by Rita Gunther McGrath
Don’t rule out MBAs as a source of talent. Today they are focused on Main Street, not Wall Street.
There is a lot of hand-wringing among observers of the business-school scene these days. At the recent Thinkers50 awards ceremony in London, no less an eminence than Clayton Christensen (rated the world’s #1 Management Thinker and a big observer of the disruptive scene) proclaimed that those of us in the business-school orbit should “be very worried” about the future of business programs. Six months after the esteemed professor earned tenure at Harvard in 1999, in fact, he began to predict the demise of the entire enterprise, much to the chagrin of his Dean.
But bad news for the traditional way that business schools have operated may well mean great news for startups. Business schools, as we know them today, enjoyed a period of explosive growth beginning in the 1970s right through the 2000’s, in many cases paralleling the expansion of financial services as a portion of the total economy. Indeed, if you chart the growth of finance and the growth of MBA admissions, they follow almost identical curves. If a student got into business school, particularly a top-tier one, they were practically guaranteed a big salary bump upon graduation, especially if they got on the train headed straight for Wall Street.
One of the unintended consequences of both the boom in the financial services sector and the rise of the MBA as a hot credential is that it sucked a lot of talent out of other sectors– and out of businesses that actually produce things. That era now seems to be at an end. The Wall Street Journal recently reported on findings from Michigan State University’s Collegiate Employment Research Institute, which found that hiring for financial services at the undergraduate level is expected to be “down by 40% across all degree programs.” The forecast for those with an MBA is even worse: The report suggests a 58% drop in the posts offered by financial services firms for those with the degree.
But the implosion in financial-services jobs has triggered a fascinating new development: business schools are discovering entrepreneurship in a big way. While such programs have existed since the ’80s, the entrepreneurship curricula was always seen as a niche. Indeed one of my professors at Wharton used to complain that the admissions office systematically discriminated against the independent non-team working students who had what it takes to start a business. Well, no more. Schools are promoting entrepreneurship and investing serious resources in making employment at smaller, growing businesses a viable career option. My own school has launched an incubator, the Columbia Business Labs, a co-working space for (get this!) MBA graduates.
So, if you’ve been thinking that no MBA from an elite school would deign to look at opportunities with your company, you might want to revisit that assumption. Your growing business may be the destination of choice for some of the best and brightest we’ve got.
Rita McGrath is an associate professor at Columbia University Graduate School of Business, and the winner of the 2013 Thinkers50 Strategy Award. She was Shortlisted for the 2013 Thinkers50 Book Award, and ranked #6 on the Thinkers50 2013 ranking. This article originally appeared on Inc.com