What’s New At Chicago Booth? Plenty

SINGLE BIGGEST SURPRISE AS DEAN: NO EMAILS FROM MBA STUDENTS

“Here, that’s really not an issue and our flexible curriculum is a big asset for the school. Everybody does LEAD (Booth’s leadership development initiative at the start of the MBA program) but other than that you pick your classes and the pathway you want to take. If you want to do accounting later or earlier, you can do that and I think that flexibility is a massive benefit. It really fits in well with students and their notion of wanting to own their own curriculum and their own path. So that is less of an issue. I don’t have students coming here and complaining, ‘Why do I have to do A, B or C when I already have expertise in a subject?’”

In fact, he says, the single biggest surprise in his new job is that he no longer gets emails from students. “This is very much a culture of this is the way stuff is, let’s get it done and let’s move on. There isn’t this idea of let’s escalate it and make a big issue out of it here. Students are very professional here. They want to study hard, get their degrees and move on. There’s much less of all the ancillary things that can suck up a lot of time.”

In the near term, Rajan has set his sights on a number of objectives, including the launch of  $75 million fundraising effort devoted entirely to MBA scholarships. He acknowledges that there is something of an arm’s race among the top schools for highly qualified women candidates. “Today, we’re at 42% which is a high for us, but the scholarships you have to give are pretty substantial. We have an endowment but it is not that big. So we want to launch a big scholarship campaign starting in the fall. With the capital campaign, donors have a very clear preference on what they want to give to and we have a long ways to go on the scholarship part. it seems a natural thing for us to do. I would like to raise $75 over the next two or three years. We want to get a couple of key gifts and then use matching money from it to get the scholarships going.

‘THE MBA’S ROI HOLDS UP PRETTY WELL’

“If the undergrad major works out really well and we’ve increased the faculty to meet the demands of that major, that will be a success,” he says. “I want to do a little bit more in marketing right now to increase the size of our faculty there, to get the endowment up, to finish the scholarship campaign. We are also looking for a new facility in London because we are leaving that in 2020. This building and Gleacher is now at capacity. On Saturdays, Gleacher is just completely packed.”

Rajan believes that online MBA offerings could have an impact on Booth, particularly on its part-time MBA programs as more highly ranked business schools get into the market, including the recently announced decision by the University of Michigan’s Ross School to launch an online MBA next year. “If you are Stanford and all you do is the full-time MBA, online is not something you care about. They don’t have to worry about the person who decides between part-time classes and online. Over time are more schools of Michigan’s stature going to be offering online programs? At what point does that become credible enough that we start to lose full-time students?

“Right now, we have a large part-time program in the Gleacher Center downtown. It’s one of the biggest assets we have. All the evening classes are done there and many MBAs live downtown and more and more they take classes with the evening students. We love students who do an afternoon class here and then an evening class at Gleacher with the part-time students. That has become a massive asset for us as well. So even though the evening program has shrunk compared to what it was 20 years ago, the full-time students often take classes there.”

‘AS LONG AS WE KEEP CHANGING AND MORPHING, WE WILL BE FINE’

Not surprisingly given his position, Rajan remains a strong advocate for the MBA’s value to an individual. “The MBA value probably isn’t what it was 20 years ago but it is still high. Certainly, if you go to the top schools, the ROI holds up pretty well. If you think of it in terms of the payback period, it used to be two and one-half years and now it is four years. But if you think of it as the last degree you are going to do in your life, and you will build on that for the rest of your life, it holds up very well.”

While applications at Booth slipped by 8.2%, causing the school’s latest international contingent to fall to just 30% in the Class of 2020, Rajan says the greater concern over the decline is over the long-term outlook as opposed to this class given the depth of quality in the applicant pool. “The class that just started has the lowest proportion of international students we have had in quite awhile,” he says. “It reflects a decline in international students and that has been true industry wide. But it is very country specific. There are some countries where you just don’t get applications because they (students) know that if they get admitted the chances of getting a visa are not that great. And even if they get a student visa, the chances of getting a job are relatively low.

“And there are other countries where if the student’s plan is to go to Booth and return to their home country they are still happy to come and do it,” adds Rajan. “So we are still seeing students from such countries as Japan and Chile, but certainly from the Middle East, Russia, and places like that we are not seeing that many applicants any more. So the pool is definitely not as broad as it used to be. At the end of the day we still end up with the right number of students and the metrics are all great. but you do worry where does this go next year. If the international tensions keep persisting and the visa problems get bigger that is something you have to worry about.

“Where it becomes an issue is the hollowing out in the middle. Students feel that if they get into an elite school then it is worth doing. Otherwise, they ask why would I give up two years of compensation to go into a second-tier program? MBA programs have changed to give students what they need for the jobs they will be doing. Twenty years ago you wouldn’t have imagined getting the data skills and Python programming you get today. As long as we keep changing and morphing and having the curriculum go where it needs to go, we will be fine.”

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