As MBA students go, so goes the nation. Business school students have always been good barometers of business fashion. If it's hot, students flock - investment banking and consulting in the 1980s, high-tech startups in the 1990s, and now banking and consulting as the pendulum swings back again. MBAs studiously follow the herd, and the last few years the herd took them off a cliff.
"It's been a wild ride - people graduating in 2000 got caught up in the Net just as it was tanking," says Laurent Berman, co-founder of Silver Beacon Technologies and a member of the Harvard Business School class of 2000. Students graduating last year watched the Internet Economy peak within the space of their two-year education. Many jumped wholeheartedly into dot-coms only to watch them quickly sink.
As a result, the mood on campus is more cautious than it was a year ago. "There's less interest in joining small startups," says Erik Barmack, a second-year MBA student at Stanford University (dossier)'s Graduate School of Business. "Many more people are interested in going into consulting, banking and old-economy companies than they were 12 months ago." Anna Lorch, a second-year student at the Owen School of Management at Vanderbilt University (dossier), says she's taking the long view: "This year it's about job security and putting in your time."
The herd instinct may be bringing MBAs back to familiar pastures, but that doesn't mean they're giving up on the new economy. Many are still going into technology, just as they did before the Internet surged. For those choosing old-economy careers, the business world they're entering is radically different than it was five years ago. Students may be going back to banking and back to consulting - the new meaning of b-to-b and b-to-c, as the joke goes - but the companies they're joining have been transformed.
Top strategy consulting firms like McKinsey and Bain now have extensive "e-consulting" practices. They've also embraced venture consulting, taking equity stakes in companies in lieu of fees and spreading any resulting wealth to recruits through equity pools. That wealth may have dried up for the time being, but consulting firms now speak the high-tech, entrepreneurial lingo that grads want to hear.
Consulting companies have changed because the worldviews of their future employees have changed. Today's MBAs are different from those of previous generations. They are far more entrepreneurial, whether they start their own companies or join the business units of traditional firms.
"The new economy has spurred a huge increase in interest and enthusiasm for entrepreneurship," confirms London Business School dean John Quelch. "That enthusiasm is not abating despite the market aberrations of the last 12 months."
