As the financial services industry collapses, the University of Pennsylvania's formidable Wharton School, has found itself in the eye of an economic firestorm. Last year more than half of graduating MBAs took finance or accounting-related jobs—positions that will be much harder to come by in the post-meltdown job market.

But that doesn't mean Wharton's stock will take a dive. Consistently placed at or near the top of national rankings, Wharton grads can be counted on to adapt to changing industries and fickle economic climates, says J.J. Cutler, the school's new director of admissions.

And he should know. Cutler graduated from the University of Pennsylvania twice, once with a BA and later with an MBA. He took over as director of Wharton's MBA admissions and financial aid in January, inheriting the job from a former classmate. Here, Cutler speaks with BusinessWeek's Anne VanderMey about what it takes to get in, and why the Wharton MBA means more than finance. An edited portion of their conversation follows.

Since you came to Wharton in January have you changed the admissions process at all, or do you have plans to make any changes?

When I got here we were right in the middle of our second round so really there was no ability to change anything or interest in changing anything. I mean, it would not have made sense to do that in the middle of the process for this year. Now that we're coming to the end of this application season we are in the process of evaluating most aspects of our process to see if there are improvements that can be made. I think it's possible that we'll have some things we may change in terms of process and in terms of the application. We're kind of just starting that journey now.

Are there any predictions for what changes candidates can expect, or is it too early to say?

Yeah, too early to tell.

How would you say the financial crisis has affected the applicant pool, if at all?

I think we're largely in the same situation as most of the other schools with whom we compete. It actually hasn't changed the quality of the pool. The quality is still as high as it's ever been. We're slightly up in terms of total applications. I think many people thought that we might be up dramatically, and that didn't happen. So that makes us think that for people who are applying to a place like Wharton, it's a pretty well thought through decision that has been planned for quite some time. I think that while the financial crisis has maybe tweaked a few things around the edges for some, by and large people have been planning this for a while and have stuck to their plans. In some countries, as with other top-tier business schools, we are seeing a decline in applications. In the U.S. our applications are up double digits, and in some countries overseas we have seen some decreases. Again, overall, we're up in the low single digits, so I think the financial crisis hasn't really impacted that so much.

At the end of the day, I do think that on the financial aid side everyone is evaluating the timing and the decision to get an MBA much more carefully, much more surgically and precisely, than they have in the past. I think people are looking at the opportunity cost. I think they're looking at the jobs that they have now and the expectations for jobs coming out. They're trying to figure out what the cost of borrowing money's going to be, and trying to assess whether or not this is the right time and what the short-term and long-term returns on the investment are for them. It is causing lots of people to think long and hard about the timing and the decision. At Wharton, it has probably caused us to think a lot more thoughtfully about our value proposition and about our curriculum to make sure that we're as relevant for today's students as we are in any other period of change.

You mentioned a slump in applications from other countries. Wharton just announced a loan program for international students. Do you think this will give the school a competitive advantage among the international students who do apply this year?

We think and hope that it will. International students are the population that is probably feeling the impacts of the global financial crisis the most. We are, and have been for some time, the most international of the top-tier U.S. business schools in terms of total percentage of students and in terms of countries represented. So we feel particularly strongly about supporting our international students in a variety of ways, one of which is financial aid. The program we just announced is compelling and competitive and we're hoping that it helps a lot of our students meet their objectives for borrowing, and hopefully come to Wharton.

Do you expect the percentage of international students to remain at about 40% next year?

I think that's probably right. That's what we are targeting. It's too early to know exactly what will happen in terms of our yield, but that's our hope. I think part of it is a strategy. We like having a diverse global representative class, so that's what we're going to aim for.

On the topic of financial aid, in 2007 the mean financial aid award to MBAs was about $12,000. Is that still the case and is that likely to change?

That number is probably going to remain close to the same. It may go up a little bit, but that's about the same as it is now.

Have you been seeing any more concern from potential applicants about the return on investment of MBAs in general?

