This Small 1-Year MBA Program May Have The Best ROI In Europe - Poets&Quants

Lancaster University Business School topped our list of one-year MBA programs in Europe for ROI. Lancaster MBAs say they pay back their loans in a relatively short 2.7 years. Lancaster photo

The fundamental question facing everyone considering an MBA: Is it worth it? MBAs are expensive, and students need to be convinced that they will get a good return on their investment. So which are the top business schools in Europe for ROI? Poets&Quants crunched the numbers and came up with some interesting results that could guide potential students’ decision making. 

We took the self-reported salaries of graduates three years after graduation from The Financial Times’ full-time MBA ranking, then we found out the cost of an MBA in the year those students took it. By dividing one by the other, we calculated the cost-to-earnings ratio. And because we thought it was also relevant, we then looked at how long graduates say it took them to pay back their MBA loans. That figure was taken, when available, from the Forbes full-time MBA list.

We should note that this is a survey, not a ranking. The point is not to rank the schools from best to worst, but simply to give potential MBA students an idea of the range of ROI, what drives it, and whether it is an important measure for them. We chose 10 top-notch European schools of various sizes from a range of countries, all with one-year full-time MBAs — which means that top European schools that have longer courses such as London Business School, HEC, ESADE, and IESE are excluded.

As a guide to what follows, it might be useful to take a look at the statistics for London Business School, which often tops the rankings for European schools. Its MBA can be taken over 15, 18 or 21 months, so it is tricky to compare to others. Given that the three-year salary figure was a pretty high $167,897, that gave a course-cost-to-earnings ratio of 2.1. It took LBS students 3.4 years to pay back their loans, the highest of any of the MBAs we looked at, though that could be in part be because of the high cost of renting in London.

A PAIR OF NORTHERN ENGLAND SCHOOLS

Lancaster University Business School, on the edge of the Lake District in the north of England, was top of our list, with a multiple of 3.2. Lancaster MBAs say that they pay back their loans in a relatively short 2.7 years. Next were Mannheim (Germany) and Durham (also in the north of England), with a ratio of 2.9. Cambridge University’s Judge Business School was a whisker behind them with a ratio of 2.8. Mannheim’s students took a relatively long three years to pay back loans, significantly above Judge’s 2.4. We do not have a figure for Durham.

ESMT, based in Berlin, Germany, came next, at 2.5, followed by INSEAD with a ratio of 2.6. This 10-month MBA also had the highest salary on our list, at $177,157, which justifies the high cost, while EDHEC (France), Bocconi (Italy), and Imperial (England) were clustered below them, at a ratio of 2.3. Imperial students took 3.1 years to pay off their debt, compared to just 2.2 years for Bocconi’s and EDHEC’s MBAs. The figure for ESMT is unavailable.

Copenhagen School of Business, in Denmark, had the lowest three-year salary on our list, at just $91,000. An MBA cost of $48,000 meant that this MBA had a ratio of 1.9. Swiss school IMD, in Lausanne, had both the highest cost for an MBA in our list, at $85,000, and the highest three-year salary of $156,908. That gave it a ratio of just 1.8. However, that might be a misleading figure. IMD came top of Forbes’ best MBA rankings in 2017, which measures salary five years after graduation. IMD students also took the second-least time to pay off their loans, at 2.3 years. IMD is famous for executive education, so it is possible that lots of firms are helping students with their fees. We don’t know the payoff time figure for Copenhagen.

CHEAPER MBAs = GREATER ROI

What does this research tell us? The first conclusion we can draw is that cheaper MBAs often have a greater financial ROI, at least in a three-year time-frame. The schools with the biggest ratios have relatively low-cost MBAs. Durham’s, for example, costs just $35,900, while Lancaster’s costs $33,000. 

Among all 10 schools, the average reported salary three years after graduation was a relatively low $104,000. Market forces are clearly at work here; a target salary of just over $100,000 is only attractive — or financially feasible — if you are paying less for the qualification. Copenhagen is possibly an exception, for reasons we’ll come to. 

The second conclusion is that exchange rates make a difference. (Note that all costs were converted to dollars at the time of writing, early December 2018.) All the UK-based schools in our list had good ratios, and that is largely an effect of the weak pound. British schools such as Judge, Durham, and Lancaster were historically not the bargains they are right now, and a stronger pound would have reduced their ratios. 

Many students have told Poets&Quants that sterling’s weakness has made UK institutions attractive, but most say that they see the current cheapness as an additional benefit, not a reason to choose a UK school. If value for money is a factor for a particular student, then perhaps it ought to be a bigger consideration right now – especially if they plan to move into the EU or elsewhere after studying in the UK, rather than earn in pounds. 

CAVEATS & OTHER CONSIDERATIONS 

The third conclusion we can draw is that the biggest ratios are found at less well-known schools. That could be because people with lower starting salaries tend to go to those schools, then move into higher-paying jobs, for example in consultancy. It is obviously unlikely that if you work in banking an MBA will increase your salary by a multiple of five — but if you are a school teacher, that outcome is more likely. It is possible that other small schools not included in our list also have high multiples. 

In fact, it’s more than possible that for the reason above, less well-known schools generally have higher multiples. Small classes at some schools (Lancaster has about 40, Durham around 45) also mean that a few high-salaried graduates could distort the picture. A big-name school like INSEAD or LBS might be better for your personal brand, but if ROI matters — or if you do not have the GMAT score to get into a big-name school — then a smaller one could offer real monetary benefits. 

As mentioned, to make comparison easier we have only included one-year MBAs. A 12-month course has benefits in terms of ROI, of course. The opportunity cost in terms of lost salary is lower than with a conventional U.S. two-year MBA. U.S. MBAs tend to have lower three-year multiples than European ones for that reason, and obviously it takes longer to pay back loans. 

Copenhagen School of Business had the lowest three-year salary on our list of 10 European one-year MBA programs, at just $91,000. Copenhagen photo

PAYBACKS ON TWO-YEAR MBA PROGRAMS ARE OBVIOUSLY LONGER

Students from European schools with two-year MBAs obviously take longer, on average, to pay back their loans. HEC’s MBAs take 3.3 years, LBS students report an average of 3.4 years, IESE’s number is 3.5 years, and at ESADE, the magic number is 4 years. However, those schools’ three-year salaries are relatively high: LBS’s was $167,897, IESE’s was $148,480, ESADE’s $143,542, while HEC’s was $135,858. That might look attractive, but the high cost could in some senses restrict graduates, who need to go into high-paying jobs to pay off their loans whether they want to or not. It is arguable that a cheaper MBA leaves you with more options. 

Obviously, our list has its limitations. You might argue the three-year time-period is too small to measure the real value of an MBA. That is possibly true, especially for schools that churn out a lot of entrepreneurs, who will tend to have small earnings for the first few years out of B-school while they establish their businesses. For example, 17% of students from Imperial’s most recent cohort founded their own businesses straight after their MBA, capitalizing on the school’s proximity to cutting-edge scientific know-how and London’s capital markets. Those people’s wealth might not be best measured in salary, but in shares or the future value of their business once it is sold. The low salaries at start-ups could also explain why Imperial students, for example, took the longest to pay back their loans of the schools we looked at, at 3.1 years.

