MBA students: Destined for high-flying careers

Where are MBA students heading after they graduate? Amy McLellan looks at three key sectors

Published: 19 April 2007

MANAGEMENT CONSULTANCY

This is one of the standard destinations for MBA graduates. In fact it's possibly the career for which MBAs, with their rounded skillset, grounding in case study technique and knowledge of the latest management thinking, are most suited. Many business schools report around one-fifth of their graduates are heading into the field.

"Over 20 per cent of our class of 2006 went into management consultancy," says Clare Hudson, director of Manchester Business School's career service. "The market is healthy, especially energy, pharma and high-tech consulting."

Simon Tankard, careers director at Saïd Business School in Oxford, sees technology consulting on the rise, particularly among firms working in the emerging markets of India and China. He adds, however, that this is still a market dominated by big names such as McKinsey, Bain, Accenture, CapGemini and Deloitte.

It's also a booming market, last year generating revenues of £8bn in the UK. Business schools report that consultancies are keen to hire MBA graduates, with the big firms recruiting in volume.

Ernst & Young is typical, having grown its consultancy division from 25 people to 250 people in just 18 months. "We will probably double in size again in the next two years," says Ben Castell, a partner in the group's advisory services business.

Castell says this growth is driven by the competitive pressures companies face in increasingly globalised markets. "They have cost pressures so they don't want to increase their internal head count, but they want to bring on board people who have faced similar challenges; people who have been there and done that," he says.

Management consultants don't tend to get a good press. They are often brought in to make unpopular decisions and are sometimes judged to be out-of-touch or arrogant. Castell dismisses this. "If any of our hires were arrogant they wouldn't last five minutes," he says. "Our clients wouldn't put up with it."

For those looking for a career in management consultancy, an MBA is well-regarded and business schools have a good track record of grooming students for the often gruelling interview and selection process.

Graham Hastie, careers director at London Business School and a McKinsey consultant for seven years, says the business school has re-engineered its MBA programme to include more problem-solving to make sure its graduates can hit the ground running as fully-fledged management consultants. "We also run very detailed preparation sessions about how to get a job with particular firms, including case study interviews and thousands of mock interview sessions," says Hastie.

FINANCE

The good times are rolling in the Square Mile: the stock market has performed well over the past year, M&A activity is on the rise and last year bonuses paid to the City's financial elite topped £8.8bn, with 4,200 high-fliers pocketing more than £1m each. Recruitment is increasing and, given the scale of the bonus bonanza, there is no shortage of candidates.

Manchester Business School has seen a significant rise in the number of its MBAs joining the industry, from 17 per cent in 2005 to 36 per cent last year. "We know from the increasing numbers of students doing internships in the financial sector that this trend will continue," says MBS careers director Clare Hudson. Around 40 per cent of the MBAs at London Business School went into the finance sector.

Yet while an MBA can give candidates the edge in investment banking and corporate finance, it doesn't necessarily open doors into what have become the hottest games in town: the big money world of private equity and hedge funds.

"There's a lot of activity and energy in hedge funds and private equity but they are not large recruiters of MBAs," notes Simon Tankard, head of the careers service at Saïd Business School in Oxford.

The careers service at Chicago GSB reports a similar story, with demand for jobs in private equity heavily outstripping supply.

Private equity and hedge funds tend to be a lot smaller than the big institutional banks: they are not recruiting in large numbers and need people who have a wealth of experience. Often a generalist MBA does not fit the bill, which is where a specialist masters qualification can come in handy.

"The MSc people will have the edge on people doing the MBA," says Dr Boris Porkovich of the International University of Monaco, which offers an MSc in hedge funds and private equity. "The more specialist you can get, the better chance you have of getting a job in this niche." Within three months of graduation last year, a record 99 per cent of London Business School's full-time masters in finance students had found a job.

Other institutions to offer specialist finance Masters include Saïd (Masters in financial economics) and Cass Business School (a wide range, including investment management).

However, those working in the alternative investment world believe it's a proven track record that counts. "Most hedge funds would be indifferent to whether or not you have an MBA," says one hedge fund insider. "If you can demonstrate you can make money you will get hired ahead of any type of degree."

And the new world of alternative investment is throwing up other opportunities. As Saïd Business School's Simon Tankard points out, private equity firms are looking for people to manage the ailing firms they turn around. "They see us as a source of talent for those companies," he says.

