THE ALUMNI NETWORK AS A COMPETITIVE ADVANTAGE OF ELITE
BUSINESS SCHOOLS
By Dominic Basulto
While many Russian applicants focus almost entirely
on generic B-school rankings or an average starting salary upon graduation,
there are many more factors to consider in choosing and then matriculating
at an elite Western business school. An important - an often overlooked
factor - is the role of business school alumni in building and maintaining
the reputation of the business school. The largest business schools
(Harvard - 880 per class, Wharton - 790 per class, INSEAD - 600 per
class) derive tremendous competitive advantages from their size over
the competition. In Europe, the next largest competitors to INSEAD are
London Business School (244), and IESE (216). In other words, INSEAD
graduates three times the number of students as its European rivals
on an annual basis. The competitive advantages are especially important
in three areas: 1) job placement and career development 2) networking
and 3) consolidation of the B-school's international brand.
#1: JOB PLACEMENT AND CAREER DEVELOPMENT
The easiest place to see the role of an enhanced alumni
base is in the area of job placement and career development. Traditionally,
current students have access to an updated database of a B-school's
alumni, divided by country, sector of employment, and even by specific
corporations. If not looking for a traditional career in investment
banking or consulting, then these alumni are vital.
These alumni can provide access to hard-won interviews,
"lobby" for worthy students, and provide as well hands-on
information about career opportunities, job openings within the industry,
and advice about interviewing (such as commenting on a firm's corporate
culture). In fact, Yale School of Management presents each departing
graduate with a leather-bound book with the contact information of all
alumni. Each year, Yale's Office of alumni Affairs solicits students
for updated information, which can't then be distributed to job-seeking
candidates.
Keep in mind that while 70-80% of all job offers at
elite Western business schools are derived through on-campus interviews,
the remainder are made through contacts and off-campus interviews. If
a corporation is not interviewing on campus, then one must rely on "insider
information," such as that provided by alumni. In general, alumni
are the recruiters sent by the corporations to visit the campuses of
the business schools and hire the next crop of MBA graduates. As such,
these alumni can effectively put pressure on their firms to hire more
of their B-school's graduates. For MBA graduates who have already, alumni
become valuable when contemplating a further career move. According
to London Business School, the typical MBA graduate changes jobs within
24 months. Thus, the alumni network becomes vital in isolating those
firms looking to replace senior managers or otherwise hiring mid-career
MBA grads.
#2: NETWORKING
Alumni are uniformly loyal. Polls such as Business
Week have been careful to take into account the extent of this "alumni
effect." An entire category in most polls is devoted to "graduate
satisfaction." B-schools attempt to stimulate this loyalty by encouraging
and fostering a broad range of activities, conferences, and even reunions
for their graduates. MBA programs such as IESE provide on-line information
for their alumni, including education, professional services, and news
about upcoming events. The key point is for alumni to keep in touch
with each other - and the B-school. Faculty members conducting cutting-edge
research on companies can also piggyback on an enhanced alumni base,
especially if the alumni are engaged in an area of business applicable
to the faculty member. Aside from the obvious job-related aspects of
these networking activities, there is the important benefit of constantly
updating one's business knowledge, so as to prevent one's MBA from becoming
obsolete.
From a more cynical perspective, a satisfied and involved
alumnus is also a wealthy alumnus and one inclined to help out future
graduates of the business school as well as the business school itself.
While business schools seek to emphasize their academic component, it
should not be overlooked that business schools are a business. Like
any business, they must look to their balance sheet. An important source
of income is alumni giving. At Harvard Business School, alumni routinely
make donations that help finance an impressive campus, modern amphitheaters
and meeting rooms, and state-of-the-art technology in the classroom.
Prior to asking for donations, most savvy B-schools stage a number of
events - such as reunions - in order to maximize feelings of loyalty
and gratefulness in their high-flying alumni.
#3: CONSOLIDATION OF THE INTERNATIONAL BRAND
The fact is that only the largest business schools
have truly global placing power and influence. Russian applicants to
business schools would be advised to consider the breadth and dimension
of the alumni pool. London Business School boasts 11,000 alumni in 80
countries; IESE has 18,000 alumni in 70 countries working for 4,000
different companies, and INSEAD has 10,000 alumni world-wide (only 24%
of which are in France) and 31 different national alumni associations.
Finally, Harvard has produced over 60,000 graduates, dominates CEO positions
in Fortune 500 companies, and commands a "name brand" in practically
any country of the world. Moreover, the number of case studies, published
papers, journals (Harvard Business Review), and pure hype that has emanated
from HBS is truly staggering.
While this fact of the "international brand"
may not comet into play if a candidate is planning to work in New York,
London, or Hong Kong, it becomes of vital importance if a candidate
is planning to work in non-traditional post-MBA cities such as Moscow
or other cities of the former USSR. In this case, the traditional rankings
lose their signifying power. B-schools such as Dartmouth are relatively
unknown in Europe and Asia, despite "Top 10" rankings within
the USA. In an effort to compensate for this fact, the Wall Street Journal
Europe publishes a list of the "Top International MBAs," ranking
INSEAD, Harvard, Wharton, and London Business Schools as the most globally-oriented
MBA programs.
Lastly, a large (and active) alumni base consolidates
the international brand by guaranteeing that a B-school is constantly
"in the press." These press clippings can then be disseminated
to recruiters, applicants, current students, and yes alumni. Leading
business schools provide current information to students about newsmakers
in the press, and are even more delighted if these newsmakers are far
afield in Europe, Asia, and Latin America. For instance, Yale distributes
updates to its alumni through magazines and newsletters about outstanding
graduates of its MBA program who appeared in high-profile publications
such as Business Week, Forbes, and Fortune. In marketing parlance, think
of the increased alumni base as additional distribution points for PR
about the business school.
In conclusion, then, an important competitive advantage
of elite Western business schools is the alumni network. This alumni
network becomes all the more powerful if graduates of the MBA program
move beyond the mid-level manager position by becoming a CEO or starting
a new high-tech business. At the top B-schools, access to this alumni
network may be one of the single most important factors in the long-term
payoff of the MBA degree.
Dominic Basulto is a 1998 graduate of Yale School
of Management and currently works as a consultant for Pericles ABLE.
He represents Pericles in America and does MBA Advising through the
internet. For more in formation please write to info@pericles.ru
or call us at 292-6463/5188 www.wetfeet.com.