The MBA is facing stiff competition from an unexpected quarter – masters in finance programmes.
Until quite recently if you were after a flashy career in high finance and saw a graduate degree as the best gateway into that dream job, in all probability you would have applied to a top MBA programme.
The vast majority of MIF programmes, the natural degree for those interested in financial affairs, was historically offered by second tier schools, whose brand name was much less impressive than that of a top tier MBA school. Moreover, those schools that did offer a MIF seemed in general not to care much for the qualification, devoting few resources and promotional efforts.
So when faced with the choice of studying for an MBA at a brand name school with a good recruitment record or an MIF at a lesser school with fewer resources, most candidates opted for the former. After all, it was not as if Wall Street did not hire MBAs.
Those days are gone, perhaps forever. Today MBAs face truly stiff competition from a new crop of much better endowed MIF programmes that have sprung up at top-ranked schools over the past few years. As well as being polished and enthusiastically promoted, these programmes offer extraordinary career opportunities.
Several MIF programmes now count themselves as among the most coveted and in some cases expensive educational experiences in the world. Bluntly stated, this may be the first time that the MBA has faced such serious academic competition. For the first time students in search of a top finance job may prefer a MIF, rather than an MBA programme.
Finance education has become a hot topic and the proliferation of MIF programmes is a response to market demands. The MIF revolution is simply taking care of what business schools should have done long ago. However, the financial education boom is also a tale of how many business schools have been slow to adapt and react to real-world realities.
Financial activity has been gaining in prominence and sophistication since the 1980S, but many universities and business schools procrastinated and delayed offering the relevant focused financial education. Now, with finance very much a topical subject, a social obsession indeed, business schools are waking up to the fact that for many a MIF provides a more relevant education than an MBA. The less finance-savvy an MBA programme is, the truer this is of course. A quality MBA with a high-level, in-depth finance component could still best the leading MIFs.
Schools need to catch up and catch up fast. But for some, it may already be too late.
Why has there been such a delay? Perhaps top business schools were so focused on their successful MBA programmes that they forgot to diversify. Perhaps they were trying to protect their prized MBA cohorts from non-MBA “rivals”. But it is perfectly possible for both programmes to coexist on the same campus. If anything, an MBA programme can benefit from the enhanced reputation its business school acquires when it also offers a MIF programme.
Another reason business schools may have dragged their feet over the creation of MIF programmes might be down to a lack of resources. Perhaps it was difficult for many schools to find faculty with sufficient entrepreneurial drive and the willingness to run and deliver new initiatives. Or perhaps they were entrenched in tradition and unable to countenance new initiatives. Needless to say, more flexible and fleeter-of-foot institutions were listening to the market and were able to respond.
If the most legendary and reputable business schools missed the obvious financial revolution, one wonders what other critical things they have missed. It had always been assumed, in large part with good reason, that business schools are among the most dynamic entities on campus. The finance story hints otherwise. Perhaps there is no option but to accept that many in the business education arena may be risk averse, or may lack a desire to innovate.
Pablo Triana is a professor at Esade Business School.