After eight years as dean of Yale University’s School of Management and a total of 20 years as the dean of top U.S. schools, Edward ‘Ted’ Snyder will leave the job this Friday surprised and perhaps somewhat frustrated by just one thing: the remarkable durability of the top seven MBA programs.
Though he led Yale SOM to its best rankings ever, getting the school’s MBA program in the top ten of U.S. News’ annual survey for four of his eight years as dean, Snyder has not been able to get SOM to rank any higher than eighth place, rank achieved in 2016. The school full-time MBA currently places ninth in U.S. News.
“The durability of the M7 schools has been a little bit surprising to me,” says Snyder, who has also been dean at both Chicago Booth and UVA Darden. “People really want to affiliate with the top schools. It’s so powerful, and it’s counter to what you see in other industries where technology is playing a big disruptive role.
SNYDER: NOT OPTIMISTIC THAT MBA APPLICATIONS WILL REBOUND WITH A RECESSION
“Every once in a while I think that Wharton has lost its mojo or Columbia has made some mistakes. When I went to Chicago, Chicago was struggling. But they eventually right the ship and there they are. You may see a school like Darden or Tuck or Haas move up there, but they don’t really stay.”
In a wide-ranging exit interview with Poets&Quants, Snyder tackles a host of topical issues, from what he believes is the single biggest factor behind the continued decline in applications for full-time MBA programs, why he is not optimistic that applications will jump in double digits with the next recession and how the business model of business education needs to change. Snyder, who will go back to teaching on July 1 when he will be succeeded by University of Chicago economist Kerwin Kofi Charles, also shares his key learnings over the course of his two decades as dean and offers advice for newly appointed business school deans.
One thing seems certain. Snyder is done with deaning a business school. All told, he has spent 23 years in leadership positions at top business schools, starting with three years as the number two person at Michigan Ross, three years as dean of UVA’s Darden School of Business, nine years as dean of the University of Chicago’s Booth School of Business, and eight years at Yale SOM.
“I don’t know what I would do with myself if I stayed in the job because it’s getting harder,” he says. “The world is moving from a really favorable spot for management education in universities toward science and technology. It’s a tougher world for deans to generate that kind of excitement that we had in the 1980s and 1990s. The mega-gifts are going to be tougher, too.” One of the most successful business school deans in history, Snyder also points to what he believes is increasing skepticism of business and capitalism, as well as the high costs of an MBA and the lower return on investment of the degree as among the reasons why business school deanships are becoming more challenging.
B-SCHOOLS ARE ‘IN A TUITION TRAP’ AFTER 25 YEARS OF ABOVE-INFLATION TUITION HIKES
“The general contretemps with business has hurt business education,” he believes. “It used to be high tech was exempt but not anymore because of the privacy issues and the dominance of Facebook, Apple, Amazon, and Google. And many of the schools have collectively marched off the cliff with these tuition increases. That has reduced some of the ROI on the degree.
“Having followed along with annual increases in tuition rates at two percent above inflation for more than 25 years,” adds Snyder, “many schools have found themselves in a tuition trap in which they cannot find a market for their programs, even after broadening their applicant pools geographically and offering substantial scholarships. Several have reduced or eliminated their full-time MBA programs, shifting to other formats with intensive modules and online components.”
It’s why he doesn’t believe a recession will result in a rebound of applications to full-time MBA programs. “I think the number one thing is the high price so I don’t see how a recession is going to have a great effect,” he says. “Schools have to stop raising the price.”
He offers praise for Chicago Booth, which along with Harvard Business School, decided for the first time not to increase MBA tuition (see HBS & Booth Hold The Line On MBA Tuition). “I think that is a brilliant move,” he adds. “It’s not because of weakness. It’s because of strength, and it’s the first school that is stepping back and saying we are not going to keep going down this path. It’s a big thing. It’s just so timely to see somebody doing that. It doesn’t indicate how the business model is going to get redone, but it is a signal that it needs to change.”
‘THE OBSERVED RIGIDITIES IN THE RANKINGS ARE BECOMING MORE RELEVANT’
But one part of the business school industry, he believes, is solid and that is the very top of the rankings pyramid, particularly the M7 schools which together from an elitist club of sorts. “The club part is very strong,” says Snyder. “I don’t say that in a disparaging way. The brands are strong. There’s a more clear and durable hierarchy of top U.S. schools. I don’t sense that those strong schools are going to go away. Yale has a chance because Yale has a big brand, and we have a very strong endowment.
“We’ve passed Columbia and Kellogg during my time and now we are number six globally, number two per faculty member and number three per student behind the unmentionables, Harvard and Stanford. But we are way behind.” As of June 30th, 2018, SOM’s endowment stood at $861 million, up from $536 million when Snyder arrived at Yale.
Nonetheless, he observes, seven U.S. business schools, Chicago Booth, Columbia, HBS, Kellogg, MIT Sloan, Stanford, and Wharton, have dominated rankings of full-time MBA programs over the last four decades. “These full-time MBA rankings are viewed by many as synonymous with overall school quality,” says Snyder.