In this engaging podcast episode, experts Jules Van Binsbergen, Jonathan Burke, and Madhav Rajan discuss the future of MBA programs by highlighting personal experiences from leading business schools such as Wharton, Stanford, and Booth at the University of Chicago. They assess the current market conditions which challenge the viability and perceived value of traditional full-time MBA programs, emphasizing students' shift towards part-time, online, or hybrid models that fit more comfortably within professional careers.

This discussion becomes imperative as it delves into whether MBA programs are successfully adapting to market demands and maintaining the rigor and value previously attributed to the degree. The conversation addresses the apparent decline in rigorous, technical coursework in favor of practical, experience-based learning and evaluates the effects of these trends on long-term career success, industry needs, and the business education sector as a whole.

Main takeaways from the video:

Please remember to turn on the CC button to view the subtitles.

Key Vocabularies and Common Phrases:

1. precipitated [prɪˈsɪpɪˌteɪtɪd] - (verb) - To cause something to happen suddenly or sooner than expected. - Synonyms: (triggered, caused, hastened)

What do you think precipitated what I'd call the decline of the MBA degree?

2. stagnant [ˈstæɡnənt] - (adjective) - Showing little or no activity or growth. - Synonyms: (inactive, sluggish, static)

So I would say it seems more like the MBA market is sort of stagnant.

3. viable [ˈvaɪəbl] - (adjective) - Capable of working successfully or able to survive. - Synonyms: (feasible, practicable, workable)

So I think the two year full time MBA program in those types of schools is basically not viable anymore.

4. signaling value [ˈsɪɡnəlɪŋ ˈvæljuː] - (noun phrase) - The perceived worth or meaning attributed to something, often based on its reputation or brand. - Synonyms: (brand value, reputation, symbolic worth)

I think there's a huge signaling value, Jonathan.

5. bifurcation [ˌbaɪfərˈkeɪʃən] - (noun) - Division into two branches or parts. - Synonyms: (splitting, divergence, separation)

And in many ways what's happened, I think is a kind of bifurcation that if you want to do the super technical finance stuff, you sort of do that right out of undergrad, right

6. modularize [ˈmɒdjʊləˌraɪz] - (verb) - To organize or structure as a module or a set of modules. - Synonyms: (structure, systematize, sectionalize)

My view with these one year programs was to essentially modularize the MBA.

7. rigor [ˈrɪɡər] - (noun) - The quality of being extremely thorough and accurate. - Synonyms: (precision, strictness, exactness)

It seems to me that if the rigor was maintained or even increased, I think that the value proposition could be more easily made.

8. empirical [ɛmˈpɪrɪkl] - (adjective) - Based on observation or experience rather than theory or pure logic. - Synonyms: (observed, experimental, factual)

Well, so the only downside I see to it is that, and I've asked many people this question, but I don't know whether there's an empirical good answer to it, which is the value added model of the MBA does exist of multiple pieces, and one of those pieces is the network formation and the lifelong friendships

9. modality [məʊˈdæləti] - (noun) - A particular mode in which something is expressed or experienced. - Synonyms: (method, form, manner)

And we're just sort of shifting the modality by which students are absorbing the mba.

10. trajectory [trəˈdʒɛktəri] - (noun) - A path, progression, or line of development resembling a physical trajectory. - Synonyms: (course, route, path)

But their giving back is really because they saw how the education kind of changed what they knew and how it changed their career trajectory

Ep55 “The Future Of The MBA - From 3 Top Business Schools” with Madhav Rajan

Welcome to the Lauder Institute at the University of Pennsylvania. I'm Jules Van Binsbergen, director of the Institute and a finance professor at the Wharton School. And I'm Jonathan Burke, a finance professor at the Graduate School of Business at Stanford University. This is the All Else Equal podcast. Welcome back, everybody. Today we're going to do something a little different. Rather than have us spend half the show talking about introducing a subject and having an expert come on and give us their opinion, today we're going to talk about the future of the MBA program. And obviously, Jules and I and our guest, who I'll introduce in a second, are world experts in MBA programs. And so we thought it's better off just have a discussion and provide three different perspectives. Three different perspectives are going to be from three different schools because our guest is going to be the dean from the Booth School of Business at the University of Chicago. Obviously, Jonathan's at Stanford and I'm at Wharton. And so we have three MBA programs represented. And so let's just think together about what the future of the MBA should look like.

