These students are given opportunities most people only dream of. We are exposed to leaders in our fields every day. We are blessed with a $20 billion endowment that enables nearly anything we can envision. Many of us receive tens, hundreds of thousands of dollars in financial aid. The fact that so many choose to go on to careers that do so little to give back is, in my opinion, shameful.
Are finance and consulting valuable fields or should they just be abolished altogether? Given how some of these people are paid, one can at least say that it is valuable from a monetary point of view. If these fields are indeed valuable, then who should fill the positions if not Yalies? Should state school students fill those roles because it is not beneath them to make a lot of money?
A field is either worthy or unworthy of a person's time. There's no need to say it's unworthy of a Yalie's time. To say that and then follow it with how blessed and lucky you are, makes people think you think Yalies should aspire to some higher standard that others don't have to. It's kind of arrogant.
At the end of the day, even Yalies have to eat and satisfy their material needs. It's silly to think that they're somehow immune to the desires most humans have. The Yale admission process doesn't filter out applicants based on that. It does optimize for high achievement and ambition. Given that, why would anyone really expect Yalies to avoid careers that are financially rewarding and, until recently, quite prestigious?
-Yale Alum in tech
When it comes down to it, there is more to assessing a position's value than the income figures on your tax returns. There are the products you produced, the innovations you fostered, the lives you bettered, and the individuals you saved. Not everyone is in a position, socially or financially, to effect such outcomes in their professional lives. Yalies, because of a mix of hard work, luck, and the outstanding generosity of others, are better positioned to make these positive contributions to society than almost anyone in the world. The fact that so many choose such a singularly self-interested path, one whose value is tied solely to the money they earn for themselves, is what upsets me.
With credit to Thank You For Smoking - that's the Yuppie Nuremberg Defense. Not saying that consulting/finance is like being a merchant of death, but it's really a poor justification for most things, and my eyelids twitch every time I hear it used.
One possible outlet we discussed for encouraging students to forgo careers in banking and consulting was financial aid. Suppose Yale instituted a policy that accepting financial aid required an agreement to forgo consulting and banking positions for at least 2 years after graduation. This would decrease the number of students who choose such careers "just because." Other students who intend to go into such careers would surely be drawn away to other fields during the waiting period. Of course, those who do not qualify for financial aid, and those who can afford to deny the aid they are offered, would not be affected by such a measure. This would warrant a consideration of whether the class divide on post-graduation freedom is undesirable. Then again, I don't think it would be unreasonable for Yale to say: "We are offering you the opportunity of a lifetime, an education at an amazing school you would otherwise not be able to afford. The only condition is that you must do something productive with it."
There's also the possibility of positive reinforcement as opposed to the negative scenarios outlined above. What if Yale offered additional financial aid to those who agreed to teach/do research/pursue charitable work for two years after graduation?
I would love to make things that benefit everyone and give them away for free but there's no way I'm going to do that while my family needs my productive hours to generate income.
In my time in consulting, I was exposed to people in every corporate function possible, and had the chance to see what their jobs were like. I worked for tech companies, PE firms, corporations, and government-regulated entities. I spent 6 months in growth equity and got to learn what the buy-side is like.
If I had known then what I know now, then I would have told my 21 year old self to go work at FB or Amazon or some small startup.
But the value proposition for the firm I went to was unequivocal. We will pay you a lot. The opportunities you have when you leave will pay you even more. You'll get to work with other extremely smart people. You will see a ton of industries. You will be able to go to whatever b-school you want when you're ready to apply. And if you get good at your job after a couple years, your hours will go down substantially.
But the experience I gained during my 2 1/2 years exposed me to multiple industries and I starting thinking much more "strategically" when analyzing businesses. Also, I worked with probably some of the smartest people you could assemble (less a few "odd" ones).
Also, the expense account was nice and fed me well.
I'm not sure if you're kidding or not, but assuming you're not, why do the highly educated have any greater responsibility than the less educated?
The highly educated do not owe society anything. No one should have a right to my intelligence. If I want to contribute, I can and will, and if I'm smart enough and execute well enough, I will be rewarded, both monetarily and through watching my creation create real value.
This does not mean that sacrifice and discomfort are the only ways to create value. Wile start ups are roller coasters of emotion, I can bet you that Jobs, Gates, Page et al. Have gleaned much more pleasure from their creations then sacrifice, discomfort and pain.