Copenhagen’s low ratio has other causes. The school is famous for concentrating on sustainability, so its students are presumably not chasing top-dollar in their post-MBA careers. Its other focus is entrepreneurship, which must also depress the salary figure. The low ratio certainly doesn’t mean students are not getting what they want. 

MONEY ISN’T EVERYTHING — BUT IT IS SOMETHING 

This all begs the question: What does ROI really mean? As in all such lists, we have measured only the measurable, but other things matter, too. EDHEC boasts that “many of our alumni point to non-tangibles when reflecting on the return on investment” — for example, an extremely diverse MBA cohort which students “gain both experience dealing with diverse cultures and backgrounds and build a vibrant global network of friends and professionals for life.” In EDHEC’s last MBA class, 33% made the triple jump, and 52% found work outside their home country on graduation. All of these things are common non-monetary aims. 

At Mannheim, they talk about “ROI in a wider sense” and point out that their learning is based on “multi-competence teams,” meaning students see greater development of their interpersonal and team-working skills. The ability to spend three months overseas at a partner school is also a potentially life-changing and enriching experience that goes beyond crass monetary considerations. At Lancaster they aim to produce “mindful managers” who are thoughtful — another aim that might not necessarily translate into great riches. 

“Often people do an MBA because they are looking for change,” says Matt Symonds, co-founder of Fortuna Admissions. “That is a very nebulous thing and almost impossible to quantify. Unlike other post-graduate programs, the idea of doing an MBA is to fundamentally explore and try new things.” Symonds adds that many young people now have “a sense of purpose” and value that above cash. 

When choosing your MBA, there are lots of things to consider. Money isn’t everything. But it is something.  

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Inside HEC Paris’ Incubator At ‘Station F’ - Poets&Quants

The HEC incubator in Station F is a tailored, à la carte, and participative startup support program. The school’s ambition “is to make entrepreneurs.” HEC Paris photo

What do people want to do once they’ve left business school? It’s true that many want a steady job in a corporation, but MBAs and MiM graduates increasingly dream of being the next Jack Dorsey or Elon Musk. Entrepreneurship is all the rage, and that’s not just for those with an eye on Silicon Valley; Europe has caught the bug, too. Last year 17% of graduates from Imperial College Business School in London started their own businesses. At Barcelona’s ESADE, you can take an MSc in Innovation and Entrepreneurship. At Madrid’s IE, MBAs spend a whole term working on a start-up idea. These days, even MBA graduates who do go into steady, salaried jobs often only do so until they have paid off their debts, at which point they hope to take the plunge and start their own business.

In fact, there is no longer a hard divide between entrepreneurship and corporate life. Increasingly, recruiters are looking for “intrapreneurs,” those who can bring the fleet-footed, creative approach of a startup into the staid, disruptible world of established businesses. The more forward-looking see business school graduates whose startups have failed as desirable employees who have learned from the school of hard knocks. Some recruiters now even offer graduates an open-ended job offer for several years, allowing them to start a business with the backstop of a job if their new venture goes belly-up.

Ambitious business school students in Europe, then, would be well advised to look for schools that are embedded in the startup scene. Several are, especially those that are connected to tech hubs (see below). Perhaps the most impressive incubator in Europe at the moment is Station F, a cavernous, 34,000-square-meter former railway station that was recently transformed into a cutting-edge incubator at the expense of Xavier Niel, one of France’s richest men who spent €250 million ($286.5 million) creating it.

AT STATION F, THE HUM OF INDUSTRY

Antoine Lepretre, manager of the HEC Paris incubator at Station F. HEC Paris photo

Station F opened in 2017. It has 3,000 desks, which allows up to 1,000 startups to work there. It has all the trappings of the tech startup, with people lounging on beanbags, taking meets in white pods, and a Lego-themed meetings room; one room has printers (2D and 3D), there’s a post office, and it even has a special office that helps businesses deal with red tape. There’s a quiet hum of industry coming from young people clacking away at laptops emblazoned with Station F stickers. There are plans to open a 600-person co-living space for incubees in three towers nearby.

Facebook and Amazon have their own incubators at Station F, as does the HEC business school. HEC’s influence can be seen everywhere. The furniture is from Made.com, which was set up by HEC alumni, as was the swanky restaurant Big Mama, Europe’s biggest and possibly most spectacular eatery where you can dine inside artfully graffitied railway carriages.

HEC’s incubator is run by Antoine Lepretre, a master’s graduate from the school who worked in three startups himself before he was lured into Station F. So why is HEC so keen to be involved? “The mission for us is to increase the number of entrepreneurs,” Lepretre says. “If they fail doing entrepreneurship they have a really good profile for corporates to become intrapreneurs. Businesses are looking for young graduates who can change organizations from the inside.” Being in the incubator — or accelerator, if you prefer — helps them develop faster because they grow their networks and contacts, develop their style of management, and generally develop more quickly, Lepretre says.

HEC said yes “immediately” when approached, he says; the school currently has 60 businesses in its incubator. Being involved helps HEC in three main ways. First, it helps for teaching in new and interesting ways; rather than giving students dusty case studies to read, HEC can teach about the problems real, growing businesses are facing, and students can learn from the people working in them. Second, helping students to become entrepreneurs gives the school greater visibility; simply put, having HEC grads creating successful businesses makes the school look good. Finally, the school hopes that nurturing entrepreneurs to be successful means they will give back later in terms of time and money, something that traditionally happens more at American universities than Europe ones.

‘THERE IS A LOT MORE WE CAN DO’

What do the incubees themselves get out of being part of an accelerator? “We were looking for e-commerce mentoring,” says Achille Gazagnes, co-founder of shoe brand Caval, which has sold €350,000 of shoe in its first year and plans to sell in five European countries next year. Cheap desk space is also a benefit. At €200 per desk per month, Station F is half the price of other incubators in Paris, says Arthur Barillas of Ovrsea, which digitizes the freight-forwarding process — and which in just over a year has gained 50 clients from 10 countries. “The Internet is good, it’s light, there are meeting rooms, it’s great value for money,” Barillas says. “Also because there are so many startups, being here makes recruiting developers and software engineers easier.”

Emilie Korchia, founder of Myjobglasses, which helps students find good jobs by connecting them with professionals who give them career advice, says that Station F has given her company access to lots of experts, such as legal or UX consultants, who incubees can use for free. “The location itself helps too,” Korchia says. “Clients are curious to come and see Station F, they are happy to come here and that buys us a lot of time because we don’t have to go to them.” Others point out that Station F is super-efficient: a new member’s Internet and desk can be set up in five minutes. Just being part of the incubator immediately gives a startup credibility too: others say that HEC and Station F’s connections allowed them to raise funds in three months that they thought would take nine.

What makes a good incubator? It’s all about leveraging networks and increasing the numbers of interactions between people in the startups, visiting experts, journalists, VCs, and others, Lepretre says. Some of the good things that happen are planned, but many are a result of “serendipity,” he says. That said, success isn’t just about throwing things into the mix and hoping something happens. Even serendipity can be encouraged. Currently HEC says they are creating 200 interactions of various sorts per week, but they want to increase that, not least by bringing all their 4,000 students in to experience Station F. The long-term plan is to set up other incubators on the same model in other cities around the world.

