10 Years Later: How Columbia Business School Weathered The Financial Meltdown

PROFITING FROM LOSS

Of course, not everyone got burned during the financial crisis. Just ask Bruce Greenwald, the Robert Heilbrunn Professor of Finance and Asset Management at Columbia. Nicknamed the “Guru to the Wall Street Gurus,” Greenwald views the events of 2007-2009 in a more upbeat light. Taking the long view, Greenwald notes that business cycles are self-correcting. With that, he tells P&Q, there were openings for enterprising graduates to “clean up after this mess.”

“The alumni I know in particular, they were excited,” Greenwald explains. “There were wonderful opportunities to make money. They had been reasonably cautious going into it, so they were in good shape. I think my students made quite a lot of money in the crisis.”

The benefits, he adds, extended to Columbia Business School. Noting that recessions typically bring more applicants to business schools, at least as an institution, Columbia was better positioned to ride out the financial meltdown. “We’re a business that turns down six out of seven customers. In a time of crisis, people see it legitimately as a time to go back to school. For us, it was no problem at all.”

MBA STUDENTS STILL IN SCHOOL FELT AS IF THEY WERE IN ‘A REAL-TIME LABORATORY’

Hussain was a second year MBA during the darkest days of 2008-2009. Despite the televisions in Uris Hall blaring the bad news every day, Hussain took a certain comfort in watching the events unfold at Columbia. For him, the classes provided context, a perspective on what was actually happening and its magnitude. He describes his time at Columbia as “a real-time laboratory” – a front row seat to market drivers and a place where he could listen to talks from decision-makers like Jamie Dimon and John Thain.

“We were removed in a sense and could observe what was going on,” he explains. “We were able to look at all the moving pieces and what was happening to see how things were progressing. We also have amazing classes. We had Dean Hubbard, who is a tremendous economist along with a lot of great professors. We also had a lot of practitioner professors, like the CIO of a major hedge fund. I remember taking a Securities and Analysis class and it was in the midst of everything happening. Literally every class, we would get an update so you would approach it from more of an analytical perspective.”

The meltdown also provided an opportunity for Columbia Business School to deepen their ties to MBA alumni. Knowing that alumni were facing unprecedented career disruption, the school reached out to former students, offering an array of resources and support services.

That started with extending graduates access to their COIN portal, the campus recruiting platform where they could access recruiter contacts, alumni decision-makers, networking and job hunting research, and just-in-time job openings. In addition, Resnick invited them to contact her advisors to update their resume, start career coaching, or put them in touch with various decision-makers.

A TIME TO MAKE SENSE OF IT ALL

We made time for high touch,” Resnick says. “I remember this being a time of the community coming together. It was essential for them to hear from us.”

Sure enough, alumni took Resnick’s team up on their offers. Her office witnessed an “uptick” in alumni using their services. Fortunately, says Resnick, the school had equipped students with skills targeted to the long haul instead of just the first job. As a result, alumni came back seeking tweaks here-and-there…along with a supportive ear.

“Sometimes, people need talk to get perspective,” Resnick observes. “For some of them, it was a shock to leave an organization where they’d had an allegiance. Many times, it was having a conversation to process what happened and think things through. What could some of the eventualities be from this? What were the next steps? A lot of these students were exceptional to begin with. To get jobs at these firms, the bar was high. So a lot of them were already pretty resourceful. They didn’t require a lot of hand-holding. It was more of an opportunity to process and have someone help them fine tune their ‘marketing materials’ and be thoughtful with how they presented themselves.”

STUDENT SUPPORT COMES INTO ITS OWN

The CBS alumni reciprocated this support with students. Take the school’s Board of Overseers, a diverse and accomplished body that supports the university. In 2009, Resnick tapped into this group to host lunch roundtables with students. In doing so, they providing both expertise and networking to students scouring a recession-riddled marketplace for jobs. Another outgrowth of the financial meltdown was CMC Coaching. Already in its nascent stage when the big banks were reeling, the program now features 30 practitioner alums, who put in long hours to coach MBA students. This group was also supplemented by CBS’ traditionally robust Executives in Residence program, two dozen members strong, whose experience offers guidance and reassurance.

These programs have only grown since the meltdown. In fact, these experiences helped spur CBS’ recent decision to combine the career management and alumni relations offices under Resnick. With a larger staff, Resnick’s team has been able to support alumni through transitions. In turn, the department’s services are being increasingly employed by alumni, who appreciate the counsel they receive long after they graduate.

Alumni weren’t the only ones getting into the act. In 2007, Resnick had also formed the CMC Career Fellows. Started with 20 2nd-year students – which has since tripled to 65 – the fellows’ program enable the center to provide another layer of support for 1st-years in terms of skill development, career guidance, and networking.

TECHNOLOGY RISES AND MARKETS FRAGMENT

Such efforts have paid dividends long for MBA candidates long after the financial crisis passed. “You don’t want to just do these things in a bad market as a reaction,” Resnick says. “You want to understand that there will be market cycles – good and bad times – so you want to have support systems in place for your students.”

That came in handy for Hussain, who calls his job search a “year-long process to get my foot in the door” after Bear Stearns imploded. “My classmates helped me think through how to prepare and professors, who had relationships with folks at Blackrock, were able to make introductions to Blackrock on my behalf,” he says. “Also, the career center, as I was going through the interview process, introduced me to an alum at Blackrock who gave me great advice on the firm. There was a happy ending, but it took a good amount of effort.”

Looking back, 2008 almost feels like a different life for Resnick. From specific industries to best practices, the world has been disrupted like never before. According to Resnick, the financial meltdown coincided with the rise of technology, not to mention a real shift in the MBA job market – an ongoing series of fluctuations that seems to only accelerate instead of stabilizing.

“What has happened more recently is there’s more fragmentation in the market,” says Resnick. “At one point, firms were hiring 40 to 45 students. They still hire, but in smaller numbers and for different jobs.”