And the only person who can make them do anything is themselves. Larry and Sergey did not bear a responsibility from society to create Google. They did by their own choice.
75% of Yalies are normal people (the other 25% come from money). They're the children of working professionals, federal government employees, etc. They have had comfortable upbringings, but their families don't have "fuck you" money.
They've been pushed and prodded all their life by parents who, like everyone else without "fuck you" money, are desperately afraid of falling out of the middle class. Most of the kids don't know it yet, and maybe the parents don't consciously acknowledge it, but it's a major force underlying the thinking of every parent who sends his kid to an SAT prep class so he can get a high score and go to Yale.
At the same time, regular jobs suck. Thanks to the consultants, they're overly structured, have shitty benefits, and workers are managed by PHB's who don't know jack-shit about the jobs that the workers do. Upward mobility is curtailed, because many F500's prefer to hire managers from the ranks of consultants, instead of promoting people from within. The risk in potentially more interesting jobs is high: fail to make it big, and you could be stuck in a job where you get yelled at for punching in a couple of minutes late and to the extent that you're lucky enough to get health insurance, it'll be on a shitty plan. Thankfully science/tech is mercifully insulated from this phenomenon (so far), but many students don't have the particular aptitude or desire for those fields.
Maybe you're right and they were pushed into it. But it's short-term thinking and I am not going to cry when the bubble pops and leaves them holding a big sack of dead end.
And I don't think I've ever heard a kind word about management consultants. A field dominated by 20 somethings with 0 professional work experience brought in to tell executives and managers of highly successful multi-million/billion dollar companies how to run their businesses...
A question each and every person that hires a management consultant should ask themselves, "would I hire this 20 something to run my organization?" If the answer is no, then why are you paying them to tell you how to run it?
It's a bit like bringing in a random, just out of school, development consultant and giving them charge over major development teams. Oh wait, I've seen that happen too, each project then proceeded to go several times over budget and were delivered broken and late and eventually scrapped.
"why is this industry so exceptionally lucrative?"
The honest to god real reason these guys are hired, and how the system ultimately works, is for a couple of really quite bad reasons
a) The CEO ends up in a bind with no good ideas, or knows that no matter what happens, they're screwed. It could be lack of product, or a better competitor, etc.
b) The CEO doesn't want to appear weak so that people will still follow him/her while the ship sinks.
So they bring in management consultants, sold as "experts". Having a bunch of Ivy Leaguers helps with that image. The entire problem, including the blame for when it inevitably fails, is intended to go onto the Consultants. Their job is to appear busy and smart, then take the blame (and the large consultancy fee) when it all falls apart. This leaves the CEO in a good position "I brought in experts and even they couldn't make it work!".
And that's it.
That's the entire management consultancy industry in a nutshell. Blame for pay.
A great article on the phenomenon that describes a life I've had confirmed by several friends in the field who've all since gotten out: http://tech.mit.edu/V130/N18/dubai.html
(they were all also shocked at how hard it is to actually run a company vs. what their years in management consultancy led them to believe)
* Working 7 days a week (in the office for 110 hours) * Living out of a suitcase * Often living out of a suitcase in the middle of nowhere * Virtually no vacation * Expectation that you'll forfeit a vacation if the firm needs you * A lot of stress
And that's just the start of it. Plenty of people burn out and decide that the paycheck isn't worth it. Imagine that. You're making the mistake of only looking at the glamorous part of the job (the pay check) instead of actually taking a look at what the job entails.
Spoken from personal experience
First, my understanding is that the term "consultant" has become so broad that it basically just means "contractor" for intellectual jobs; it covers coding, management, business strategy, and a million other things.
Second, even if we stick to a slightly more narrow definition, consulting essentially boils down to smart people going around to existing businesses and telling them how to do their jobs better (hopefully). (Presumably, these businesses don't need the smart people most of the time, which is why they don't have them as employees.) At least superficially, this seems like an appropriate use of smart people: target them at the problems where they are needed, which are dispersed across many businesses.