“There is a lot more we can do,” Lepretre says.

ELSEWHERE IN ENTREPRENEURSHIP

Other non-U.S. business schools connected to incubators:

ESMT, Berlin, Germany

Unsurprisingly, as it is based in the startup hub of Berlin, ESMT business school has a vibrant tech startup community on its campus and an incubator called Techstars, which claims to be the “fastest growing startup ecosystem in the world.” Techstars has nurtured over 1,500 businesses that have raised over $6 billion; 86% of them have been bought. Every year 300 businesses are chosen for its three-month accelerator program. ESMT and its alumni co-own one of the biggest co-working spaces in Germany, called Space Shack.

JUDGE Business School, Cambridge, UK

Accelerate Cambridge helps businesses that grow out of the University of Cambridge, which are often a combinations of researchers and business school students or alumni who help them commercialize their ideas. Being at the center of the “Silicon Fen” tech hub, these often have a technology or computing slant.

Rotman, Toronto, Canada

The Creative Destruction Lab at Rotman is a seed-stage program for “massively scalable, science-based companies” with a focus on artificial intelligence, quantum computing, clean tech and health. Companies that have participated in Creative Destruction Lab projects — which now exist in several other Canadian cities — have created more than $3 billion in equity value.

NOEMA, Reims, France

Created in 2013 from the merging of Rouen Business School and Reims Management School, NOEMA in Reims has two accelerator programs targeted at very specific industries. The first is in logistics based in the port of Reims, which encourages businesses in the shipping and transport business. The second is in the edtech space, in which NOEMA is particularly active.

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Globalization In Retreat? Not For B-Schools - Poets&Quants

SDA Bocconi School of Management, based in Milan, Italy, is collaborating with Rotman School of Management, based at the University of Toronto in Canada, to create a dual-degree offering that will give participants an MBA from the Rotman School and a Global Executive MBA from SDA Bocconi. SDA Bocconi photo

Globalization is in retreat. Protectionism is gaining ground. Right? Wrong, if business schools have anything to say about it.

B-schools are bastions of free trade, the free exchange of ideas, and internationalism, and they inject this philosophy directly into the bloodstream of businesses all over the world. And despite the heated rhetoric from certain corners of the political arena, if B-schools are an accurate barometer, globalization shows no signs of slowing. 

Sean Meehan, dean of the MBA program at Swiss business school IMD, summarized the landscape succinctly during a panel discussion at the Centre Court conference for prospective MBAs in London earlier this year: “The future direction of the global economy won’t be dictated by a 70-year-old man in the White House. It will be dictated by the people in this room.” 

‘WE NEED SKILLS TO WORK ACROSS COUNTRIES AND ACROSS CULTURES’

If anything, business schools are doubling down on globalization. Berlin’s ESMT business school is one example of many. ESMT just announced the launch of a double-degree program with Yale School of Management; students who enroll in the one-year MSc in Management at ESMT will be able to continue their studies at Yale for a second year and receive a Master of Management Studies. SDA Bocconi School of Management, based in Milan, Italy, and Rotman School of Management, based at the University of Toronto in Canada, recently revealed that they, too, are creating a dual-degree offering, an 18-month GEMBA program starting in October 2019 that will give participants an MBA from the Rotman School and a Global Executive MBA from SDA Bocconi.

Brian Golding, vice dean of MBA programs at Rotman. U-Toronto photo

All elite business schools offer their MBA students trips to places like Silicon Valley or Shanghai, and they often have associations with other schools where students can study for a semester. Several loose groupings of business schools also exist. The Global Network for Advanced Management (GNAM) is an alliance of 30 B-schools that collaborate in various ways. CEMS, the Global Alliance in Management Education, is another consortium of 30 business schools and dozens of corporate and social partners; it offers a Master in Management degree. 

In recent years many top-class business schools have begun to formalize their connections with degree programs taken at various sites or which offer dual degrees. Madrid’s IE runs a dual-degree international MBA and Master of Advanced Management with Yale, as well as a dual-degree program with MIT’s outposts in Zaragoza and Malaysia that gives graduates an International MBA and a Master of Supply Chain Management. UCLA’s Anderson School of Management runs an EMBA jointly with the National University of Singapore. Paris’ INSEAD runs an EMBA with China’s Tsingtao University business school in Beijing. Several European schools run joint EMBAs with schools in the Americas (see below). 

Why is this happening? Market demand. “When we look around the globe these days, we see countries erecting more walls or barriers around their economies and around their populations,” says Brian Golding, vice dean of MBA programs at Rotman. “Our students were telling us that that’s just no way to run a business. ‘We need skills to work across countries and across cultures.’” 

DUAL-DEGREE PROGRAMS HOLD A LOT OF APPEAL FOR STUDENTS

Dual-school business qualifications offer value for money because they give graduates two degrees in the time it takes to do one MBA. There’s also the experiential appeal: European students often want to experience American campus life, and U.S. students get to live in a European city for a year. Those from farther afield get a taste of two different Western styles of business and living. 

More practically, when applying for certain jobs it can help to have an Ivy League university or a top-class European school on your resume. Then there is the network effect. Students are exposed to faculty who might have different perspectives and new alumni networks, and they also get to meet recruiters in multiple markets and locations, which opens up opportunities. 

Put it all together, and grads from cross-continental dual-degree programs get the benefits of having studied in several prestigious schools. “If you put on your CV that you have done a double-degree program, that signals to employers that you’re serious about your future because doing a double-degree is an additional challenge,” says Zoltan Antal-Mokos, ESMT’s dean of degree programs. “In a way, this may signal to your future employer that you’re committed to your own development.” 

‘WALLS DON’T WORK IN 2018’

Students get another benefit from such programs: deep experience in very different business cultures. Students on the Kellogg-Otto Beisheim joint EMBA get to experience Germany’s center of telecommunications and media as well as an American hotbed of financial services and manufacturing. Studying in Berlin and Yale gives them access to one of Europe’s coolest start-up scenes and entry to blue-chip America. Rotman is embedded in the AI hub of Toronto, while Bocconi is connected with the Italian luxury-goods sector and southern Europe’s banking center. Bottom line: Everywhere you look, employers committed to globalization like people who have experienced more than one place. 

Who are these multi-country programs for? A typical student is a leader who is driving a firm’s globalization, whether that is a global company working toward having a total global footprint, a business which is starting that journey, or one that wants to expose its future leaders to globalization strategies, says Ferdinando Pennarola, director of SDA Bocconi’s GEMBA.

“There is a lot of partial globalization,” Pennarola says. “Thousands of companies have a wider exposure in some areas. Some business models work well in old Europe, but not in emerging economies. A lot of companies need to know how to expand their global footprint.” And GEMBA students can help with that. 

Employees with a multi-country educational experience are gold-dust to businesses that are committed to globalization. And globalization is, after all, a fact of life. “Walls don’t work in 2018,” says Rotman’s Brian Golding. And they won’t in the future, no matter the rhetoric from certain politicians on both sides of the Atlantic. 

