculty member, already boasts one of the lowest student-faculty ratios in the MBA world. "We want to push toward a ratio of 1 to 1," he says. "We know that isn't possible, but we think 10 to 1 is." In Danos' opinion, "dealing face-to-face with the expert" appeals to the Millennial sensibility. "It's the ideal model for what a professional school should be doing with these students," he says.
Gen Y's Techno Turf
Elsewhere, schools are turning to adjunct professors and business professionals to team-teach courses with tenured faculty—and give Millennials the real-world knowhow and authenticity they crave. Case studies, the bread and butter of MBA programs since their invention in the 1920s, are also getting a makeover. Cases that focus on more contemporary companies and issues are taking the place of old standards. "Students are telling us that they want up-to-date, real-world cases that took place in the last three or four years," says Lynn Perry Wooten, an associate professor of strategy and management and organizations at Michigan's Ross School of Business (No. 5). Last year, Harvard produced a case focused on the virtual world Second Life and its creator, Linden Lab. The first-year class discussed the case with the company's CEO in the virtual world. Kester, the deputy dean, says some faculty are even experimenting with holding office hours in Second Life. "We want to be on the cutting edge of whatever we're doing," he says. "Maybe the Millennials are coaching us a bit, but that's not a bad thing."
Of course, all these innovations and changes don't make a difference if you can't get Millennials to apply to your school. So admissions officers are shaking things up. Such schools as Stanford University's Graduate School of Business have created Facebook pages for prospective students, where they can ask questions, learn about the programs, and meet other prospective students. Other schools are regularly hosting online chats, recording podcasts, and instant-messaging potential applicants. Derrick Bolton, Stanford's assistant dean and director of admissions, says such outreach gives B-schools direct contact with Millennials on the kids' own turf. "It's important that they know you value what they value," says Bolton.
At Indiana University's Kelley School of Business (No. 15), the marketing weapon of choice to reach Millennials is the current class. Once an individual is accepted, students with similar work histories and geographic backgrounds are asked to contact the accepted student to answer any questions they may have. Dean Daniel C. Smith sees it as a way to give a big state school a small-school feel. "It's a more comfortable situation," Smith says. "They like things more personal and tailored toward them." The tailoring actually starts long before students are accepted. Events for prospective Kelley students in the New York City area are no longer held at the Four Seasons, a place that held a certain appeal for the last generation of B-school students. Now they take place at venues such as Studio 8H in Rockefeller Center, home of Saturday Night Live, or Dylan's Candy Bar on the Upper East Side. Says Jonlee Andrews, director of the Center for Brand Leadership at Kelley: "The Four Seasons is a lovely setting, but it's a bit stuffy for today's twentysomethings."
One of the most surprising challenges for admissions departments has been the rise in parental involvement. Previously, B-schools may have seen parents on campus to visit their children once or twice over the span of a two-year MBA. But now they are involved every step of the way. Parents are going on campus visits, attending orientation events, even asking to sit in on admissions interviews. "This is new for us," says Richard P. Honack, senior lecturer in marketing at Northwestern. "We gently tell them, It's a one-on-one interview, but we have coffee and doughnuts for you while you wait.'" At the Family Weekend hosted by Duke's Fuqua School (No. 8), 90% of the participants are parents of the students. Over the span of three days, they can meet with the dean, take a campus tour, and enjoy Fuqua's weekly happy hour. One explanation for the increased parental presence may be monetary, as some schools are reporting that parents are paying for some or all of their child's MBA tuition. "It's their investment," Hori says, "not their child's."
As Millennials come to dominate the world's MBA programs, they will leave an indelible stamp. It's far too early to tell what their impact will be, but one thing's for sure. Dad may be paying for it, but it's not your father's MBA.
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Meet the Millennials
To understand how Millennials might reshape business, it helps to know a bit about them. In a 2007 paper for the New Politics Institute, Peter Leyden and Ruy Teixeira conclude that Millennials' views on income inequality, government oversight of business, and the environment bode well for progressive causes. They offer no predictions on the fate of free markets but advise: "Hang on for this idea.":
Read the paper at http://bx.businessweek.com/millennials-at-work/reference/.
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