ENTREPRENEURSHIP

As Dragon's Den, the BBC 2 hit demonstrates, there is no shortage of aspiring entrepreneurs . It's a career destination that is also proving popular among MBAs. At Saïd , for example, around 80 per cent of would-be MBA students express an interest in starting their own company. And one in 10 MBA graduates leave to start their own companies with many more launching a start-up within two to three years of leaving business school.

In response to student appetite, most MBA programmes now include compulsory entrepreneurial modules plus the opportunity to take entrepreneurial electives, in subjects such as start-up finance. Business schools also run extra-curricular activities that put would-be entrepreneurs in touch with useful contacts.

At Saïd, for example, there is a rich cross-fertilisation between innovators in Oxford University's science and technology faculties and the business acumen of the business school students, with both sets of students regularly attending out-of-hours workshops and seminars.

Fiona Reid, Saïd's director of entrepreneurship, doesn't believe that entrepreneurs are born. "Entrepreneurship is a question of attitude rather than personality and the right attitudes, seeing problems as opportunities for example, can be encouraged," says Reid. "The key starting point is the ability to evaluate a business opportunity by doing things like cash flow modelling and market research, and these are things that are taught."

She adds: "A good idea is just 5 to 10 per cent of a company. The really rare skill is to operationalise the idea, and that is something the MBA gives you."

This spring, however, Oxford lost to Cambridge in a Varsity Pitch competition, judged among others by Martha Lane Fox and Dragon's Den's Peter Jones. The £5,000 winning team, TouchSight, from the Judge Business School, developed a mobility aid for the blind and visually impaired.

MBAs start a wide range of businesses. Consultancies are popular, as are start-ups in IT, technology and bio-tech. Social enterprises - businesses designed to make a profit and have some positive impact on society - are also on the rise. MBA graduates of HEC in Paris, for example, are behind environmental consultancies Becitizen and EcoAct.

An MBA provides the skills, confidence and contacts to launch a new business. Chris Crockford had what he calls a "small hobby company" but an MBA at Lancaster University Management School took things to a different level.

"The MBA exposed new opportunities and gave me the ability to see the market potential," says Crockford, whose firm, Easily LED, provides energy-efficient LED lighting for the film and TV world. He says the networks you can tap into at business school can make a real difference. "It's really useful to talk to people from different backgrounds, who have years of experience and can look at things from other industry perspectives."

'In management consultancy there are always fresh challenges'

Former army officer Keith Litster is an MBA graduate of Edinburgh University Management School and now works as a management consultant with Deloitte.

After 12 years in the Army, I felt I needed to do an MBA to translate my skills into the business environment. I felt the MBA would also give me credibility with employers and show them I understood business speak and the latest management thinking.

I wanted to go into management consultancy because the lifestyle and type of work are quite similar to Army life in that you only spend a maximum of two years in a role before you are moved on. In management consultancy there are always fresh challenges and steep learning curves.

It's a good time to join the industry. It was only a week before my dissertation was due that I thought about getting a job. I got in touch with a recruitment agency and they had an interview lined up for me within a couple of weeks.

'I wanted to set up my own hedge-fund company'

Andrew Irvine is studying for an executive MBA with Chicago GSB in London and runs Tusk Capital Management.

I wanted to do an MBA because I wanted to set up my own hedge fund company. I had been working for various banks trading financial instruments, so it meant my role would be changing from a technical background to one where I would need top level and all round management skills. I also wanted to get plugged into a great base of intellectual capital and use the networks.

I'm finding it very helpful. I'm on campus one week in every six. It takes me out of the market and gives me a different perspective. I can apply the case studies to real life situations as I'm building my firm. When it comes to recruiting people in the alternative investment world, I think an MBA does help because it's a form of third-party due diligence. But its credibility depends on which business school it comes from.

'Once you have worked for yourself it's very difficult to go back'

Serial entrepreneur Stephan Bisse is a graduate of Saïd Business School in Oxford and runs technical trading systems company Key Reversal Ltd.

I worked in the City for about 10 years and then started a dotcom that went into liquidation when the bubble burst. That was when I decided to do an MBA to broaden my options rather than just going straight back into the City. I was interested in setting up my own business because once you have worked for yourself it's difficult to go back.

While I was at Saïd, the opportunity came up to develop a software product for the technical analysis of financial markets. The MBA was really helpful because I realised when I was running the dotcom that I was a specialist in a very narrow area but I didn't know anything about accounting or organisations.

Oxford is full of entrepreneurs and Saïd is something of a magnet for them. I'm now involved in two other businesses set up by Saïd MBA graduates.

Interesting? Click here to explore further