(Crain’s Chicago Business, 22 March 2004)
Here’s a success story that Northwestern University and the University of Chicago don’t want you to hear. When the new owners of Schaumburg-based Wellmark International needed a president to lead the insecticide company purchased in 1997 from Novartis AG, they tapped an executive who’d climbed the ladder through a series of mergers and acquisitions that formed the company.
Kay Schwichtenberg had the right skills for the job: knowledge of the business, marketing experience, drive and an MBA — from the University of Illinois at Chicago. Her degree, earned in 1984, came at roughly half the price of an MBA from Northwestern’s Kellogg School of Management or the U of C’s Graduate School of Business.
Elite business schools like Kellogg and U of C — currently ranked No. 4 and 9 in the nation, respectively, in the latest U.S. News and World Report guide to business schools — contend that the connections and cachet that come with a degree from their programs are a ticket to the top.
Indeed, members of Kellogg’s 2002 MBA class received starting salaries ranging from $36,000 to $200,000, according to the school’s career placement office. The median starting salary for similarly experienced University of Chicago MBAs was $85,000, plus a typical $20,000 signing bonus and $30,000 in other compensation; 80% of these graduates secured their jobs through school connections.
The pitch works. More than 6,000 candidates sent $200 application-fee checks to Kellogg in 2003 to compete for one of roughly 550 places in its one- and two-year MBA programs.
But it’s possible to build a first-rate career with a less-than-gilt-edged MBA, as Ms. Schwichtenberg’s experience shows. Not that she didn’t go for the gold. She applied to Northwestern and UIC, but landed on Northwestern’s waiting list. She went with UIC.
She was unusual. Many of her fellow students at UIC didn’t bother to apply to schools like Northwestern, figuring they wouldn’t be accepted.
“There were a lot of first-generation-American students at UIC with me,” recalls Ms. Schwichtenberg, 51, who isn’t a first-generation American. “They knew what working was like. It was a very hard-driving, aggressive, knowledgeable student base.”
Aside from the networking and hiring opportunities, U of C sells its program as a second-to-none academic experience. “There are some aspects of the academic experience that we offer . . . that I have not seen at any other place,” including a faculty with six Nobel laureates, says Don Martin, associate dean for enrollment management at U of C’s graduate business school.
Still, programs a few notches down on the prestige scale are many executives’ only option. Enrollment at U of C and Kellogg is fiercely competitive. And the price tags put these schools beyond the reach of many.
“My decision was strictly economics-driven,” says James Hussey, who entered UIC’s MBA program in 1982, a few months after getting his undergraduate degree in pharmacy. “I wasn’t interested in going into a lot of debt to get the graduate degree, and I didn’t have anyone to pay for it.”
For Mr. Hussey, the MBA provided the business-side preparation he lacked, and it sent a signal to potential employers. “I wanted to be on the business side of either a big (drug company) or a biotech, (so) I needed to have the MBA as a stamp that I was a business guy, not a pharmacy guy,” he says.
After graduating, Mr. Hussey got a job at Bristol-Myers Squibb Co., where he worked for 11 years. He doesn’t know if he ever beat out a blue-chip MBA for a job. But that’s not to say it hasn’t happened. “Bristol-Myers hired me. Maybe I was different because I had a science background,” Mr. Hussey recalls. “They liked the pharma/MBA combo.”
After Bristol-Myers, he started his own company, and in 1998 became president of NeoPharm Inc., a $500-million-market-cap biopharmaceutical company in Lake Forest that develops cancer treatment drugs.
Not always a good fit
Jack Rooney, CEO of Chicago-based wireless phone company U.S. Cellular Corp. — and a 1969 Loyola MBA graduate — doesn’t believe he’s been held back by the fact that his MBA isn’t from a top 10 school. “An MBA opens the door for you. And maybe (a Kellogg or U of C degree) opens more doors for you quickly,” he says. “But once the door is open, it’s what you do (that counts).”
Mr. Rooney, 61, has worked for Pullman Industries Inc., Firestone Tire & Rubber Co. and Ameritech Corp. He says his MBA helped him ride out many mergers and acquisitions. “You had a check mark next to my name that said, ‘This guy has got ambition and he’s educated,’ ” he says.
Richard Driehaus, founder and CEO of Driehaus Capital Management Inc. in Chicago, earned an MBA from DePaul after five years of study in 1970. He maintains that his innate business acumen and his work ethic, rather than his degree, have made him a success. “You can graduate top of your class and not make money in the market,” he observes.
Mr. Driehaus, 62, was nearer the bottom of his class after he transferred from junior college to DePaul’s undergraduate business school. He was the last in his class to get a job. Today his firm manages about $2.6 billion in assets.
Mr. Driehaus says he’s hired MBAs from blue-chip schools, but it hasn’t always been a good fit. “Sometimes, they don’t work out,” he says. “Investing rewards patience,” he explains, and he says some of these hires have been extremely bright but impatient people, eager to get to the top fast.
But what about those connections that only an elite school offers? Many executives interviewed for this story say they didn’t miss them, since they were already well along in their careers when they entered grad school.
When Ron Daley, now CEO of Oce-USA, the U.S. division of a Dutch digital document management company, started taking MBA night courses at Loyola in 1978, he was 31 and on the management track at R. R. Donnelley & Sons Co., the Chicago-based printer where he’d started as a proofreader at 17.
He wanted to distinguish himself. “I was just one guy of many, and I’m African-American,” says Mr. Daley, 57. “In the business world, I needed every edge.”
©2004 by Crain Communications Inc.