Okay, so let me introduce our guest. Our guest is Madhav Rajan, who is the dean of the Booth School of Business at University of Chicago. Before that, he was in fact associate dean of the GSB at Stanford. Before that, he was a professor in the Wharton School. So he covers all three schools in his career just by himself. I should say that he is widely regarded as one of the most successful deans in all of academic business. So, Madhav, welcome to the show.

It's my pleasure to be here, Jonathan. Thanks for asking me. It is great to have you, Madhav. Thank you, Jules. So, Madhav, many MBA programs around the country are struggling. Several universities actually ended the MBA program. What do you think precipitated what I'd call the decline of the MBA degree?

Yeah, I think a bunch of schools, if you look at the what used to be the old Big Ten set of schools, I think like half of them have now shut down their full-time MBA. Right? You look at Illinois, you look at Iowa, I think Purdue, somebody told me Penn State was looking at shutting it down. So I think the two-year full-time MBA program in those types of schools is basically not viable anymore. And it's just a statement about students don't want to give up their jobs, go live in a place that may not have as much industry there. You know, if you look at Lafayette or Urbana, Champagne or places like that, and I think the hurdle for that has gotten higher and higher.

This isn't new. This trend I think was happening, you know, 15, 20 years ago and it's just sort of accelerated. It used to be that you had like a top 25 MBA schools, right? And if you got into one of them you would go ahead and do your MBA. But I think that list has shrunk over time and it's pretty much now, well, if I get into one of the top 10 or the top seven or top five schools, then it's worthwhile for me to leave my job and go and get that MBA experience. Otherwise, it's not. So I think that's something that you really reflect that students don't really see the value proposition of giving up both the dollar value that they're making and the opportunity cost plus the money they have to pay the MBA for a two-year full-time MBA. So I think that's been a huge issue. And more and more students are like, well if I get into one of the top schools, then I'll think about doing an MBA.

Otherwise, I'll keep my job and maybe think of doing it in the part time program, evening weekend, some sort of hybrid model. So I think you're very much seeing a shift. All the schools that I mentioned that are giving up their full-time MBA, they're also doing a lot of these part-time online hybrid programs and trying to get students to come in through that route, if you will. So I would say it seems more like the MBA market is sort of stagnant and we're just sort of shifting the modality by which students are absorbing the MBA, going from the in-person full-time experience to more of these online and hybrid sort of experiences.

So what went wrong? Why was there a time when people saw value in the degree and now they don't see value enough to spend two years? And what is the fixation with the top? I mean, aren't we all giving the same education? I think there's a huge signaling value, Jonathan. And I think for a lot of students it's kind of like what's the brand name of the school I'm going to, because that's the name I'm going to carry for the rest of my life. Right. And how does that help me over time? What is the set of other students that I'm going to the program with, the networks that I'm going to form, the relationships that I get there? And the perception is certain schools give you that and some maybe don't, or that you could get that through an online program or a part-time program as opposed to actually going to the school itself.

So I think that's the part that's completely changed. But I would say even on the part-time programs, this isn't to say that they're flourishing. Right. A lot of part-time programs are actually struggling because historically the companies would pay for students to go ahead and take their evening class or a weekend class. And companies have gone away from that model completely. So I think even in those programs, there's a real question about what is the ROI of coming in and doing a two-year MBA, whether part-time or in-person, and does that really justify the cost of taking the MBA? So I think we really need to think about, like, are we offering a degree that provides sufficient ROI for students that they want to make that investment in? And you know, that's a real question, Jonathan. And I think the data is suggesting that maybe we don't offer as much as we used to.

