Yale School Of Management

Why Yale's Business School Rates So Highly In Social Enterprise

When Yale University founded its School of Managmeent in the mid-1970s, they imagined a business school with a difference. Rather than funnel all of the school’s graduates into jobs on Wall Street and in consulting, the founders believed the school should educate leaders for both society and business. In fact, cohorts of students eager to […]

When Yale University founded its School of Managmeent in the mid-1970s, they imagined a business school with a difference. Rather than funnel all of the school’s graduates into jobs on Wall Street and in consulting, the founders believed the school should educate leaders for both society and business.

In fact, cohorts of students eager to enroll at the school, beginning with the first class in 1976, knew that they wouldn’t be getting an MBA degree. Instead, to emphasize the dual mission of the school, they would receive an MPPM, a master’s in public and private management.

It wasn’t until 1999—nearly a quarter of a century after that first class showed up—that the school decided to award MBAs rather than MPPMs, largely because of the widespread acceptance of the MBA and the market confusion sowed by a rather unfamiliar acronymn on Yalie resumes.

‘A BUSINESS SCHOOL WAS BENEATH YALE’S INTELLECTUAL LITMUS TEST’

“The idea of creating just a business school was always beneath Yale’s intellectual litmus test,” says Tony Sheldon, executive director of the school’s social enterprise program and a 1984 SOM graduate. “The vision was not to create a business school but a school of organization and management and to look at the broader issues of management regardless of sector. It also was an acknowledgement that most managers weave across two if not all three sectors during their professional lives.”

More recently, however, some critics have raised doubts about the school’s continuing commitment to its original mission. A recent Wall Street Journal story, entitled “Yale MBAs Question Whether Their Business School Is Too Corporate,” surfaced the issue, though it failed to quote a single critical current student on the record.

For SOM, it’s hardly a new issue. When former airline executive Michael Levine was dean of the school from 1988 to 1992, the controversy became so heated that alumni arranged for an airplane to fly over commencement with a banner lambasting Levine’s leadership of the school. Many still believe that Levine came close to destroying the school and did substantial harm to the university’s reputation.

THE NO. 1 BUSINESS SCHOOL FOR SOCIAL ENTERPRISE IN THE U.S.

Yet, Yale has consistently been ranked by other deans and MBA directors as the No. 1 business school for social enterprise by U.S. News & World Report. When the publication releases yet another update of its rankings later this month, SOM is expected to top the social entrepreneurship category once again.

Dean Edward ‘Ted’ Snyder, who had been dean of the business schools at the University of Chicago and the University of Virginia, has not disavowed the school’s original mission. But under his tenure, the school has substantially increased its profile and standing, sending more graduates into mainstream MBA jobs than ever.

So has the newly revitalized School of Management at Yale pulled back on the social sector? To the contrary, insists Sheldon, who says that as many as 200 or more of the 700 graduate students at SOM now take at least one social enterprise offering. “I would say interest in social entrepreneurship is as strong as ever,” he says. “Among the pool, there is at least as many interested students if not more so than eight years ago and there are a lot more classes available now. More students from other parts of the university are now part of the classes. Next fall, a new course will debut with Yale’s School of Public Health on social entrepreneurship and global health. More students than ever are doing social startups.”

‘CLASSES ON ENTREPRENEURSHIP ARE FILLED BEYOND CAPACITY’

Sheldon isn’t clear on why there is increased interest in startups. “I don’t know if it’s just because there is more opportunity now or if there is agreater interest in doing it,” he says. “The classes on entrepreneurship are filled beyond capacity and a lot of the students are interested in social enterprises. It may be that more people are coming to business school who are interested in this. But there’s also  a more fertile ground for students who want to take a risk and do it. Today, you can get from Yale office space and support for two years so it puts a safety net under it. I bet there are ten times as many students trying to launch their own enterprises today as there were only three years ago.”

Since the school’s debut, the focus on the public and social sectors has waxed and waned. “The relative emphasis on business vs. society has gone back and forth over the years based in significant part on the reigning dean’s sense of priorities,” concedes Sheldon, who will celebrate his eighth year in charge of the social enterprise initiative at SOM this summer. “It was very much paramount in the minds of the two deans before Ted. But Ted’s mission for the school has been global and includes both the intergration of the business school with the university and having an increasingly emphasis on entrepreneurship. I don’t think the social side detracts from any of those three parts of our mission. In fact, social enterprise converges on global engagement, entrepreneurial opportunity and a broader integration with the university.”

Sheldon says that if anything, his work is more intergrated with the school than in prior administrations. “Social entrepreneurship in the school is quite solidly embedded beyond just the students who come here explicitly for it,” he says. That occurs in both subtle and not-so-subtle ways. The general coursework at SOM in such business basics as accounting, finance, marketing and operations is far more likely to contain non-profit and social enterprise cases and examples. At Yale, students interested in the social sector are also likely to find a much larger portfolio of courses in the subject as well as a larger and more active set of extracurricular opportunities. And they are more likely to have a larger percentage of their classmates from the social sector than most other business schools which obviously leads to more public sector perspectives being brought to bear in classroom discussions.

‘A CULTURE SUSTAINED BECAUSE IT HAS BEEN PASSED DOWN’

“The peer learning really is in some ways the official learning,” insists Sheldon, in an interview with WeSeeGenius. “This is true for the people who come from McKinsey and want to go to Morgan Stanley, and it’s true for the people who come from the Clinton Foundation and want to go to the Ford Foundation. They choose Yale over Wharton or Chicago or Harvard because they want to be part of that community. The student culture has been sustained because it has been passed down from year to year by the second year students. That has sustained the school’s commitment to this broader persepctive.”