Well, yes. I think given what's happening in the macro economies of lots of countries, there is a lot more thought being put into the ROI and the value proposition. It's: "What's the job market looking like?" "What's the opportunity cost?" "If I have a job now, do I really want to leave a job in a time like this?" I think all of those things are kind of factoring together to create more questions about the ROI and about the value proposition.

What do you tell students who have that concern?

Our perspective is that now more than ever, not unlike in all industries, there is a flight to quality. We think that we have demonstrated results and that even in times of financial uncertainty, the long-term ROI on a Wharton MBA is still quite high. We have over 80,000 alumni in more than 100 countries around the world. That alumni network is very strong and powerful in terms of job opportunities. We still believe there are parts of the developing world that have a real need for managers and leaders.

We think that this financial crisis is an opportunity too good to waste, quite frankly. There will be new industries and new sectors that emerge that will have a high need for people with MBAs—people who are analytical, people who can solve complex, unstructured problems. We think the skills we teach absolutely have been proven to set up success in new industries, in new economies. And so we think the value proposition is actually quite high. Whether starting salaries hold up or whether the job search will be easy, I don't think we know yet. But now more than ever I think people need to differentiate themselves. They need to think about an investment in themselves, and we think the value of the Wharton brand has been proven to be worth a great deal over the course of someone's life.

About a quarter of students last year went into investment-banking-related jobs or brokerage-related jobs. Given the collapse of that industry, where do you think those students will be headed this year?

I'm not on the career management side, but I know our career management office is working with our alumni and the employers with whom we have had historic relationships to identify new opportunities for our students. Certainly the financial services industry is one in which we historically have had a very strong presence, but we're looking at all industries and all sectors. I know our career management office has identified new members of the office to work in industries like real estate, media and entertainment, travel and hospitality. We've got a new person working just with companies outside the U.S. in terms of identifying opportunities for students who are able to work outside the U.S., both international students and U.S. students.

So again, I think some of those students from finance might end up in energy, some in media and entertainment, some in fields like private equity and venture capital—there's still opportunity there. I think because of the consistent quality of our graduates over the years, many of the firms are still coming to Wharton. They may not be hiring as many as they have, but many are still coming [to Wharton] looking for talent and looking at this financial crisis a bit as an opportunity maybe to attract people and be prepared for when the upturn takes place. This is something we're looking at quite extensively in terms of identifying new resources to help students who maybe were looking at financial services and need to rethink their recruiting strategy.

Your predecessor was fairly proactive about enrolling some students with less work experience than the average five to six years. Will you look as favorably on students recently out of college?

Absolutely. I think we're finding more and more that people with less traditional work experience actually have a lot of great experiences from other parts of their lives. We're absolutely open to and excited about looking at people who have not had that [more traditional work experience]. We want to see people who are earlier in their careers and have less traditional experience but who also have incredible leadership potential and have demonstrated excellence.

As a school with its choice of applicants, is there any hope for students with a mediocre GPA or a subpar GMAT score?

We evaluate every application in context. So, as an example, in some countries where formal test-taking is not a part of the culture or part of the educational system, we don't expect that standardized test scores there would be as high as they would be in a country where those kinds of tests are part of the culture, are taught at an early age, and are administered regularly. I think GPA is kind of the same thing. It's about context. We don't necessarily get too hung up on the specific GPA or the specific GMAT score. We more try and evaluate based on the context and based on the particular situation.

So, to answer your question, yes, there is hope. However, we obviously want people who come here to be successful and our program is rigorous, so we are looking for people who can succeed and thrive in that kind of an environment. But we also are happy to provide extra resources for people that need it. We have no minimums, really, so we don't want to discourage any talented person from applying regardless of what their transcript or GMATs are.

Wharton's average GPA last year was 3.5. It seems as if, had you wanted to, it could have been 4.0.