Yeah. So thinking about that, if we think about the three schools that are represented here now. Right. I think that Wharton, Chicago and Stanford have in common that we had this quantitative rigorous education part to the MBA degree. But I think it would be fair to say that even those three schools have struggled to keep that rigor at the same level that we used to have it at. And of course, we're probably biased because we're finance professors, but it seems to me that if the rigor was maintained or even increased, I think that the value proposition could be more easily made. And so what do you think is the mismatch there?

Yeah, that's a great question. I think if I look back, I actually started my MBA at Carnegie Mellon, which is an even more technical school than any of these. Yes. Just to throw a name, you know, Ken Singleton taught me my MBA econometrics class. Right. Which is sort of inconceivable in this day and age. So there's no question that the MBA in those days was a lot more technical, analytical, rigorous. At a place like Chicago, you know, students would have to take like a gene pharma PhD type class as an MBA class. And I think that's definitely gone away. Right. The interest in students doing really technical finance accounting classes has diminished over the years. Even in finance, what students want to do is to do more of, well, what do I need to get a job in like private equity. Right. Or venture capital, as opposed to what do I need to learn about options and option pricing and things like that?

So you're absolutely right, Jules. The kinds of jobs that students want to get even in a field like finance, coming out of an MBA, those jobs are very different than what they were 15 or 20 years ago. So more and more the MBA programs have tried to morph into helping students get the types of jobs that they have expressed an interest in getting. For example, to get a job in a field like private equity, if you haven't had a background in it, the only way to get it is to actually do sort of a practical PE lab-type experience while you're in the MBA program. So more and more the programs have become what I will call experiential. So you're kind of taking a PE class, but at the same time you're working in a PE firm, learning about what that skill actually is. And hopefully that's helping you then get a full-time offer from that company or from some other company.

So I think that's been a big shift, right? From teaching students like technical aspects of finance to giving them almost like practical lab-type experiences that'll help them get the kinds of jobs that they're looking for. They're no longer looking for jobs that are the super technical finance quantitative jobs. They're looking to get jobs in PE, VC, asset management. Right. And that's a very different type of skill than what we were trying to teach before. And do you think that there's also an aspect here? Because obviously the students that are coming in, we have to some extent control over that because we have an admissions policy and there are certain students that we admit and others that we reject. Do you think that the pool of students we admit also fits that model better? And therefore does there exist an alternative model in which a super rigorous education could be offered? Or do you think that this is already a response to trying to have supply meet demand?

Okay, that's a great question. I think that the way schools have tried to respond to that, Jules, is that if you take sort of the top five to seven schools, right, like the M7, I think the kinds of students we get are similar, the kinds of jobs that they're trying to get are similar. And their comfort level and willingness to engage in really technical material has definitely changed over time. They want to learn more how to manage the technical people as opposed to how do I learn and do the technical work myself. And in many ways, what's happened, I think, is a kind of bifurcation that if you want to do the super technical finance stuff, you sort of do that right out of undergrad, right. Or you go to one of these specialty masters in Financial Engineering like Berkeley has, like a Financial Engineering or a Princeton or MIT. Right. Sloan. And then we just started one. And I think that's become like an off ramp for students who directly out of undergrad want to go into a technical finance role and they never then come back into the MBA.

We at the MBA level have insisted that students have significant work experience before they come in. So four years out of undergrad, I think students at one level naturally have less inclination to do the super technical work and they're more interested in thinking about how do I become a manager of these technical people as opposed to being the person who does the technical work. So in some sense, Jules, I think the market has just bifurcated. Yes. People who really know from the beginning that they want to do the very technical finance roles end up doing an undergrad in applied math or physics or go to one of these specialty financial engineering type programs. And the people who want to do more of sort of managing in finance or sort of doing deals, being in private equity, they're the ones who sort of end up doing the MBA. So I think that's sort of what's happened to the market over time.

Madhav, I'm listening to you. I'm agreeing with almost everything you're saying, but it's clear we're shooting ourselves in the foot here. I mean, the idea that somehow we're a finishing school, that that's the value added. As I like to tell my students, the days maybe 50, 60, 70 years ago, if your dad was a partner at Goldman Sachs, you could become a partner at Goldman Sachs and nobody cared. Are long gone. In this day and age, the world is so competitive, you have to produce. If you're not producing, you're not keeping your job. So if we are not giving our students the means of production, and when I say means of production, I'm not talking about networking. There's not going to be value added. You say, sure, I understand when you use the word technical what you're talking about, but that doesn't mean that the MBA degree shouldn't be rigorous.