FIVE TRANSATLANTIC EMBAs

TRIUM

A triple-school EMBA run by London School of Economics (UK), HEC (Paris, France) and NYU Stern (New York). The 18-month program was ranked #2 EMBA in The Financial Times’ global rankings in 2018.

Bocconi (Milan, Italy)-Rotman (Toronto, Canada)

Bocconi School of Management has been running a GEMBA for a decade, but from 2019 will run a dual-campus one with Rotman. Participants also get the chance to visit Mumbai and Shanghai.

ESADE (Barcelona, Spain) and Georgetown (Washington, USA)

A small but highly ranked GEMBA – it was ninth on the QS Joint Program EMBA ranking in 2018. The next course starts in 2020.

Columbia (New York) and London Business School (UK)

The EMBA-Global Americas & Europe gives graduates an MBA from both Columbia and London Business School. LBS runs a similar course called EMBA Global Asia with Hong Kong University. Both last 18 months.

Kellogg (Chicago, US) WHU Otto Beisheim School of Management (Vallendar, Germany)

A joint EMBA that has been running for 20 years, where the cohort has a strong German contingent – around 30% of participants are German, and the same number are from other European countries. The course runs for 21 months, but involves just 53 days out of the office.

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ISB May Be The Most Interesting B-School In The World - Poets&Quants

The Indian School of Business has campuses in Mohali, India (above) and Hyderabad. ISB photo

It’s a business school with extensive links in both East and West, and one of the youngest elite schools in the world. In many ways, the Indian School of Business is arguably the most interesting business school in the world.

Founded in 2001 with help from Northwestern Kellogg, the Wharton School at the University of Pennsylvania, London Business School, and MIT Sloan, ISB offers the equivalent of an MBA, a part-time MBA, and an executive MBA — though for regulatory reasons their programs have different names: the PGP (post-graduate program in management), the PGP for working professionals, and the PGP Max. ISB has other courses in family business and various advanced and exec ed options. The flagship PGP admits around 900 students a year. 

ISB has two campuses, a 600-acre site in the south of the Subcontinent at Hyderabad and a 275-acre one in the north in Mohali. Many students live on campus, a practice that the school encourages for the purposes of building team spirit. They are certainly doing something right: This year ISB reached 28^th in the Financial Times global MBA rankings. 

Other numbers are also impressive. The average ISB alumnus sees a salary increase of 164%, putting ISB fifth in the world on that metric, behind four Chinese schools. ISB also ranked 26^th on the FT’s list of the best MBAs for women, of which its student population comprises between 31% and 35%, a level in line with most European business schools. ISB has a phenomenal 97% rate of employment three months after graduation, and its students have the startup bug, too, having launched nearly 500 companies. However, not all is perfect in Hyderabad: in a problem keenly felt by B-schools across the Subcontinent, just 3% of ISB students are international.

That’s a problem the school is actively confronting, says Dean Rajendra Srivastava, who joined ISB as dean and professor of marketing strategy and innovation in 2015. Before that he spent 25 years at the University of Texas-Austin, five years at Emory University in Atlanta, and seven years as provost and deputy president of academic affairs at Singapore Management University. He has taught at LBS and Wharton, among other leading B-schools. 

Poets&Quants caught up with Srivastava to get the lowdown on ISB. This interview has been edited for length and clarity.

P&Q: What is special about ISB? 

Rajendra Srivastava. ISB photo

RS: I joined as dean three years ago, and at that time if somebody had asked me to describe what ISB graduates can do in one sentence, I would have said: “They know how to get things done.” That’s what people would say to me when I told them I was at ISB: “We love your students, they can really move things around and get things done.” 

Why is that? Partly because we started out as a very entrepreneurial school. There are few mid-career business education programs in India, so relative to the pre-experience programs we had students with pretty good experience and we had a lot of diversity in the classroom. While 70-75% of the students had an engineering background, they come to ISB having worked in entertainment, infrastructure, FMCG — you name it — and sometimes having worked abroad. 

Of the first cohort, somewhere between 20% to 25% have started companies. Conservatively, I’d calculate our students have started between 450 to 500 companies. So now when people ask me what makes the school special, I add, “ISB is incredibly entrepreneurial.” We do well in the rankings, but I always think that you should be judged not on the salary increases, but on the number of jobs you have created. 

P&Q: How do ISB’s courses differ from Western business schools’? 

RS: What we teach is based specifically on what is happening in India. For example, the first story is growth. The airline sector we grew 24% last year. The automotive sector grew about 15%. FMCG is growing about 15% a year. That means we talk about making decisions quickly. What is the opportunity cost of gazing at your neighbor? 

Another thread is the role of digital in growth. Just to give an example of what this means, the government has recently created the Aadhaar ID card for 1.25 billion people using fingerprint and retina recognition. An ISB alum just started a company offering ambulance services to hospitals, and because of this Aadhaar card, within seconds they can identify the insurance coverage for that individual and which hospital will cover them. This has increased hospitals’ productivity hugely. 

We are writing our own case studies about these sorts of stories. This year we will hit 75 and next year 100. About 80% are Indian and the remaining 20% about emerging markets in Sri Lanka, Southeast Asia, and so on. 

The United States’ ambassador to India, Kenneth I. Juster, visited the Mohali campus of the Indian School of Business in August. ISB photo

P&Q: You started off with help from Western business schools, but it seems that these days you are looking East just as much as West. 

RS: We started with American schools, but we are making more connections in the East, yes. A few months ago, three of us were in Taiwan. In areas like supply chain management, we can learn from businesses like Foxconn. Now 40 Taiwanese academics from there are coming here. We are driving the integration of insights from the East and the West.

We ask, if things were done differently in the West compared to the East, why is that? For example, if you take a company like Tata or you take the keiretsu in Japan and the chaebol‎s in Korea, these were clusters that provided capital because capital isn’t diverted in the East, and also management talent to the smaller companies. We have to explain: How it is different? But also: Why it is different? That is the new learning we are working on. 

P&Q: Ninety-seven percent of your students are Indian. Do you encourage them to gain an international outlook? 

RS: Many already have it. About 25% of our students are Indians who have worked abroad and come here to study, sometimes because they want to move back. When I was a student, we moved abroad and wanted to stay there. But there are opportunities in India now. Hyderabad is Deloitte’s headquarters. They are growing from about 30,000 to 50,000 over the next 18 months. Deloitte made about 70 offers to ISB last year, and 56 accepted. 

Salary growth is up to 15% a year, and if you join a fast-growing young company rather than an established one with saturation above you, you can rise faster. I now have students from the U.S. universities I worked in asking me if I can find them an internship in India.

Many of the multinationals are actually shopping at ISB for their global needs. An alum from the 2008 class is the new chief product officer for Uber. Another is the chief strategy officer for WhatsApp. About 18% of our alumni are abroad, often in clusters like Silicon Valley, New York, Singapore, the UK, or the Toronto area.

But yes, we have several mechanisms to expand students’ horizons. One is exchange programs with our 40 partner schools. Another is a joint program about innovating in emerging markets run with Tsinghua Business School in Beijing and the National University of Singapore. 

P&Q: Are you aiming to attract more international students? 

