HBS and the Disruptive Job Market

The world is changing. A few years ago, finding a job after graduation was a no-brainer. This last September, three months after graduation, 15% of the Class of 2002 were still unemployed. Of course, this can only be a minor, short-term inconvenience, due to a harsher economy… But what if this situation was nothing but proof that insidious forces are at play that progressively weaken our comparative advantage on the MBA placement marketplace?

Look at the latest WSJ survey of MBA recruiters (Monday 09/09 issue). HBS slips this year from #8 to #9. We can satisfy ourselves with being the elite and the best, but when it comes to leaving this place and finding a job, we are trailing many.

Okay, maybe I’m being too negative. After all, according to Career Services, job prospects are lower but our “recent graduates’ salaries still favorably compare to those of competitive MBAs” and “HBS is still a great place to be.” Substitute HBS by Apple and graduates by Macintosh. This should give you a feel of Steve Jobs’ speeches back in the time of high margins and declining market share. Well, we know how it all ended.

According to the WSJ, if we listen to our customers (i.e. the recruiters), they say that the case-method is ineffective at providing the necessary fundamentals. More than that, they see us as “arrogant” and think we should “tone down the egos” and stop behaving so opportunistically when it comes to managing our careers. In addition, the feeling is growing that the “HBS brand” is less and less worth the salary differential it claims over competing B-Schools. In other words, most recruiters just want MBAs that are “good enough” to do the job. And as the quality of graduate and corporate education increases world-wide, those MBAs are now a dime a dozen.

This bears a name. This is called being disrupted. I can envision a case starting with “Erik Petersen, recent HBS grad, was pondering over his dramatic career situation. The jobs and HBS image in the market had been strongly affected in the past few years, and he was trying to figure out what could be done about it.” This case would be taught during McKinsey’s mini-MBA, and would explain the demise of HBS by using Profs. Chesbrough and Christensen’s BSSE framework of disruptive business models. We are not a case yet, but we could become one soon. This is really happening. Now the question is why.

The answer may come from the very fact that HBS is so good at what it does. As it attracts brighter and brighter students, with increasing ambition and higher opportunity cost, it moves progressively up-market, therefore increasing further its attractiveness for the elite applicants. In the short term, it is just perfect. But in the long-term, the downside of this virtuous cycle is that fewer and fewer companies can afford the salary and career ambitions of the graduates. The successful application of HBS strategy is leading it to, insidiously, overshoot the market as history proves it. Core recruiters went from operational companies to consulting and I-banking and then to VC/PEs and start-ups. We are now captive of those very top recruiting segments. When they sneeze, we get a cold. When they crash, we have to hit the pavement.

But what about our differentiation, then? Aren’t we supposed to be the “crŠme de la crŠme?” Sorry to be so straightforward, but most firms just don’t care. Maybe top consulting firms and I-bankers still value luxurious MBAs (for how long?), but most other firms just want a competent person, honest and loyal, who will do a fair job for a fair salary. In other words, they want value for their money. In this context, HBS “opportunistic sharks” just cannot compete.

We have read too many versions of this story, each time wondering howthey could have let it happen. Now this is happening to us, and the question is how to avoid being one of those top organizations that just went bad because they did not understand the game was changing. So, what should we do?

As usual, part of the responsibility belongs to the administration. With LCOR and BSSE thinkers around (Profs Chesbrough, Christensen, Tushman), it should be easy to design and implement an action plan to be back to #1 on the recruiters’ list. The performance gap is clear, and so is probably the strategic and organizational diagnosis. Motivated ECs could even focus their papers or ISR on the topic, and would provide the necessary “internal outsider” perspective.

But we, students, have also to do our part. And it comes back to what this school can be the most proud of: I mean Leadership. To me, a leader is someone who stands for higher values, higher purpose even if it requires forgoing short-term benefits. In other words, it is everything but an opportunistic shark. The HBS acceptance letter talks about leading as a privilege. Now more than ever, when organizations accept our joining them, they are making us the highly precious gift of making us part of their destiny. We should be nothing but grateful for that.

As we begin our job search in a tough economic world, maybe the time has come for us to reflect on what we want our lives to be. You’ll maybe agree with me (and others…) that what matters is not so much what the world can do for us, but what we can do for the world. Because it is on this contribution, much more than on our personal wealth or benefits, that our lives will be judged.

October 21, 2002
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