Yes. And our GMAT average could be, quite frankly, as high as we want it to be, just like our GPA average could be. That's exactly right. That's sort of the myth that's out there about Wharton in particular. People don't apply because they think their scores are below the average. People ask 'What's the lowest GMAT you've ever taken?' and we joke around here that the answer that year is whatever the lowest one was for that year's class. That's the lowest one. There is no target. There is no prescribed, preconceived goal. We're looking for talented people, and the GPA and GMAT are two metrics we use, but we evaluate everything in totality and in context.

Do you recall any individual applications this year that really stood out?

Let's see. I interviewed a Korean applicant, I actually interviewed him in Tokyo, and he just quit his job at a top financial services firm and is now working with a Korean baseball pitcher in the U.S. He basically spent the last two months in spring training and he's now traveling with this pitcher as a mix of his interpreter and his mentor. We also have someone, though they may be deferring, from Cirque du Soleil. I think that may be the first time we've ever had someone in that category. We also have at least one, maybe two, former NFL football players.

We really get fascinating stories from people all over the world. I think we're seeing slightly more people doing work in the social sectors, the education space, the health-care space, the environmental space, and in the not-for-profit space. So that's actually pretty refreshing and reflects some recent strategies we put into place to develop a more robust program for business and social impact.

On that subject, what do you do if an applicant's work experience isn't strictly business related? Are there any nontraditional career paths that you see often or look favorably on?

Sure. We see a lot of engineers and professional athletes, lots of people who've had military experience, in not only the U.S. but other countries as well. We see people who are working in not-for-profits or the social sector. We see people who are involved in family businesses, people involved in religious organizations or health-care organizations, lawyers, doctors, scientists. It's really quite a diverse mix of careers and backgrounds. It really runs the complete gamut. Our goal is to find the most excellent people in each of those different fields and bring them all together.

So if an applicant really wants to stand out, is banking or finance maybe not where he should go? Would it help if that student branched out a little bit?

Well, my belief is that people should pursue what they enjoy, what they're passionate about, and what they're good at. I think the message is that business school is not just for people with a business background, and it's not just for people who are going to work in sort of the traditional for-profit business world of big companies. I think the future leaders are going to work in smaller organizations and more flexible organizations. We think many organizations are going to be heavily influenced by the public sector, by governments, and by the interconnectedness between different economies.

We use business as the lens through which to teach management skills and we think that those skills can be applied to a wide variety of things, not just consulting firms or investment banks, quite frankly. So we believe that what we teach here is how to solve complex problems and how to manage and lead people, and how to do that using analytic frameworks. Those skills are just as applicable in an arts organization, or a hospital, or a school, as they are in a big multinational company

Are there any misconceptions about Wharton that you'd like to dispel?

People oftentimes think of Wharton as a finance school. While we do think that great leaders are quantitative and analytically rigorous, that's not really about finance per se, it's about analysis as a good way to get to better answers. We think that's true of marketing and we think that's true of leadership.

We talked about some myths and rumors and preconceived notions about GMAT minimums and GPA minimums, and we don't really have minimums. We don't want to miss out on people who you know are concerned about applying because of some minimum threshold or score that they think we're looking for.

Also, I believe that we are much more collaborative than people think. I mean, we like to win and we like to compete with our competitors, but when you're here, it's a very collaborative, very feedback-rich environment. On the one hand it's tough, on the other hand, it's very introspective at the same time.

So, overall, how do you like the job so far?

I love it. For one, I'm an alum, so the Wharton brand is something I hold very near and dear to my heart. For two, I mean, you're actually getting to impact real people's lives. I believe that Wharton is a life-changing, life-altering experience and you know the ability to have that impact on people is quite humbling. It's inspiring.

You know, we've got 80,000 plus alumni, and I feel you know a deep sense of commitment and responsibility to the brand for all of them. Plus, I get to go around the world and meet some of the smartest and most dynamic and exciting young people in the world, many of whom are looking to change their countries, who are looking to change industries, and change the economies where they live. It's actually very, very rewarding and quite an amazing sort of challenge. So a few months in, I love it. I just love it.

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