RS: Yes, but India is just not currently a destination for education. It used to be, 70 years ago, but now we have 400,000 Indians studying abroad. The government is trying to push a program called Study in India, and we are part of it, but that program has to pick up. Also, the options aren’t well-known. The best-known, like the Indian Institute for Technology, are so hard to get into that people used to joke, “If you don’t get into the IIT you can always apply to MIT.”

The other issue was that these are government-supported institutions that were not reserving any slots for foreign students, but now they’re beginning to do that. For a while ISB has been the only one openly looking for foreign students. We are working now to get a UK school or for a U.S. school to send their MBAs and executive MBAs on a learning mission to India.

We’re talking with the alums and Silicon Valley in the Bay Area to see if we can run a program in San Francisco to start driving awareness. At the moment most of the people who know about us tend to be of Indian origin, although we do get some others. One selling point is cost. A quality education costs $120,000 in the U.S., but about $40,000 here. 

P&Q: You have a lot of success getting more women onto the PGP especially. How has that happened?

RS: At the moment our gender diversity is about 35% women, it has gone up from about 25 to 35 in the last three years and we are aiming for 40%. It may be easy in the UK to reach 40%, but in India it’s really hard work. 

We’ve done it by identifying markets where you will find the women. It turns out that India has a reasonable number of women engineers, but you have to look for them. As an example, there is an organization called Teach for India, the equivalent of Teach for America. They have very able people, and they have a high percentage of women. We are trying to work with organizations such as that. 

P&Q: What do you look for in a student? 

RS: We look at multiple dimensions. For screening purposes we look at GMAT and GPA. The average GMAT is about 710, which has been our average right from the beginning. We have kept it 710 but we have regularly turned down people with 750 because they didn’t have the communication skills. 

We interview everybody that we admit. What we’re looking for is team-building attitudes. We’re looking for communication skills. We’re looking for leadership skills. Increasingly, we are looking beyond IQ and EQ to HQ: heart quotient. For example, we were talking about Teach for India. If somebody has committed two years of their life right out of undergraduate school to teach young kids, we know they have a heart. We love to hire people who are really smart and who have an ethical center, commitment to society, and commitment to the nation.

We are also looking for entrepreneurship. I was just at a dinner with a bunch of alums in Hyderabad last night and they were arguing that we ought to give extra weight to people who already started a company. In the early cohorts we had a higher percentage of people who had already started a company before they came to school. We will look at how do we bring in this kind of mix as well. We’re also looking for global diversity. 

Rajendra Srivastava, dean of the Indian School of Business. ISB photo

P&Q: How is the PGP program evolving?

RS: We are working with the corporate sector to see which new career trajectories are emerging. For example, in India e-commerce, supply chain management, and related issues like procurement, manufacturing, channel management, pricing to advertising — all are trending. So is fintech. We are creating specializations based on these, among others, incorporating insights from our research centers into the curriculum.

The second change is that we’re shrinking the core of required subjects because we can move some of the content online and free up time for the electives. The third thing that is we’re building in more experiential learning. There are internships for less-experienced students; we have Experiential Learning Projects; we have another program where you work on a project for three months and then you pass through a filter and we can take you directly to an incubator. 

Overall there’s more digital focus today, and more specialization. For example, we are working with businesses and the stock exchange on a heavy-duty finance program, to be launched in Mumbai in mid-2019, targeted at professionals already in that sector. A lot of financial firms hire very bright, analytic graduates from engineering schools, but they often don’t have specific financial knowledge. 

P&Q: And more long-term? How do you see ISB changing? 

RS: I like to talk about ISB 2.0. Where do we go? Of course, we’re bringing in more analytics and data science into our programs, but there are things that happen in this part of the world that need to be incorporated.

For example, we are going to build a program in corporate governance with some elements of law such as intellectual property law, because to do business in India you really, really need to focus on compliance issues and things of that nature. That’s equally an issue if you’re doing business in China and India or Indonesia, so that is an area that we need to cover. Also, there’s is a big shortage of folks here who can serve as independent board members. We hope to make ISB the hub for training people to be on boards of directors. 

Another big area is looking at the big media companies. Amazon may have started in retailing but then they used that platform to get into cloud computing. Now they are becoming a major player in India in entertainment, finance, and healthcare. We need to look at the newer business models and understand, for example, what Alipay and Tencent are doing in China.

Related to all of this is going to be, how do we work more closely with the government and in particular when we start globalizing a brand? That is a big challenge and we are putting together plans for topics such as the importance of diplomacy in business. This is the sort of multidisciplinary thinking we need to start pushing in business schools. 

ISB photo

DON’T MISS HOW INDIANS SCORE ON THE GMAT and MEET INDIA’S TOP MBAs FROM THE CLASS OF 2019

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IMD’s 63% Jump In Apps Attributed To Improved Ranking - Poets&Quants

IMD Dean Seán Meehan

Located on the shores of Lake Geneva in the Swiss town of Lausanne, IMD is probably best-known as a world-leader in executive education. Its full-time MBA is a small affair, with just 90 students per year.

But this is an MBA with pedigree, having been running for 46 years. Last year Forbes ranked IMD as the world’s top non-US one-year MBA, and during the latest application process IMD saw an incredible increase in applications of 63%. That jump–albiet off a small base–outpaced every other European MBA program last year ( see Acceptance Rates For Top European Schools).

IMD says it admitted 124 of the 430 candidates who applied for admissions this past year, yielding an enrolled class of those 90 students to its one-year MBA program. Thanks to the surge in applications, IMD’s admit rate fell to 28.8% this year, lower than INSEAD, London Business School, or the MBA programs at Cambridge and Oxford. Other than IMD, the largest reported increase in MBA apps this past year was occurred at Warwick Business School, which reported a 26% jump.

Many prominent MBA programs in Europe, in fact, reported downturns in applications. London Business School received 10% fewer applications for its MBA program in the 2017-2018 admissions season, while applicants to ESMT Berlin in Germany fell 11%, and IESE Business School in Spain was down 8%.

We asked Seán Meehan, the dean of the MBA program at IMD, what was behind the surge in applications.

P&Q: Why have you seen such an increase in applications? 

SM: I think we benefit from a tremendous brand, one that evokes a lot of interest and curiosity. Also, we got a fantastic springboard from the Forbes ranking. That’s a very, very significant booster that we credit to the work and the program over the previous years.

P&Q: How have you changed things since you took over as dean of the MBA program in 2017? 

We’ve dropped the cost of the application from CHF350 to CHF200. We have also shortened the period between the application and the offer or rejection from 10 to eight weeks. We offered to fast-track a small number of people, those who we know will be sought-after by a lot of schools, which we never did before.

We attached scholarships to specific deadlines rather than allocating the money at the end of the year. That’s attractive to some people because they know that if in this particular deadline, they’re the standout student, they’ll get a scholarship. We also got donors to commit to nominating their scholarships as scholarships for women. We just did a lot of housekeeping around the process.

P&Q: How have you changed the program? 

SM: We ask the question: What’s the world going to look like in eight years? That’s the period of time what we feel our MBAs really need to make an impact.

