Can an MBA from a top school make a big difference in your life?
Just about all the applicants to Harvard, Stanford, Wharton and other top business schools in the world believe that’s the case. Otherwise, they wouldn’t quit their jobs and attend a prestigious school in a two-year MBA program that costs hundreds of thousands of dollars. And the research largely conducted by the Graduate Management Admission Council shows that the vast majority of MBAs have no regrets. GMAC’s 2012 survey showed that 95% of MBAs and business school alumni rated the value of their degree as outstanding, excellent, or good. Nine out of 10 alumni say their graduate management education prepared them for their chosen careers.
Aside from such vague macro data, however, there’s generally little information that reveals what really happens to those who earn an MBA from a top school years after they’ve entered the workforce—until now. Poets&Quants obtained the results of a survey of Harvard Business School’s Class of 1986 that was done for its 25th reunion last year.
Members of the class were asked 85 questions that yielded revealing answers about their professional and personal lives at mid-life. Alums were asked if their lives have been easier or harder than expected, whether they believe America is a better place to live and work now, and if they ever had to hire a defense attorney. They were asked how they met their life’s partners, whether they divorced or stayed married, how much money they make, and what their personal net worth is.
A class profile that is rich in detail and extraordinary for its candor
Because the answers were only intended for the class and not the public, the results are extraordinarily candid and frank. Some 271 members of the class responded to the survey, representing 35% of the total class and 42% of the alums for which Harvard had current street or e-mail addresses.
This is a class that has endured three recessions, including the recent economic collapse that has been the most severe downturn since the Great Depression. It is also a class that has seen vast changes in the world of work, from the sizable impact of international competition to the growing use of technology in every aspect of life. The class has seen dramatic upheavals in societal and cultural norms, from marriage and divorce to the decline of Corporate Elite and the rise of the entrepreneur.
In the year the class graduated, Ronald Reagan was President and Mike Tyson became the youngest heavyweight champion in history. A gallon of gas cost 89 cents and the average income in the U.S. was $22,400. A Tandy 600 portable computer cost $1,594 (Apple had only introduced the first Macintosh computer a year earlier). Computers ”were so heavy we all needed help getting them into our dorm rooms and since we were the first class in the history of HBS to have computers, the spreadsheets were incredibly buggy,” recalls Pamela Meyer, one of the ’86 women who made up 24% of the class.
Some 47% of the class has been fired from a job, 14% have been divorced
The result of the reunion survey is a fascinating profile of a class, a rich mosaic with both substantive and frivolous facts. Some of the more telling tidbits:
- Even Harvard alums are not immune from downsizings and firings. Some 47% of the class said they had been involuntarily dismissed from a job, while 13% said they have been fired twice and 4% reported having lost a job three times in their 25 years since graduation.
- Sex isn’t a very high priority for the Class of 1986–at least not that they are 53 to 55 years of age. Just 3% of the alums say they want more sex. The highest priorities? Time (31%), health (18%), and peace of mind (13%).
- More members of the class have hired personal trainers (43%) than therapists (41%) or cosmetic surgeons (7%).
- Slightly more than one in four alums have gained 11 to 20 pounds since they wore their cap and gown. Some 15% put on 21 to 30 pounds, while 5% tip the scales with weight gains of 31 to 50 pounds.
- A third of the class (33%) admitted to having slept with someone whose last name they didn’t know (37% for men, 17% for women).
- One in four own 25 or more pairs of shoes (58% of the women and 15% of the men).
- One in five (20%) have skydived, while one in three (32%) completed a marathon.
- About 21% met their spouses at their undergraduate schools, while 14% found their spouses at Harvard Business School (12% in the same Class of 1986 and 4% in the same HBS section). Another 12% met at work.
- The Class of 1986 apparently wasn’t into the bar scene. Only 3% of the class met their spouses at bars. Some 6% said they met at a party, and 4% met randomly on a plane or in a taxi.
- Some 14% of the class is divorced, with another 1% separated. About 5% divorced and remarried.
- Some 18% dated someone they met online, but only 3% of the class married the person they met on the Internet or by some “other commercial means.”
The survey addressed most of the obvious questions any applicant would want to know, including what contribution did a Harvard degree make toward a successful life, how much money does an HBS graduate make 25 years after graduation, and how much personal wealth can a Harvard MBA accumulate in a quarter of a century. The answers are all here as well and they are eye-opening.
Median net income: $350,000, Median net worth: $6 million
For a group that has lived through three recessions, including the worst since the Great Depression, the Class of 1986 is doing pretty well, thank you. The median annual income of a ‘86er last year was $350,000. Slightly more than one in four class members reported annual income of $1 million or more, while 8% of the class said they earned more than $5 million last year.
The median personal net worth for the class was a heady $6 million. But that number only tells a small part of the story. Some 19% of the class reported net worth between $20 million and $100 million. About 4% of the class said their personal net worth exceeded $100 million.
As for other material toys:
- Nearly eight in ten (77%) owned a second car.
- Four in ten (42%) owned a vacation home.
- One in four (25%) owned a boat.
- One in ten (10%) owned a full or fractional share of a private airplane.