Now, if finance and consulting are actually sectors that aren't contributing to society (a net drain), then there's a real problem. But if so, the fact that so many smart people are going into them to make money is just the symptom, not the problem,
I think the author did a pretty good job of explaining why she is worried, and while your two points are compelling, neither really addresses that explanation. You've got people who wanted to be artists, or public servants, or writers, or filmmakers, or non-profit workers, giving up their dreams for the sake of the security offered seductively by professional recruiters. That's a trade off for them, and perhaps liable to elicit a general shrug, but it's hardly a radical position to view so many making that trade off as potentially a loss for society or, say, humanity. Maybe the Shakespeares of this world always end up being Shakespeares. But maybe every once in a while they end up in finance or consultancy. I think it's fine that they have to freedom to do that. I think it's a shame that so much of the risk is on the side of "I'm going to be the next Shakespeare."
Many of my colleagues weren't lifelong consultants, but they were lifelong businesspeople. The ones who left went on to start tech companies, open restaurants, work in VC, work for non-profits, etc.
No one quit and started writing plays.
Not an apples to apples comparison with the Yale article, but my reaction is still surprised that the number is that small at Yale.
But none of them say they actually helped a single employee of a single organization actually accomplish anything in particular for all the fees and free experience being paid to them so they could gain this wide experience, travel and fat paycheck.
And if it's not clear, this is precisely what we're talking about with the field not being a net contributor to society.
(also interestingly, to the person, every single person I've ever known who worked in the field all say they would have done something different if they could go and tell their 21 year old self one thing)
It's a time-money play. We do the work that creating or scaling a corporate strategy group would do if you had the 6-12 months to go out, hire a team, train them together, create the necessary links to the organization, and go do the work. With consultants, you can hire and fire us at any time, no severance, pensions, or hard feelings. Once our work's done, we leave.
I'm not saying it's the best thing since sliced bread. But zero net contributor it isn't.
And here it is, I would argue that consultants offer (to each reference point):
a faster time to [a], you hire them as a group instead of sourcing each worker separately
no [b], after all, they are ~20 year old "experts" led by an experience consultant manager or firm partner who's sole job is to stash the squadron of kids at the other company and check up on them every so often, then give a grand presentation at the end of the contract term. Why would they need to understand the particulars of how a company works or how to move them to a path to success? After all, probably nobody on the team has actually run a successful company. And businesses all fit into nice b-school categories anyways.
no [c], it's like a group of shock troops falls out of the sky on an organization and commences to create chaos. I've never seen something so disruptive to a company as a consulting team inserting themselves into the day-to-day of an organization. They don't know anybody, they don't want to know anybody, and it doesn't help them to know anybody beyond charting out the organization and work structure of the company.
a debatable [d]. Oh, okay, I'm being harsh about [d]. All of my friends who work in mgmt consulting work their gosh darn asses off, generating thousands of powerpoint slides and binders full of diagrams.
Does it amount to much? I dunno. There's some value from a Knowledge Management perspective for an organically grown organizations to understand how information and communications occur in their company. Mapping out de facto business processes I guess is helpful.
Does it require a team of consultants to come in and do this? Nah, most companies could do this with one or two dedicated hires for far cheaper and far less disruption.
In my personal, admittedly anecdotal experience, these things could be useful if they were done properly. But I've never actually seen a consultant team actually interview the line workers who would actually know this stuff.
It's like it's beneath them, and too time consuming to figure out that the blue form #4 doesn't go from department x on floor 5 to department c on floor 6, but actually goes from John in department x to Lisa in admin, who then brings it to her boss Karl who then collects them in a stack to give out at the weekly management meeting to Jessi who works on floor 6, but not in department c, but who is married to John (no relation to the previous John), and gives it to him at night over dinner in department c, who works for the ultimate recipient of the form, John's brother Jake who is supposed to manage the department and initiate processing the forms, but has a drinking problem and only shows up to work in the middle of the week to do so.
Why this convoluted process? Why not just have blue form #4 go from x->c like the manager in x believes happens (but doesn't because she doesn't follow the de facto processes enough to know this)? Who knows? The consultants don't know that's for sure because they never investigate this Rube Goldberg machine.
And when analyzing why it's so slow and convoluted, they analyze it to death and might just decide that department c is the slow boat in the fleet and its more cost effective to eliminate that department by merging them with x and eliminating redundancies when really they just need to replace Jake and make the form electronic so the form is emailed between floors.