This may not sound very controversial, but we think the world will digitalize even further. Also, businesses will be more globalized, in spite of the political rumblings. And companies have an urge to be much more entrepreneurial. Big companies will become more agile.

We addressed each one of those issues within the curriculum. Fifteen of the 17 International Consulting were with organisations struggling with digitalization.

Then we married digitalization and globalization by taking our students on a two-week tour of Silicon Valley, Singapore, and Bangalore.

Entrepreneurship has always been a very big feature of the program and we continue to emphasize it. We bring it in to strategy and to marketing and to the electives. For us is not purely start-ups and angel investing or early-stage companies, it’s about a mindset.

P&Q: Do you have a GMAT cut-off point? 

Consulting firms will tell you that they only get serious about people who have GMATs of 700 and above. If a chunk of your people will go to consulting or might want to, you’ve got to keep that in mind. Although increasing it is not an aim, our GMAT score was 10 points higher this year than last year.

But if you select for GMAT scores, you are selecting for geographies because certain countries score higher. If you want a diverse class, you can’t do that. Also, some people, especially if they are older or in more senior jobs, might not have the time to study for the GMAT, so score lower. Some with a GMAT in the 500s might have an amazing story. One of our top pieces of advice to students is to keep an open mind. We try to do the same thing.

P&Q: What are you looking for in a candidate? 

SM: People with the ambition to lead and to take on important issues in their life. We give students the standard MBA toolkit, but we’re training and developing them as leaders. The single biggest piece of feedback we get from alumni, year after year and no matter how many years ago people left, is: “The year transformed me, it changed my life.” You’ve got to submit yourself to that process and you’ve got to be willing to evolve and change.

P&Q: What advice would you give to an applicant? 

SM:  One: be yourself. Everyone will, of course, show up and put on the best face that they can, but we want to see you as you are.

Two: having a reference from an alumnus is very, very powerful. I know that an alumnus will not give you a reference unless they truly believe that you will thrive in the program, and they know what you’re getting into.

Three: Don’t lean back when you’re here for the day. Treat all of your fellow participants on the day with equal respect and kindness and engage with everyone on a fair footing.

Four: On the form, be thoughtful and genuine. All sorts of examples can show us your leadership potential, from your work, private life, hobbies and sacrifices you’ve made along the way. Those are very important to help us understand the kind of person you are.

P&Q: How will the IMD MBA change in the future? 

Part of our mission is to find tremendous talents wherever they are, especially people who have not had the opportunity and privilege that others have. Last year we ran a one-day innovation challenge in Mumbai and we made a scholarship offer at the end of the day.

We will do more of that next year because we know that the people we saw wouldn’t have thought of applying. They maybe couldn’t even afford to come to our assessment days. A Western MBA for them might be out of reach and they haven’t given it serious consideration. We want to reach those people.

DON’T MISS: AVERAGE GMAT SCORES FOR THE TOP 20 EUROPEAN BUSINESS SCHOOLS

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MBA Acceptance Rates At Top European Business Schools - Poets&Quants

HEC Paris has the lowest acceptance rate–17.5%– for any European MBA program receiving more than 1,000 applications a year

For years, the world’s MBA applicants have consistently asked the question whether the best European business school equal the best options in the U.S. The Financial Times ranking, in particular, would suggest that many of the European and Asian schools can now go toe-to-toe with the likes of Harvard, Columbia, MIT Sloan and Chicago Booth.

But the metrics in the FT ranking fail to capture statistics that reflect on the quality of incoming classes of MBA students, the selectivity of the best MBA programs, the financial resources available to schools to buy the best faculty and students, and the FT’s methodology tends to disguise the full career outcomes of graduates by adjusting MBA compensation data on purchasing parity conversions.

One of the most frustrating aspects of this debate has to do with the lack of transparency of admission statistics by many of the European business schools. INSEAD routinely declines to reveal the number of applicants to its ten-month MBA program, the number of admitted candidates or the acceptance rate for its students. So do many other highly prominent European rivals. INSEAD is a bit more generous when it comes to class GMAT averages but little else (see Average GMAT Scores For Top 20 European Business Schools).

ONLY TWO OF THE TOP 20 IN THE U.S. HAVE AN ACCEPTANCE RATE HIGHER THAN INSEAD

INSEAD’s Virginie Fougea

Reliable sources tell Poets&Quants that INSEAD, which had been ranked first by the FT for two consecutive years in 2017 and 2016, accepts slightly more than 30% of everyone who applies to the school, an acceptance rate far beyond Stanford’s 6%, Harvard’s 11%, or MIT Sloan’s 12%. In fact, only two—UNC Kenan-Flagler and Emory Goizueta—of the top 20 U.S. business schools have higher admit rates than INSEAD.

At London Business School, the acceptance rate is similar to INSEAD’s at 32.8%. At the business schools at both Cambridge and Oxford, it’s estimated (Judge and Said won’t provide actual numbers) to be slightly north of that. And at the best Spanish business schools, IESE, IE and ESADE, it hovers between 35% and 38% (see table with the latest data for the entering classes in 2018).

Asked about the school’s refusal to provide admissions data which is publicly available on all the U.S. schools, INSEAD Director for MBA Recruitment & Admissions Virginie Fougea told Poets&Quants: “The reason why we don’t communicate those numbers is primarily because it drives people to wrong conclusions. It starts creating the thoughts of ‘I have more chances’ or ‘I don’t have any chances so I should not apply or even consider this.’ We feel it gives them the freedom to decide which school they want to apply to depending on their profile, depending on the network they want to belong to, depending on the family they want to be part of. And they should make a decision based on what fits their need and career plan, rather than trying to speculate on their chances.”

AN EXCEPTION TO THE LACK OF TRANSPARENCY: HEC PARIS WITH THE LOWEST ADMIT RATE FOR ANY EUROPEAN SCHOOL WITH MORE THN 1,000 APPLICANTS

More skeptical observers suggest another reason for the lack of candor. “The simplest explanation is almost always the best one: The European schools tend not to report their stats because their stats tend not to reflect well on their institutions,” maintains Jeremy Shinewald, founder and CEO of mbaMission, a leading MBA admissions consulting firm. “If your application volume were sinking and your acceptance rates were rising, then your standards are falling. Maybe you don’t want to broadcast that? Until the trends are in their favor, expect opacity.”

When Poets&Quants asked for standard admissions data from each of the top 20 European schools, four schools–Imperial College Business School in London, Erasmus University’s Rotterdam School of Management in the Netherlands, City University’s Cass Business School in London and Lancaster Business School—-declined to provide any information at all. Many others–including Cambridge, Oxford, IMD, IESE, IE and Warwick–would only fork over partial and incomplete admissions data.

Of course, there are European exceptions to this lack of transparency. HEC Paris and London Business School routinely provide applicants the same data they can expect from a top U.S. school. With a 17.5% acceptance rate, HEC Paris can rightly claim to admit fewer candidates from its applicant pool than Wharton, Chicago Booth, Northwestern Kellogg or Dartmouth Tuck. In the past year, some 2,231 candidates, a 5% increase over year-earlier volume, applied to HEC’s MBA program. The school admitted only 391 candidates to enroll a class of 235 students.

