What’s wrong with Wharton? That was the question posed by the Wall Street Journal last week, and I want to offer an answer.
I am not a stereotypical Wharton professor. I don’t know what EBITDA stands for, let alone how to pronounce it. I don’t follow the stock market. And I’ve never aspired to be Donald Trump’s Apprentice.
When I joined the faculty in 2009, I was deeply ambivalent. What will an evil empire think of my research on giving and helping others? Will organizational psychology have any legitimacy in a world dominated by cash flows and markets?
Many colleagues asked me what I was thinking. One even called me a glutton for punishment, because I’d be the guy studying altruism in the temple of greed.
By the end of my first day, it was clear that these stereotypes missed the mark. Sitting in my classroom was the most diverse and impressive group I had ever met. In the four years since, I’ve had the honor of learning from students ranging from a half dozen Navy SEALs to a pair of Olympic silver medalists to an MIT-trained engineer who left NASA to found a circus in Asia and became the artistic director for Cirque du Soleil.
I quickly realized that Wharton stood for more than finance. So if finance wasn’t the common denominator, what was it?
A clue came when I met a professor who taught a case about the meteoric success of Apple. He quickly discovered that our students weren’t content to idolize Apple. They wanted to know whether what made Apple successful would work in another company, in another industry, at another time, in another country. They wanted more data points. They wanted randomized, controlled experiments to test the practices that worked, and careful statistical analyses of when and why.
The defining feature of Wharton is a belief in the power of evidence. Instead of studying one lucky company’s success, our students are motivated to adopt a data-driven, analytic approach to understand what makes most people and organizations successful most of the time, and how they can apply those ideas to their own organizations. Of course, this holds true in finance, where Jeremy Siegel is known as the Wizard of Wharton. But the same empirical rigor is applied to topics ranging from innovation to negotiations to marketing to leadership.
The number of students heading to finance jobs is far smaller than I expected. Of the 98% of MBA students seeking employment who graduated with job offers, 96% accepted offers. Among that group, 30% joined consulting firms, compared with only 13% in investment banking (down from 18% in 2012 and 26% in 2008). Just as many (13%) joined venture capital and private equity firms, and almost as many students landed offers in tech (11%)—not only usual suspects like Google and Facebook, but also startups like Box, ZocDoc, Etsy, and SoFi.
The most notable trend, though, has been a spike in entrepreneurship. In the last six years, the number of MBA students starting a business upon graduating has quintupled, from 1.5% to 7.7% today. By comparison, 7% of Harvard MBA graduates start businesses, and at Stanford—the school known for entrepreneurship—the figure is 13%. Since Wharton’s class is more than double the size of Stanford’s, we actually have a larger number of entrepreneurs: there are about 50 Stanford MBAs starting businesses, compared with more than 60 at Wharton. This has made Wharton an excellent place for students to meet cofounders and begin collaborating on potential startups. And research suggests that when entrepreneurs work together in business school and go on to launch companies, their teams are more stable and they have higher rates of success.
At Wharton, more than a third of startups are in tech, and nearly half are in financial services or travel and hospitality. In most cases, their competitive advantage is data. It’s been exhilarating to watch our recent graduates use analytics to transform the industries that they enter—and find creative ways to improve the lives of others.
In my first class, an MBA student named Neil Blumenthal mentioned offhand that he was interested in glasses. A few months later, in 2010, after working with the Wharton Venture Initiation Program, Neil became the cofounder and co-CEO of eyewear company Warby Parker, which brought in $25 million in revenue last year, is on pace to double that this year with 300 employees, and has given away a pair of glasses in the developing world for every pair sold. Led by four Wharton MBAs, the company has an entire data science team that analyzes customer needs, price points, and social media strategies, and churns out infographics to share data with customers.
The following year, while taking an entrepreneurship class, Keya Dannenbaum was assigned to create a startup idea. She came up with ElectNext, a nonpartisan election website that uses data to recommend political candidates based on voter preferences, and has been acclaimed by leading Democrats and Republicans. Under Keya’s leadership as founder and CEO, ElectNext has raised more than $1 million and made deals with the Washington Post and PBS NewsHour.
A year later, Matt Pohlson cofounded Omaze, a sweepstakes that gives people access to once-in-a-lifetime experiences with celebrities while donating money to their favorite causes. Winners have gone backstage with Lady Gaga, played paintball with Navy SEALs, and done personal style sessions with E!’s Fashion Police, and last week, they raised more than $1.5 million for Breaking Bad star Aaron Paul’s anti-bullying charity. Matt and his team have used data on motivation and persuasion to optimize their fundraising campaigns—and to convince luminaries to partner.