What about the hard luck cases? About 8% said their personal net worth was below $1 million, with 3% in the under $400,000 bracket. Some 5% said they were making $100,000 or less last year. Asked if the post-2008 recession caused them to “consciously economize or otherwise had a tangible impact on your lifestyle,” only 18% of the class said “yes, meaningfully.” Some 41% answered “yes, somewhat,” while the 40% said “no.”
36% founded a company that employed 25 or more people
Very few members of the class are traveling on the rocky ground, to paraphrase a recent Bruce Springsteen song. About 36% of the class founded a company that eventually employed 25 or more people, and an extraordinary 14% have been climbed into the C-suite at a Fortune 1000 company with the title of chief executive, chief financial officer, or another C-position.
How did their lives, 25 years later, match up with their expectations of what would happen? When asked how similar or different has life been from what you expected, only 17% said it was pretty much what they expected. Some 24% said it was “different,” 12% said “extremely different,” and nearly one in ten (9%) checked the box with the statement “What the hell just happened the last 25 years?” The largest single group of the class, 38%, said life has been “reasonably similar with a couple of curve balls.”
Personal life harder than expected at graduation for one in four
When asked if life had been harder or easier than expected, only one in ten (10%) of the class said their professional lives have been easier, while 16% thought their personal lives have been easier. A surprising number of Harvard alums believe their lives have been more difficult than they ever imagined. Some 38% said their personal life was harder than expected, while 30% said their professional careers have been harder. (Some 46% said their personal life has so far turned out as expected, along with 59% for their professional life.)
Only 1% thought their Harvard MBA was not worth it
As for the bottom line answer to was the Harvard MBA worth the sacrifice, the class was understandably in agreement that the degree was an important ingredient in its success. Only 1% of the class–three of 271 respondents–believed their Harvard MBA was “not a particularly productive use of my time or money.” Nearly half (48%) described it as “one of the best decisions of my life.” Another 34% said it was a “very important contributor to my career.” Only 13% admitted that going to Harvard for an MBA was “a responsible move professionally but not a big impact on my overall life.” On a less serious note, 3% of the class agreed to the statement “when I meet people who went to Stanford, I am secretly envious.”
What did the class find to be the most valuable part of getting an MBA from Harvard? Some 28% of the alums said the top answer was the “ongoing professional credential” of the degree, while 22% said it was “placement in job after school” and 21% said it was mainly the “education.” About 13% believed the degree’s primary benefit was the “personal self-confidence” it bestowed. One in ten (10%) identified “classmates for social reasons” and 6% said the “network of alumni professionally.” Some 3% said it was “something to drop into cocktail party conversations.”
How much did the degree actually change their lives? Just 8% of the class believes their lives are not at all different by having a Harvard MBA. Some 46%, however, said their lives were “somewhat different,” while 40% said their lives were “materially different” as a result of the degree. Another 5% agreed with the statement “I don’t want to think of my life without HBS.”
Eight in ten class members would have gone for an MBA elsewhere if HBS had rejected them
One of the most interesting questions asked of class members was what would they have done if Harvard had turned them down for admission. Eight of ten members of the class (82%) said they would have gotten an MBA from another school. The largest percentage of ’86ers, 27%, said they still would have gone to business school but were uncertain which school they would have attended. However, about 19% said they would have gone to Stanford, 9% to Wharton, 6% each to Chicago Booth and Dartmouth Tuck, 5% to Nothwestern’s Kellogg School, and 4% to MIT Sloan. About 4% of the class said they would have continued to apply to Harvard until accepted.
Politically, the Class of 1986 is the complete opposite of the old adage “Those who are not liberals when young have no heart. Those who are not conservatives later in life have no head.” The class reported a strong preference for Reagan in 1984 and then Obama in 2008, even compared to popular vote totals. Some 63.5% of the class backed Reagan versus a national popular vote of 58.8%, while some 64.3% backed Obama, versus a popular vote of 52.9%.
Most of the class thinks it was lucky to graduate from Harvard when it did. More than half the class believes that America is not a better place to live or work than it was when they graduated in 1986. Some 21% of the class thought the country was “significantly worse,” while 37% said it was “slightly worse.” One of four of the class, however, had a very different view. About 18% said America was “slightly better” than it was and 7% said it was “significantly better.”
Advice: Follow your passion, trust your gut, get divorced now!
Five common themes emerged when class members were asked what advice they would give others. The most common was expressed in such quotes as “follow your passion, “the money will work itself out,” “pursue what is most fun to you,” “do what you love” and “enjoy the ride.”
Oddly, though, the second most common theme appeared to be in conflict with the first. “Focus on making money earlier,” advised one ’86er. “Ignore that pursue your passion stuff,” said another. “Make more money,” added one ’86er. “Get promises in writing,” advised another.
A third theme evolved over the importance of picking a spouse. “Be more careful in choosing a spouse,” warned one’ 86er. “If he seems like a jerk, he’s a jerk.” Said others: “Marry someone else…a screwed up marriage screws up everything else.” And finally one obviously burned class member put it simply: “Get divorced now!”
Many members of the class wished they had taken more risks. “Trust your gut….take some career risks…be more ambitious…think big…there is never a good time” were among the comments.
And finally, many alums emphasized the value and importance of family. “Spend time with your children,” advised one. “There is nothing more rewarding than investing in your children,” said another. “Time will fly by and your children’s lives will never be repeated.”