MBA APPLICATION VOLUME MIXED FOR EUROPEAN SCHOOLS

Yet, the most selective—judged by merely the acceptance rate without regard to other crucial factors such as GMAT and GRE scores, undergradute grades or work history—is a big surprise. Mannheim Business School in Baden-Württemberg, Germany, reports an admit rate of just 16.6%, a sliver below HEC Paris, to be the full-time MBA program with the lowest acceptance. Mannheim’s 12-month program is small, with 55 students but in the past year the school says it received 465 applicants and admited just 77 of them.

Despite reports that more MBA candidates are applying to European programs, the schools reporting on their stats show a mixed picture. Warwick Business School claims the biggest percentage increase in MBA applicants this past year, reporting a 26% jump in applications. Cambridge University’s Judge Business School says applications increased by 16% to 1,286, while IE Business School in Spain reports a 10% jump in applicants to 2,927.

But applicants to a host of other well-known European options are down. London Business School says it received 10% fewer applications for its MBA program in the 2017-2018 admissions season, while ESMT Berlin in Germany was down 11% and IESE Business School in Spain was down 8%. Italy’s SDA Bocconi reports the same level of applications as the previous year: 375 for 108 classroom seats.

London Business School students gathering on the lawn

LONDON ADDS A COHORT THIS YEAR DESPITE THE 10% APPLICATION DECLINE

Still, several schools are increasing MBA enrollments in Europe. Despite its 10% drop in applicants, for example, London Business School increased its MBA intake from five to six streams this year. It now enrolls 485 MBA students a year, something made possible by the opening of a new building. LBS originally planned to expand the MBA in 2019, but the school brought it forward by a year. The school says it is not worried about the applicant decline, describing it as the sort of blip adminstrators see all the time.

While the anti-immigration rhetoric and uncertainly over work visas in the U.S. has led to a decline in MBA applications at even the best American MBA programs, Europe apparently has not seen big gains to reflect a dramatic change in demand. “Those people aren’t just thinking: ‘Okay, so I’m not going to the U.S, I’m going to Europe,’ says Benoit Banchereau, director of admissions for the full-time MBA at HEC. “Some of them, of course, are doing this. but I think some of them also go to Asia, because I think there’s also some growth in Asia. Of course, we probably get some of them will apply to HEC, and I’d say at London Business School, but I wouldn’t say that explains any of our growth.”

Still, admission directors at Europe’s best schools say there has been an increase in interest from American students. “A trend across a few business schools in Europe is the increased interest of students from the United States in MBA programs outside of their home country,” says Tino Elgner, senior associate director of admissions for full-time programs at Madrid’s IE Business School. “That is also reflected and noticeable in our application numbers. In addition, we have seen a steady increase in students from Mexico.” Increases in application volume from North America, adds Elgner, are not the result of increased marketing in that region, unlike the higher numbers from such other countries as Israel and Australia, which can be clearly attributed to a concerted effort to recruit from there.

‘WE’RE NOT EXPECTING THE IMPACT OF BREXIT TO BE HUGE’

HEC Paris’ Benoit Banchereau

Is Brexit changing application patterns for the British schools? “At the moment it doesn’t seem to be having too much effect on us,” says London Business School’s David Simpson, who heads up recruitment and admissions. “It comes up in conversation, but as many times as people are concerned, it’s with people saying they’re looking at the opportunities to be gained from being here in a post-Brexit environment, especially if you’re at the higher qualification and skill set. It isn’t impacting as negatively at the moment, but we’re keeping an eye on it. Our student body is highly international and usually those who want to stay and work in London can do so, irrespective of being European nationals or not. We’re not expecting the impact of Brexit to be huge in that way.”

Over the Channel the view is slightly different. “If I was a student today probably I would say: ’I’m not sure if I want to go to a country like in the U.K. that thinks it’s actually better to be just on our own,’” says HEC’s Benoit Banchereau. “That would be actually a first issue for me. The second one will be if Brexit happens next year, am I going to find a job in the U.K.?’”

He thinks that the very top schools will still be attractive to international students, because having them on your CV is a stamp of approval. Whether the negatives associated with Brexit will outweigh the benefits of an MBA from a less prestigious school remains to be seen. In general, though, Banchereau says, “I think more and more students are turning to countries where they feel that globalization is still actually at work.”

DON’T MISS: AVERAGE GMAT SCORES AT THE TOP 20 EUROPEAN BUSINESS SCHOOLS or THE RISE OF SPECIALIZED MASTER’S PROGRAMS IN EUROPE

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The Rise Of Specialized Master’s Programs In Europe - Poets&Quants

Marika Russo was bored of working with mice. After earning her Ph.D. and post-doc qualification, she was working in a lab in the U.S., carrying out experiments on rodents — but she wanted a change, in particular one that would take her back to Europe. After some research, Russo decided the way to make it happen was to enroll not in a MBA program but in a speciality master’s program in business, the Master of International Health Care Management at Milan’s SDA Bocconi University.

“I joined the master’s because I wanted a qualification which would bridge me over into a different kind of work,” Russo says. “I needed something that would prepare me to enter a different job market. Learning subjects like economics was something new and absolutely fascinating to me.” Following her master’s, Russo landed a job in Switzerland working for Japanese pharmaceutical firm Taneka. “This master’s gave me the opportunity to do something that I love, that I didn’t even know existed before,” she says. And these days she spends more time with humans than rodents. 

The big-brand general management qualifications, the MiM and the MBA, are still by far the biggest programs at all the major business schools in Europe. Most business school prospects want to take them, believing that they offer a solid and transferable set of skills that will propel them into a good job and guarantee a satisfying career. But things are changing. These days in Europe, a long tail of smaller, niche master’s courses are bubbling along under the surface, and business schools are offering a huge menu of master’s courses for those who see their future not in general management but as specialists who utilize the knowledge they have picked up in their undergraduate degrees. In continental Europe, it’s still the case that those with undergraduate degrees in business naturally move on to a MiM — but engineers, scientists, and those with humanities backgrounds who don’t want to abandon their unusual skills sets increasingly find a specialized master’s to be an attractive option. 

A look around the top European business schools shows just what a varied menu is out there to cater to this growing group. Imperial College Business School in London, which has a strong STEM pedigree, offers MScs in Business Analytics, Climate Change, Management & Finance, International Health Management, and Innovation, Entrepreneurship & Management. At St Gallen in Switzerland, you can take a master’s in Management, Organization Studies, and Cultural Theory (in German), or one in Quantitative Economics. They also offer a Finance degree. HEC Paris runs master’s in Entrepreneurship, Sustainability and Social Innovation in English, and Médias, Art et Création in French. Looking farther afield, specialized master’s are springing up in all sorts of interesting places: The Smith School of Business at Queen’s University in Kingston, Ontario, recently launched a Master of Management in Artificial Intelligence.  

RISING EUROPEAN INTEREST IN MASTER’S PROGRAMS SPURS SPECIALIZATION

Cristina Sassot, director of admissions at Barcelona’s ESADE Business School. LinkedIn photo

What has driven this flourishing? Europe’s regulation of higher education played a big part. Since the standardization of education across the EU in 2010 known as the Bologna Process, the idea of a three-year undergraduate degree followed by a two-year master’s has become standard across the continent. Master’s programs in general have become more appealing to students, and a pan-European market has opened up. The big business schools in Europe also report that every year their master’s degrees attract more students from the U.S. and Asia. As the general population of master’s candidates increases, it becomes more economically viable to create more specialized courses. 

