(Corrects spelling of James Ellis, dean of the University of Southern California's Marshall School of Business.)
Many MBA applicants have a dream that one day businesses will rise up and live out the true meaning of their new creeds, which include bottom lines that do more than fatten the wallets of shareholders. They have a dream that one day Wall Street will not be judged by its big bonuses but by the content of its character. It is a dream deeply rooted in American capitalism—but until recently not much in evidence on B-school campuses. That's about to change.
At many top MBA programs these days, admissions committees are seeing an increase in the number of applicants who want careers in sustainability, nonprofits, and other nontraditional sectors. In application essays and interviews, where applicants once waxed poetic about careers in consulting and high finance, idealism is the order of the day. "It seems like every other [application] I look at is talking about doing good while doing well," says Mary Miller, assistant dean of admissions at Columbia Business School (Columbia Full-Time MBA Profile). "That seems to be the mantra."
Indeed, six of the top 30 B-schools in Bloomberg BusinessWeek's ranking of the best full-time MBA programs say there's been an increase in the number of applicants showing interest in social enterprise, microfinance, sustainability, and nonprofits in the past year. "I have new optimism that this group really wants to change the world," says Miller.
The change of heart among members of the incoming class of MBA students marks an important turning point, one with potentially big implications for students, employers, and schools. A by-product of the surge in B-school applicants from the famously idealistic millennial generation, the new priorities promise to reshape the recruiting landscape and transform the very idea of what an MBA is for.
Of course, having heart is not exactly new. "It's not like we invented social concerns in 2002," says Ray Fisman, a professor of social enterprise at Columbia, where half the students now have some involvement in social enterprise, either through clubs, classes, or the school's social enterprise program. "Business schools have had this on their radar screens for some time." For the past six or seven years, says Sandra Navalli, staff associate of Columbia's social enterprise program, there has been a steady increase in interest in social and environmental issues among MBA students. Information technology has given the next generation of MBAs more connection to the world and its problems than ever before. Leaders, such as Muhammad Yunis, who developed the concept of microfinance, have inspired people to think about how business skills can be used to solve world problems, such as poverty. And the global economic crisis has also played a part. "Increasingly, the economy has forced students to get creative with job options," says Thomas W. Monaco, director of international advising and outreach at Columbia. Unable to find work at McKinsey & Co. or Goldman Sachs (GS), he says, students are pursuing opportunities of a social nature.
Another major factor bringing on this change among business school applicants is potential employers, who are realizing that having a positive impact on the community makes good business sense. Sarah Slaughter, coordinator of the Sustainability Initiative at MIT's Sloan School of Management (Sloan Full-Time MBA Profile), says businesses are seeking MBAs with skills that can help them address environmental and social issues, in effect creating a new market for MBA talent.
With applicants and recruiters demanding change, business schools have taken heed, developing programs, courses, and activities designed to ready MBAs for the brave green world. "The administration in the old days would say, 'That's the idealism of the MBA student,' " says James Ellis, dean of the University of Southern California's Marshall School of Business (Marshall Full-Time MBA Profile). "Now, administrators say, 'This is the reality.' "
Starting in January, Sloan MBA students have been able to earn a certificate in sustainability, which includes specialized courses and "sustainability internships," according to the school's Web site. In 2008, the USC's Marshall School opened the Society & Business Lab for students and faculty interested in social and environmental work. Career services offices are also reaching out to new recruiters in these sectors to show them how MBAs can be of service, and they're seeking opportunities for students in traditional MBA companies that might have departments dedicated to social enterprises and the like. Some schools, including Columbia, have career placement liaisons who focus only on nontraditional, socially minded employers.
While schools are scrambling to make nice with nonprofits and other nontraditional employers of MBAs, everyone is concerned about how these new career goals will affect the average starting salaries for graduates, and ultimately the schools' standing in the rankings. "I don't know how they're going to support themselves," says Miller, who adds that many of the most successful applicants with these interests have taken time off from work to spend months in impoverished parts of the world to help people in need.
Lower salaries are not stopping the most dedicated MBAs, however. Rob Brawner, who graduated from Emory's Goizueta Business School (Goizueta Full-Time MBA Profile) in 2006, says after eight years in the private sector, including a stint at McMaster-Carr, a private distributor of industrial supplies, he wanted to learn how to apply his business skills to global challenges. Today, he is the program director of the BeltLine Partnership, which is part of an urban renewal project in Atlanta. Brawner admits that he took a 50% pay cut from his pre-MBA program salary. "It's worth it for me knowing I'll have a meaningful impact and create tangible solutions for future generations," he says.
One of the fellows in the USC Marshall Society & Business Lab, Breana Teubner, is focused on wealth disparity and poverty. Like Brawner, she isn't looking for a pot of gold at the end of her rainbow. "While we may not be multimillionaires two years out of school, we believe there will be a market for this work," says Teubner. "There will be a component of what I'm learning in whatever I do."
By offering scholarships, fellowships, loan forgiveness, and internship subsidies for MBA students who are taking lower-paying jobs for good causes, many business schools, including Goizueta and Columbia, are alleviating some of the financial burden. But in other areas, change is coming slowly. "Faculty don't change as fast as students do," says Peter Roberts, associate professor at Goizueta, who adds that convincing faculty to incorporate these issues into the coursework and finding effective career placement strategies are challenging. But the revolution is already under way, so there's not much business schools can do but go with the flow.