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The Corporate Perspective on the Importance of a Diverse MBA Class

Altruistic motivations aside, a diverse MBA student population just makes good business sense, according to moderator Tiffany Showell of Genentech® and panelists Scott Walter and Elizabeth Wamai, from Spencer Stuart® and Merrill Lynch®, respectively.

Corporations can see that the economic contribution of minority populations is growing. African Americans already represent $761 billion in annual buying power, which ranks them 10th around the world (and ahead of some countries). And Latinos represent the fastest growing demographic groups. To address this expanding customer base, companies need strong candidates who understand the market and are equipped to work side-by-side among diverse groups, including employees and clients.

Corporations are doing what they can. According to Wamai, Merrill Lynch® spent $6-7 million on diversity efforts last year, primarily in the realm of education, and will increase that to $10 million in 2006. That money includes 10 full-tuition fellowships for students at the MBA level. Spencer Stuart, which focuses almost exclusively on placement of “c-suite” candidates, is challenged to find candidates prepared to meet the changing needs in the senior-most positions.

Spencer needs both an increase in the number of well-trained students of color and more overall diversity training as part of the core curriculum. "Bringing [diverse students] in is great, but all students need to understand the business case for diversity," said Walter. And attendees confirmed that MBA alumni have asked for more guidance in how to communicate with and work with people of diverse backgrounds.

Walter can attest to this need from both sides. When first approached by Spencer Scott, Walter was to be the first African American male at the firm. Wondering then where the firm saw his place in the organization, Walter asked and was told honestly that it was the firm's belief his presence would attract and open networks for more diverse recruits. It was this honesty that ultimately attracted him, and now Walter passes along the message to recruits, saying they need to demonstrate their ability to attract a diverse workforce before they even show up for an interview.

Merrill Lynch® has also seen the investment banking skill set change over the last few years. What used to be mostly sales is now going electronic, and more quantitative and technical skills are needed. In addition to the need for more diverse hires across the board, Merrill Lynch® needs more qualified recruits with technical backgrounds, and Showell agreed the same is true at Genentech®. To assist in both areas, Wamai suggested MBA programs partner with groups for underrepresented science majors who may not know of the opportunities available in business-related fields.

Corporations may also be willing to underwrite programs if they can see the alignment of opportunity. Wamai gave two suggestions for a good proposal: a clear timeline of when to expect results and a description of other contributors to the effort. It works better if more than one company is backing the program, said Wamai. If Merrill Lynch® funds the proposal, they would likely tier their contributions by starting at reasonable level and increasing that amount based on performance. "Be wary of the firm who's willing to write the big check straight out," warned Wamai, "They may not be looking towards long-term support."

Walter and Wamai also suggested investing in programs targeting underrepresented groups earlier in the pipeline and working with corporations to discuss diversity best practices.

 

© 2006 Graduate Management Admission Council® (GMAC®). All rights reserved.
Genentech® is a registered trademark of Genentech, Inc®. Merrill Lynch® is a registered trademark of Merrill Lynch & Co., Inc. Spencer Stuart® is a registered trademark of Spencer Stuart Management Consultants.
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