From a student’s perspective, what is so appealing about a specialized master’s? “One of the main factors is that the job market requests more knowledge, right from the start of a career,” says Cristina Sassot, director of admissions at Barcelona’s ESADE school. “But it’s not the only reason. From the student’s point of view, they don’t feel ready to start their professional career or they don’t know which direction to take when they finish. Studying an MSc, especially abroad, gives you one more year to specialize in a subject and to do an internship through which you will reaffirm your expertise in the professional career you wish to start.” The “soft” skills and life experience that students gain from living abroad and attending a business school with an international student body also make them more appealing to potential employers. 

Students are also taking more control over their careers, right from the get-go. HEC Paris says has seen a 20% increase in students applying to specialized master’s courses in the past few years. “One of the changes I’ve seen over the last, I don’t know, 10 years is that young people have much clearer ideas about the things they want to do earlier in their career,” says Eloic Peyrache, dean of HEC Paris’s MSc in Management program. “On campus, we do work on trying to know yourself more, and I think it’s an important step. The idea of helping students to know exactly who they are, what they want to do, and what they’re the best at doing is something which is more and more important, and we do more on that. So I think students get clear ideas of what they want to do much earlier than they used to.” 

SCHOOL-ORG COLLABORATION LEADS TO SUPER-SPECIALIZATION

The upshot is that a lot of students who graduate in subjects such as engineering, biology or political science “realize that they want to add a business component to that because they don’t want to be stuck,” says Dean Peyrache. “The kind of career that they have access to is not the right one for them and they see that.” Adding some management strings to their bows seems can seem like a sensible choice. Some choose MiMS, but others want to remain true to their educational roots. 

If they go down the specialized route do students risk becoming siloed, and falling down a rabbit-hole of specialisation that cuts them off from the rest of the business world? At the big schools that doesn’t happen, because there is a good degree of cross-fertilization between the various programs. “A lot of the concentrations from the MiM will have joint classes with the specialized master’s,” says HEC’s Peyrache. “And the master’s in finance will have some common classes with the MBA.” The way these courses are built, he says, is that they have some classes unique to the specialized master’s but shared core general management training. That way, even the most niche master’s students can mingle with the general population, and they get to broaden their horizons by mixing with people with different backgrounds. 

And because schools can’t be expected to know everything, they often collaborate with other organizations. Peyrache points out that HEC leverages its contacts with other non-business engineering schools and research bodies to offer students courses within their specialized master’s courses on super-niche topics like robotics or space entrepreneurship. That sort of super-specialization even within a specialized master’s program is common. Students in Bocconi’s Master of International Health Care Management split into three groups, for example, looking at either global health and development, pharmaceutical and medical technology, or health care management. 

DON’T MISS THE POETS&QUANTS’ HUB FOR THE LATEST NEWS & FEATURES ON SPECIALTY MASTER’S PROGRAMS IN BUSINESS

Roman’s Brian Golden: Employers are “lining up” for students who come out of their specialized master’s programs. Gordon Hawkins photo

The direction of travel for business schools is to create more of these courses, not least because the world is just getting more complex all the time. “Deeper knowledge is needed for some employment,” says Brian Golden, vice dean of MBA programs at the University of Toronto’s Rotman School of Management. Rotman introduced a finance master’s 11 years ago and has since added master’s programs in risk management and management analytics. What they have learned, Golden says, is that the best way to run specialized master’s courses is to basically co-create them with employers, who know better than anyone what skills are needed in the workplace.

“We worked with employers to design these courses,” Golden says. “We asked them what skills they need, and we designed the master’s courses around what they told us. We almost reverse-engineered them. Employers are lining up for the students who come out of those programs.” 

Specialists from industry are welcomed into the classroom to teach courses, which means that the school can offer these specialisations without having to scan the world to find faculty with unusual knowledge.

“There will always be a market for generalist (programs) and that is still our biggest program, but our new master’s programs have all been very specialized. We are working closely with industry to design them, and we create students who have a pipeline of entry right into their businesses,” Golden says. 

COMMON LANDING SPOTS: DATA ANALYST ROLES AT TECH FIRMS

Lisa Umenyiora, director of careers at Imperial College Business School, London. Imperial photo

Does that mean that specialized master’s graduates spiral off into obscure corners of the business world after graduation? Not really. They still tend to go on to work at the same high-level firms as their generalist peers, just in different roles. “Consulting and finance are still a popular career choice for these students,” says Lisa Umenyiora, director of careers at Imperial College Business School, London. “However, their role is often aligned to a particular sector or department within consulting, depending on their program content.  We see our specialized master’s students go into a wider variety of roles at a breadth of companies and sectors including technology, clean energy, health care, and fintech.” 

At London Business School, among the most common jobs for specialized master’s grads are data analyst roles at tech firms; energy analyst roles in the renewable energy sector; finance analyst roles in sustainable investments; advisory roles at health care consultancies; and business development roles at fast-growth start-ups. Many set out on their own course: 23% of students from LBS’s Master in Innovation, Entrepreneurship & Management start their own businesses after graduation.

A specialized master’s is a good choice for someone who knows where they want to be, or at least who doesn’t want to stray too far from their current path, says Marcin Wolf, who graduated from Poland’s Warsaw School of Economics after majoring in quantitative methods in economy before working in private equity and investment banking and passing his CFA Level II exam. He then enrolled in LBS’s Master in Financial Analysis program.

Why an MFA and not a MBA? “I decided to take my MFA because the curriculum appealed to me in particular,” Wolf says. “The tangible, finance-related courses with top-notch professors lured me to the MFA program. Also, I wanted to continue my career in investment banking so a finance-oriented program, in my opinion, highlighted my passion and motivation related to finance.” Word of mouth within the industry also played a part in his choice. “I got incredibly positive feedback from previous Polish MFA students, who encouraged me to apply for this particular program,” Wolf says. 

MORE & MORE STUDENTS LOOK TO SPECIALIZE

For someone with unusual or niche skills, is a specialized master’s that capitalizes on their rarity always better than an MBA?

“It depends on what you want to achieve,” Marika Russo says. “I have a lot of colleague with MBAs, and I see that there is a difference between the jobs we do. In terms of finance and management skills they are stronger. But when it comes to background knowledge I am stronger. Which you choose really depends on the roles you want, and what you feel comfortable with. An MBA certainly gives you a bigger overview. I didn’t feel comfortable with moving into financial management-type roles. I wanted to stay with something more technical.” 

There will always be a market for MBAs and MiMs, because some will always want a general management education that gives them options in their careers. But those big, gold-standard courses find themselves ever more squeezed by the proliferation of specialized master’s programs that allow people to give a practical twist to their undergraduate degrees — and that offer them the tools to make a satisfying career in areas they love. As students become aware of their career options earlier in life — and as schools find innovative ways of delivering courses by partnering with employers or other institutions — niche master’s will only become more attractive. 

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