Yet unlike some other business schools, such as Stanford University’s Graduate School of Business, Yale SOM does not offer a certificate in social entreprenership. For that matter, there is no ‘major’ or ‘concentration’ in finance or marketing, either. “You are sort of in the soup and can focus on whatever you want to,” explains Sheldon.

Though there is a full menu of elective courses in the social sector, one of the more popular offerings is Sheldon’s practicum in social entrepreneurship. It is a hands-on experiential course that matches teams of students to specific projects all over the world in such countries as India, Brazil, South Africa, Ghana and the Phillipines. Sheldon will identify social entrepreneurs in these nations who are facing strategic challenges and see if they are open to having teams of MBA students engage in consulting assignments to lead them to better solutions.

WORKING IN SOCIAL ENTERPRISE AROUND THE WORLD

A typical team will consist of four MBAs along with a graduate student from Yale’s public health, international affairs, or forestry schools. Yale then partners with a local business school in its newly formed Global Network for Advanced Management to ante up a current student there to round out the team and provide local context and perspective.

Sheldon says he has a half dozen teams in Ghana and five finishing up in India. They range from a group that is scoping out a mobile technology platform to extend quality healthcare into rural India to the development of a mobile app for masons and homeowners to improve the quality of construction in the informal settlements in Delhi. Another student team is currently working with the affiliate of a microfinance bank to mobilize farmers in the remote northeast of India to give farmers more efficient access to markets to reduce spoilage of perishable goods.

“There is such demand for this that I can barely keep up with 11 projects right now,” adds Sheldon, who believes the skills learned in these projects are also transferable to a business context. “We’re teaching students how to manage a global engagement with a client in another part of the world. The feedback we have been getting is that this is exactly what employers want our students to have when they go to work in the business sector.”

‘WHAT DISTINGUISHES YALE IN SOCIAL ENTERPRISE IS THE EXTRACURRICULAR STUFF’

Most often, Yale partners with social enterprises who can provide students with a significant level of engagement. “Startups aren’t great partners for us because the principals are often doing so much that they can’t engage deeply enough with our students,” believes Sheldon. “The larger organizations can also be difficult to penetrate. But for the vast majority of entrerpreneurs who are are facing strategic challenges, there is generally a role we can play in bringing to bear research and recommendations that can enhance their ultimate decision making.

“There also are electives on innovation in the public sector and practicums on launching new social enterprises. But what really distinguishes Yale in this area is the extracurricular stuff,” he maintains. “Even though we are less than half the size of Harvard Business School, SOM sends two or three times the number of students to the annual Net Impact conference. There is a real oppportunity to engage and shape your experiences depending on your interests, whether its philanthropy, the public or social sector, or the environment. The work is really done by the students. They put on nationally recognized conferences in public education and philanthropy and a symposium on economic development. We also do a joint design and innovation event with Wharton and Columbia Business School. The philanthropy conference alone brings to Yale about 30 speakers, and I probably bring in 12 to 15 speakers beyond that. I think this is what makes Yale distinctive.”

Yale also was among the first business schools to boast a loan forgiveness program for MBA graduates who go into the public or non-profit sectors under which the school makes your loan payments while you are employed in one of those sectors. There also are different competitions for seed capital, some at SOM and others jointly with different Yale schools. The university’s entrepreneurship institute, moreover, has a summer fellowship program that opens up the chance to pitch a social idea to potential investors.

FIGHTING THE ‘HUGE VORTEX OF MBAS HEADED INTO CONSULTING & WALL STREET’

Nevertheless, admits Sheldon, students complain there are not enough opportunities. “I look at the Net Impact newsletter every week and there are a dozen internships and permanent postings for organizations that didn’t exist when I was at the school and for whole fields like social investment that didn’t happen back then. Relative to the private sector stuff, I appreciate the relative paucity of offerings but there are lots of things that go on that didn’t happen 20 to 25 years ago.”

Going the social enterprise route with an MBA is not for the faint of heart, maintains Sheldon. “It takes a certain amount of fortitude to get a job in the social or public sectors because there is a huge vortex of MBAs headed into consulting and Wall Street. It’s pretty hard not to get drawn into that, and there are a lot of people who think you should work for McKinsey for a few years before going off and doing a social startup. It takes real clarity of purpose to do it because you’ll have an independent job search.

“There are no systems for recruiting MBAs in the social sector and there is no wining and dining and signing bonuses if you pursue a career in the social sector. You have to do your networking while your peers may have offers in October and you may not know until the following April or later. It takes a certain focus to not be demoralized by that. If you are launching your own venture, it takes a greater level of fortitude. So the bar can be higher than a straight business startup because you have to bridge the financial challenges.”

Sheldon notes that he has one former student who had run the Clinton Health Initiative in Uganda and another who spent time in both India and Brazil working for a finance group that supports solar energy development. “You can definitely do it, but it takes more effort while you are in school and more effort once you are done to find the right match. You have to be preapred for that both emotionally and financially. The Rockefeller Foundation and the Acumen Fund will know in March or April if they can hire one person. McKinsey and Goldman are making full-time job offers to students who were their summer interns nine months before they have to begin. It’s just a different career path.”

  • An impressive share, I just given this onto a colleague who was doing a little analysis on this. And he in fact bought me breakfast because I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love reading more on this topic. If possible, as you become expertise, would you mind updating your blog with more details? It is highly helpful for me. Big thumb up for this blog post!