You think I'm making the previous example up, but I'm not. And what actually happened is that when they merged the department they fired John (#2) which sparked Jessi to desire to leave the company, and she brought along half of her department which didn't need to have that happen. Within a year 12 other key people left out of bad blood with the company sparked by this initial round of redundant layoffs. And oh yeah, Jessi, who left with her team, started her own company with her husband John and that staff, who ultimately ended up contracting back at their old company, to do their old jobs, at 3x the hourly charge rate.
And Jake still works there, whenever he feels like coming in. But to make up for his personal failures, the company has had to hire a fleet of subordinates.
End result? 3 failed multi-million dollar projects, not late, failed. Rehiring the same employees at 3x the charge rate as contractors, and to support Jake they had to increase head count to the point that it's virtually unchanged from before the entire merger of department x and c.
And oh yeah, the company is out a $2 million dollar consulting fee.
This is not a good advertisement for Yale. In addition to costing a lot of money, Yale costs four years of lifetime. Yet, after all that, students are left in a position where if they want business skills, they have to hold down a job and go to night school at a junior college?
Because of this, it does not have business classes. You cannot major in communications or public relations. It doesn't have an official pre-med program. The idea is, you've got the rest of your life to do all that.
Whether you think this is a smart philosophy, of course, depends on your point of view.
And of course, after you graduate from undergrad, then you can try Yale's graduate programs, among which you'll find some of the top professional schools in the country.
For me and my EE/CS friends there are three options that come before finance (I don't think anybody even considers management consulting): grad school, FB/Google/MSFT...etc or a start up. I only know one person eager to enter finance, compared to many people interested in, and usually already working towards, either an academic path, a stable programming career or founding their own company.
That said, there is some very serious selection bias in my group of friends, so this is probably not indicative of my university at large. Particularly, almost everybody I know is in some sort of engineering, and the school I'm at is particularly strong in engineering (especially EE/CS). I suspect if I had more friends from the business school I would have a very different picture.
But you have to work very hard (all the way from High School), tread along a well defined path, and it'll work out. It's a standardized, reproducible variant of the American Dream of living a wealthy life.
Original source that they don't link to: http://www.yale.edu/oir/open/pdf_public/YC%2010%20Sr%20Study...
If you look at the original source, you'll find that 1) it's only 25% if you don't count Yalies who went to grad school, about a quarter of the class, and 2) there was a HUGE (50%) falloff from 2008 to 2010 due to the crash, so in 2010 it was more like 12-15%, not 25%.
(Yale senior here)
I found it very useful to me, I didn't have to come up with convoluted justifications for why I did it, and I'd do it again if I was in a similar situation.
The salaries are still higher in banking and consulting. But they aren't high enough to compensate for the utter lack of value I'd be providing to society.
I think one solution would be to limit the access these firms have with students, and to curb their "predatory" hiring. But alas, these firms are large donors to universities, and their executives are as well.
Alas, American politics AND education are birds of the same feather. Both sing the same tune of ethics, ideals and values; and both are preyed on by the same corporations.
Studying philosophy, art, history, religion, science and the classics (that is, education as opposed to mere training) is supposed to bring people in touch with their humanity and, more relevantly, their mortality-- the fact that we'll all die and that it can happen at any time.
The first 5 to 15+ years in the professional and corporate life (and not just in the demonized investment banks and consulting firms, because this is a common trait of human organizations and every bit as entrenched in academia and mainstream corporations) are about denying said mortality. You're expected to focus on a far-off distant future that may never come and, in the mean time, "pay your dues"-- that is, work in conditions that no one would accept unless harboring a delusion of infinite time, a misguided belief that the present doesn't matter because the future will be flush with riches, prestige, and make all those present-time sacrifices irrelevant.
I don't support war or conscription in general, but it's no coincidence that the "yuppie" phenomenon was born after the abolition of The Draft. Once kids lost awareness of death (not that it exists, but that it will happen to them at an inconvenient time; it's always "inconvenient") they could treat their own time as limitless and without value, so they relaxed their demands for autonomy, rewarding work, and mentorship in exchange for a 10 or 20 percent bump in immediate prosperity.
I would call this a failure of the educational system, but I don't think it is. We have a deeply deluded culture focused on the transient and on seduction and I don't think (even if individual professors do a great job) this is something that schools can fix.