The problem with us is we produce this degree that isn't very rigorous. The standards, I think, have slipped enormously. And as a result, we're not really teaching students how to think in the way. In other words, when you learned econometrics from singleton. So for our listeners, that would have been a very technical course that even Jules and I would work hard in order to understand what's going on in that course, inconceivable in today's MBA. I'm certain most of the people who sat in that class never really used the econometrics again. But in the process of teaching that course, they were learning how to think about problems in rigorous ways which they could then take to the job. To the extent that you don't do that, you lose the value added of the degree.

I will agree with you. I think that we have changed the way we teach MBA students. I think that we have changed the extent to which we're willing to push students on a technical dimension. And that's kind of been an industry issue, if you will. Right? Oh, I can go to school X and get an MBA without having to push so much on the technical dimension. So therefore, you should also do the same. And I think we're all sort of guilty of that. I completely agree with you, Jonathan. The MBA today, compared to, let's say, the MBA 15 years ago, which is the comparison you're making, has more and more become a degree for students who are trying to transition into something else. It used to be the MBA was sort of a well designed, you know, you did your undergrad, you did some work experience, you came for the MBA. Now, more and more, the MBA is for somebody who has done an undergrad, has been working in something, isn't quite sure that that's what they want to do the rest of their lives, isn't super happy, and is trying to figure out what else is out there.

That's what the MBA has become. We have become the way that students figure out what is sort of the entire set of jobs that are potentially available to them in this economy, and then help them figure out which one they want to take. So in that sense, I agree with you. There's been a complete shift in the nature of the MBA, the role it plays in the economy. And we could agree or disagree about how right that is, but that's what we've become. So when we do orientation, for example, we ask students, how many of you are here to change careers? Everybody puts their hand up. So what the MBA has become is a much broader degree than it used to be in the sense that we now tell them, well, okay, look, if you want to be an entrepreneur, this is what you can do. If you want to be a social entrepreneur, here are all the things that you could do. So here is the entire set of things that are available to you later in life. Figure out which of those you want to be as opposed to going sort of super deep and super technical into any one of them.

And I think that's what's changed the MBA, Jonathan. But you know what's so odd about this is at the same time, the demands of employers went in the other direction. I sat at a conference a few months ago with Amazon's head of strategy. I don't know what his title was. I'll tell you what his job was. His job was to do the following. Amazon at some point realized that when they got a new supplier, they transformed the supplier because they were so large. And so Amazon decided, well, wait a minute, why aren't we getting some of this value added? And so as part of getting the deal, they would take equity, or in fact, they would take options in the supplier. Okay. And his job was managing those options, valuing those options, figuring out if they got a good deal or not. Oh, and then it has this added benefit, of course, because when you're a small supplier, you've got a customer like Amazon, obviously you're screwed if Amazon pulls out. Well, now Amazon has an equity stake in your company, so they have less likelihood to pull out. Right. It's an incredibly interesting contract.

And my question was, why did it take so long? Why did it take Amazon to figure this out? So, again, the ability to think strategically is more valuable today than it's ever been. And at the same time, the programs have moved away from that thinking. Jonathan, would you say that we've moved away from that way of thinking or just gone away more from the really technical aspects of doing that and tried to teach people more about the different disciplines that you would need to make a decision like that? Right. For example, for what you're saying, you need to be able to understand technology. You need to have taken classes in maybe negotiation. You need to have taken some classes in finance, valuation, things like that. So is it more of like a broad set of talents or skills that you would need to do that, or do you feel it's something where you had to drill down really deep?

I not drill down very deep, but you need to understand strategy and quantitative understanding of the world. You need to understand incentives. You need to understand value added, like who's adding value, where and how are we capturing the value added. Those kind of thoughts can only come from a rigorous course which understands what we call all else equal thinking, understands equilibrium thinking and the extent to which we step away from that. We don't give problem sets to people that are forcing people to think like that. I think we undermine the value of the degree. At least that's what I think.