Around the same time, David Klein, Mike Taormina, and Jessup Shean cofounded CommonBond, which is lowering the cost of higher education by connecting students with alumni investors to finance their loans. I was thrilled to learn that they just raised $100 million.
The focus on tech and entrepreneurship isn’t new. Wharton is the world’s oldest collegiate business school, and the founder, Joseph Wharton, was an entrepreneur in mining and manufacturing as well as education (he was a founder of Swarthmore too). Since then, Wharton alums have founded Paypal and Tesla Motors, CBS, Half.com, QVC, Cisco Systems, H&R Block, CVS/Caremark, Franklin Mint, Seventeen magazine, TV Guide, J.D. Power & Associates, and Vault.com. They also hold senior leadership roles at tech companies ranging from LinkedIn to Google to Oracle.
It turns out that I’m not alone in my enthusiasm for understanding how people and businesses can make a difference. Last month, roughly 40% of the new Wharton MBA class signed up the info session for the Social Impact Initiative, which drew so many students (200+) that it was standing room only. Students who are interested in finance are increasingly seeing it as a vehicle for helping others—through impact investing, social impact bonds, and urban development—and a group of students recently launched a Social Venture Fund.
On the faculty side, we have more than 160 professors outside finance, bringing evidence to a wide range of questions with great social significance. We have professors studying how to reform healthcare and fix Social Security, how companies can contribute to the developing world, and how to prevent war and convince people to care about others. Much of the research is also useful on an everyday basis—my colleagues have taught me how to develop emotional intelligence and be engaged at work without sacrificing family or health, how to make ideas contagious, and how to override guilty pleasures like eating ice cream and watching Last Action Hero in favor of consuming more leafy greens and reading A Tale of Two Cities.
I’ve noticed that the focus on data doesn’t come at the expense of fun and enjoyment; our students put on comedy shows and go on treks to Patagonia and Antarctica. Many of those who are excited about tech and entrepreneurship are spending a semester at Wharton’s satellite campus in San Francisco. In the most recent survey, 97% said they would recommend Wharton to interested colleagues, and just eight students reported that if they could travel back in time, they wouldn’t do their MBAs at Wharton again. They report that the highlights of Wharton include the learning experience, the peers, the social activities, and the job and internship opportunities. The data show that student satisfaction has gone up consistently in each of the past three years. So if our students are getting happier, why is the number of applications falling?
I think Wharton has an image problem. “Wharton over the past century built its reputation as a training ground for Wall Street titans, but the financial crisis closed off many paths to such careers,” the Wall Street Journal article declared, and “applicants say Wharton has lost its luster as students’ interests shift from finance to technology and entrepreneurship.” Despite the dramatic shift in the student body, the outside world still pictures Wharton as churning out Wall Street tycoons like Gordon Gekko.
By contrast, in a survey, our MBA students defined the Wharton brand as representing a data-driven approach (86%), a diverse student body (85%), renowned faculty researchers (81%), an environment that is both dynamic and stimulating (81%) and collaborative and supportive (78%), and a place that prepares students for professional success (78%). When asked to rate the skills that they developed at Wharton, our MBA students put four at the top: quantitative skills (77%), oral communication (76%), working in teams (74%), and leveraging business to have an impact on social good (67%).
What will it take to change our image to better reflect these features of Wharton? We might need to share more stories about alumni doing interesting things outside of finance. Maybe we should be doing targeted outreach to applicants who are excited about an education that emphasizes data, evidence, and analytics. Perhaps we should be differentiating ourselves more in the market, such as by offering an accelerated one-year MBA program for “career enhancers” who plan to stay in the same field, but introducing a new three-year MBA program for “career switchers” who would like more time to explore multiple career paths, do multiple internships, and learn the fundamentals of a discipline. Or it might just be time to extend our data-driven approach to the outside world, and seek your input. What would you do to rebrand Wharton?
Recently, facing growing recognition of the branding issue, Wharton administrators decided to create a new tagline. Instead of just relying on a few arbitrary opinions, they launched a full-blown innovation tournament, where stakeholders across the school were invited to submit their ideas, with votes and ratings to determine the finalists. My submission was Wharton Means Business.
Although it didn’t win, I still like the double meaning. Beyond implying that Wharton is synonymous with business, it highlights that we’re serious about doing business right—helping people make wise decisions based on data rather than intuition alone.
If our branding doesn’t improve, we might as well choose the tagline suggested by my wife, in homage to Dr. Seuss:
Wharton Hears a Who.