No, I completely agree with you look, I feel like ultimately a lot is on the shoulders of the faculty member. Right. They control the classes. And so to the extent that you're somebody who actually cold calls your students, gives them difficult material, tests them on it, you're actually helping them in the future. Right. I think that you're actually shortchanging them. If you just say, okay, let's just chat about what happened in the case as opposed to, let's dive deep in, figure out what actually happened here. So I'm totally with you on that. I think the more rigorous the education, the better we're preparing students for the future that's to come. I think all of us, our schools have become broader than what they were 15, 20 years ago. And I think that's generally been for the better.

But I agree with you completely that going away from the standards that we should insist on for anybody who graduates from one of our institutions, that's a bad thing. And doing it because, oh, we want students to like us, and we feel like we want to do better in the rankings. That's the road to ruin. Right. Ultimately, what drives our success is the fact that we are providing students with great education that makes them successful sort of going into the future. And I think we have to keep doing that. I completely agree with you. I feel like watering down things because that's what we feel will make students happy is completely wrong.

So at the Wharton School, we used to have two different types of teaching awards, which, unfortunately, we don't have anymore. One was called Goes above and beyond, but that just meant that you just did a lot for the students. But there was another one that was much more interesting, in my opinion, which was called Tough. But we will thank you in five years. Now, that is a teaching award that you want to win, and I think that's how teaching words should be structured.

But to take the discussion slightly to a different place, one thing that also very much interests me is the industrial organization of our own sector in the following sense. Like, we were talking about these trends, and at each point in time, each of the schools had the opportunity to deviate from the equilibrium of what the whole MBA program was doing. And in fact, different programs jumped into the void that we left behind because we have these more technical master's degrees. And yet for some reason, we decided to all go down the same path and all offer the same MBA degree. Why is that? Why don't we see more product differentiation within the MBA market where people have a choice to deviate if they wanted to?

Yeah, I think it's a great question, but keep in mind, Jules, what you're saying is only true for the US if you go outside the US that has absolutely happened. If you go to Europe, the modal degree is the Master in Management which is done by undergrads who then spend an extra year doing a Master in Management or they take a Master in Finance or Marketing or whatever. Same in Asia. Right. So outside the U.S. absolutely that has happened. These Master's degrees have taken over. That's why if you look at, you know, even when I was at Stanford, we used to get very few students from continental Europe who were willing to come to the US after three to four years of experience and spend their time and money to come to the US because they didn't feel it was worthwhile. They would rather go to like a Bocconi or a Sangalan, spend an extra year or two getting Master's technical Masters or even do a one year MBA and they were done. Yes. So it's very much the US that hasn't adopted or changed as quickly as the other countries.

But even within the U.S. I think the change is coming. As you know, the Sloan School has a Finance master's that I think has done really well this past year. At Chicago, we started like a one year Master in Management and largely I was hoping to attract European students who I knew don't really want to come for the full two-year MBA anymore. So I think change is sort of happening, Jules, maybe very, very slowly. And I also agree with you. I think if you look at like Harvard, I think Harvard has no interest in playing that game. Right. They feel like they have a two-year MBA, that's what they're going to do. And my guess is Stanford is the same way. Right. They're sort of comfortable where they are. They'll never innovate in these sorts of dimensions, but I think everybody else will. And I think that they're actually capturing a very real demand on the part of students who kind of know what they want to do, don't really want to do the standard, let me wait for four years, then apply for an MBA and then take the job that comes out of it.

So it is happening, but I think it's sort of slower than it's happened outside the US. Outside the US it's completely flipped as you know, even the MBAs, there are 12-month MBAs and you can do INSEAD in 12 months and be done or IMD or ESA or LBs or any of the schools. I think it's very much a US-centric phenomenon that some of the top schools have not been willing to kind of change who they are and what they do.

Madhav, I think you are wrong about the Harvard and the Stanfords. I mean, I think we're sitting on our laurels and it's going to come back to haunt us because I just don't see the future of the path we're going down. I just said they wouldn't do anything different, not that they shouldn't.

Yeah, I know, I agree they wouldn't, but it's a big mistake. Well, you know, here's an idea that's been floated around which I think has quite a lot of legs. Let me get your opinion of it. So we already mentioned that there are these parts of the MBA program you don't really need to have work to do, right. In order to learn basic finance, you don't need a job. And then there are other parts of the degree that's basically wasted unless you have worked for 10 years and dealt with all the intricacies of business. So there's this idea of splitting the degree, the two-year degree into two one-year degrees. One year when you finished university, one year when you finished an undergraduate, and then another year when you're 40 years old. What do you think of that proposal?

Jonathan? I love that idea. And in fact, that's literally why I started these one-year programs. My view with these one-year programs was to essentially modularize the MBA in the sense that there are certain parts that you can do right out of undergrad. So let's say you have a really smart student, they're passionate about English or literature or classics or whatever, they go to Williams, do their undergrad, but they want to learn some basic skills before they take their first job, right? Some accounting, corporate finance, marketing. That's what the one-year master's in management in my view, that's how we designed it.

The really smart liberal arts student or engineering student who wants to get some idea of business before they go out, but then they go and do their work. And the vision that I have is eventually when they get enough work experience and they want to come back, they can do just the second year of the MBA. So what we're doing is sort of creating these as basically a ladder to a second year of the MBA precisely as you're structuring it, Jonathan. That's literally how we structured it. I love that idea. I agree with you. There are certain things that you don't need work experience to do like accounting or finance or basic marketing. But other courses where it would really help you to have had some significant experience.

So the logic of sort of what I was trying to do at Chicago is basically that to split the MBA into two one-year MBAs and have them happen at different times in your lifespan. Although once we start splitting, then of course immediately the conceptual question comes up, how much splitting do you want to do? I mean, in the executive education you talked about modularization, we offer things in weak sized bites. So then the question becomes, well, maybe you can split it up into even more as you progress through your career, you just take these one or two week courses.

I mean, are we essentially just going to one model where executive education and the regular MBA become sort of part of the same offering? That's a great idea. I mean, at some level I would say, Jules, we're kind of already doing that, right? If you look at Wharton, for example, you can do six modules in finance and you all give a certificate for that, right? Yes. Even though it's not a degree. It's the same with Harvard, right? You can go and do a six week advanced amp or whatever they call it and you get alumni status for doing that. So I think we're kind of doing that already. What you're saying would essentially just sort of cement that.

The big gap I see is that with the one-year modular model that I'm talking about, you still have courses and grading and so on and in executive we don't do that, but effectively that's essentially what you're doing. So I could see a model like what you're saying that okay, do a one year after undergrad, then go get some work experience and then over the next several years build up these two week or one week modules and once you get a sufficient number of them, we're willing to certify that you've had a degree. I think that's fine. I mean if you look at most other fields, that's essentially where we have gone, right? These sort of skill-based certificates that are given to people. And I don't really see why we wouldn't do that.

I mean at Stanford Engineering does that all the time, right? You have the Stanford Professional, whatever it's called, Jonathan. No SCPD or something. And that's basically what they do, right? You can sort of modularly do your master's over a number of years, mostly online and you're willing to certify that the student has basically gotten a Stanford Engineering degree. So I don't see that that's too far off, Jules. And I think that that could be the future.

Well, so the only downside I see to it is that, and I've asked many people this question, but I don't know whether there's an empirical good answer to it, which is the value-added model of the MBA does exist of multiple pieces, and one of those pieces is the network formation and the lifelong friendships. And obviously that will suffer from this modeler approach. And so I don't know, how much value do students place on each of these components?

The students place a lot of value. I know Jonathan doesn't, but students place a lot of value. Look, I was going to ask the same question. What about fundraising? Because the degree depends critically on donations. But I don't agree with you, Jules. Why would you think it would change?

Well, because if you do that one year after undergrad, you're probably not going to come back with that same group of people that you did that first one year with when you come back for the second year or when you do the module stuff. That's good. So you have two sets then.

Well, the question is how much critical time do you need with a fixed group to build meaningful bonds versus long-term? I think. All right, yeah, but that's an empirical question, which I think is interesting. It's a great question. Right? I mean, I think, look, in a full-time program you have two years, you get to know everybody. And in a program like Stanford, which is much smaller, everybody gets to know everyone. And clearly there are some benefits to doing that.

But I would also say that, you know, we've been quite successful in fundraising. And honestly, a lot of it is just that we had a lot of students who in the old days would do our evening program. But their giving back is really because they saw how the education kind of changed what they knew and how it changed their career trajectory. And so their giving back is really about, I want to give back to the school for what it did for me as opposed to I had a fantastic time attending Sundance together or South by Southwest. And that's why I'm giving money back.

So I think there are multiple reasons why people give. So I'm less worried about that than you might be. I am pretty cynical. My view is unless you get yourself an education, you're going to have money to give.

You know, Phil Knight, when he dedicated the Knight Management center, said something like, if it were not for the gsb, I'd still be selling shoes on the street. Right? And so we actually were providing, and please God, we're still providing somewhat a real education to understand how to be successful. That's my worry, that the less we do of that, the less the ability to have successful graduates, and then the less ability in the future to raise money.

No, I completely agree with you, Jonathan. Look, ultimately, if we're not providing an education that changes people's lives and their career trajectories, and it's something that they look back and attribute to their success, then we're never going to be able to raise money from them. Yes. I mean, these are smart people, right? That's the thing. The people you're trying to raise money from, these are very smart people. They may be quirky in their own ways, but they're very smart. They've done well. And so they're able to look back and ascertain precisely what role did that education play in where I got through, or did I just do it on my own? And I feel like you're right. Unless we're able to say, look, coming to our institution is what drove that change, they're not going to give you the money. So I think we absolutely agree with that.

And particularly. Right. More and more for the very top schools, the proportion of our revenues that comes from fundraising is high, even higher than that from tuition in the most cases. So we have to sort of keep that going. The notion that we have alumni who are thankful for what the school gave and are willing to then give back to the school, I think that's critical.

You know, Madhav, as you're talking, it's unbelievable how there's common wisdom and then the empirical evidence is exactly the opposite. I mean, if you think about the people who are giving now, and I know Chicago has had this amazing run in fundraising, that you've had immense success in that area. We think about the age of people giving right now. Those are the people that went to Chicago when the big people were there, when the University of Chicago was the premier research institution in the world, right. And they were just unapologetically teaching their research. And right now, you're bearing the fruits of that.

You're absolutely right. The people that we have had the most success raising money from are our PhD students, you know, Ross Stevens or Cliff Astness or people like that who went through a really technical program, or the people like David Booth, who was a PhD student, but then, you know, took his MBA and left. They really valued the rigor of Chicago, Right. And the fact that people were teaching them really hard things, but that felt that they got sufficient value from it once they get out into the real world that it helped their careers and they were able to sort of give back.

And I mean, you know, I talked to the alumni and they always they so we used to teach our evening program in this horrible facility. But for the students now, looking back, it's almost like nostalgic, right? Oh, we used to go to this crappy place in 190East Delaware in Chicago. It looked like a closet, you know, that they used to teach it. But that doesn't matter, right? Eventually it's like, who taught them? What did they get out of it? How did that help in their career and the things they did? And I agree with you, that's really fundamentally what drives sort of affiliation to the institution and giving not oh, did I have fun while I was there?

Well, Madhav, I think this has been a really good discussion. It's what we were hoping for, given our different perspectives. So thank you so much for coming on the show. No, no, it's my pleasure. And it's just so wonderful that you guys are doing this podcast. Jules and Jonathan look forward to chatting with you all in the future, too.

EDUCATION, BUSINESS, ECONOMICS, MBA PROGRAMS, HIGHER EDUCATION, CAREER DEVELOPMENT, STANFORD GRADUATE SCHOOL OF BUSINESS