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Will People With High Grades End Up Working For Those With A

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Status: Yes. It was I who let the dogs out.
Joined: 03 Dec 2012
Posts: 44
Location: Canada
H: B
Concentration: General Management, Leadership
GMAT Date: 08-31-2013
Followers: 0

Kudos [?]: 12 [0], given: 27

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Will People With High Grades End Up Working For Those With A [#permalink] New post 06 Sep 2013, 02:53
Will People With High Grades End Up Working For Those With Average?
September 06, 2013
https://www.linkedin.com/today/post/article/20130906014138-8451-will-people-with-high-grades-end-up-working-for-those-with-average?trk=tod-home-art-list-large_0
http://www.washingtonpost.com/blogs/innovations/wp/2013/08/29/are-business-schools-graduating-the-wrong-leaders-if-so-the-gmat-may-be-to-blame/
My recent Washington Post and LinkedIn articles on how the GMAT may be the root of all evil in the business world provoked many intense reactions. I too was surprised to learn of the correlation between high GMAT scores and all the bad things we see in business: lack of ethical orientation, male domination of executive ranks, uncertainty avoidance, and individualism. So the reactions weren’t unexpected.

The most interesting response I received was from a Silicon Valley celebrity—my good friend Bill Reichert. His email was so interesting and provides such a provocative perspective of how Venture Capitalists view MBAs and PhDs that I asked for permission to share this with you. Below is his message.

I enjoyed your most recent Washington Post article on the inverse correlation between high standardized test scores and entrepreneurial inclinations. But I have to ask, are you really surprised?

Anyone who has spent any time in the entrepreneur ecosystem knows that there is an inverse correlation between high prestige MBAs and entrepreneurship. It's clear what is going on here. The GMAT, like the SAT, is focused on finding the high achievement individuals in society — not the compassionate, ethical, collaborative, or socially conscious individuals. The whole institutional educational game is focused on individual achievement and test scores on standardized bodies of knowledge, not on teamwork, risk-taking, and innovative thinking.

Almost by definition, an individual who applies to business school is risk-averse — not inclined to take chances with his or her career, but rather more interested in taking the safest path to a prestige job. Stanford and Harvard do not primarily select for and nurture entrepreneurial skills. They select the best and the brightest high achievers. Fortunately, it so happens that some of those people do have some entrepreneurial inclinations — again, more because they are high achievers, and entrepreneurship is now seen as a legitimate domain of achievement.

This is already well-known within these programs. On our first day at the Stanford Graduate School of Business, the Dean told us that those who got the highest grades in the program would most likely wind up working for those who got average grades. (Steve Ballmer was originally in my class, but he dropped out. :-)

So none of the study's conclusions are new or surprising. In fact, to this exact point, my partner Guy Kawasaki at Garage Technology Ventures developed a tongue-in-cheek algorithm for determining the valuation of a startup company:

Entrepreneurs ask us all the time how we figure out the valuation of a startup company. Most VCs suggest that this is a very mysterious art. But actually it's quite simple: To determine the fair value of a startup company, multiply the number of engineers by $250,000, add $250,000 for each engineer from IIT, and then subtract $500,000 for each MBA.

:-)

The venture capital firm Sequoia Capital has expressed a similar disdain for the products of elite universities. They prefer entrepreneurs from less privileged backgrounds who have an innate street sense and scrappiness. (While MBAs learn how to be "lean," real entrepreneurs are scrappy.) Paypal billionaire Peter Thiel advocates that real entrepreneurs shouldn't even bother with a university degree. Another venture capitalist we know will not invest in someone with a Ph.D. because "a real entrepreneur would not have the patience to complete a Ph.D."

I don't mean this to be just another MBA bashing. Certainly we at Garage have seen, and have even invested in, brilliant entrepreneurs who also have MBAs. And MBA programs are investing heavily in entrepreneurship programs for their students. Mainly I'm reacting to the suggestion that it is surprising that the selection process used by our elite universities puts some individuals with talents we value highly at a disadvantage.

The question is: Can our elite universities select for and turn out graduates with the combination of talents we need?

It would be interesting and potentially very valuable for the authors to dive into an assessment of the implications of high SAT scores and high GPAs as a basis for selection into elite universities. We have the same problem at the undergraduate level that the study has found at the graduate level, I suspect. The focus on SATs and GPAs select for high individual achievers, and arguably work against those who have high "EQs" or high aptitudes for being effective in a team environment. To be fair, the selection process at many elite private schools tries to compensate somewhat by looking for individuals who may not have the highest scores but who have demonstrated great potential in some other ways. But the flood of applications at the top public universities, and even the leading private universities, largely overwhelms these good intentions.

The extreme pressure to obtain admission to the most prestigious schools forces young people to focus on individual accomplishment — in the classroom, on standardized tests, and in extra-curricular activities. Even programs that encourage community service by young people wind up being just one more field of competition to demonstrate individual achievement. A student who "saves" a village in Nepal is more likely to catch the eye of an admissions officer than a student who gets a summer job at the local deli. At the very high end, elite universities select for and subsequently graduate outstanding individual performers with very little emphasis on risk taking, team skills, and entrepreneurial thinking.

In the real world after university, however, getting things done is predominantly a function of being effective in teams and working effectively with other people. Progress almost always depends on creative thinking "outside the box" rather than conforming to standards of achievement and "best practices." Certainly, we need to find and support individual achievers with brilliant talents who can push the boundaries of specific domains. But even at the cutting edge of science and engineering, advances are increasingly made by teams of people contributing their exceptional knowledge and insights rather than by lone geniuses in their isolated labs.

So what should we do to develop these talents in our young people? Is it the proper domain of our university system to teach team skills and social consciousness? Or do we simply accept that the current approach to finding and selecting elites is the best the university system can do, and leave it to the real world to apprentice young graduates in these skills and attitudes? It's hard to imagine developing an effective curriculum for our educational system that will develop the non-academic team skills and creative thinking skills that we need. But we can probably do more, in early education, in the universities, and in the workplace, to foster the development of these skills and to make sure that young people with these skills are not undervalued by the educational system, or by our society.

Happy to continue the conversation over coffee, or a beer. :-)

Bill Reichert is a managing partner at Garage Technology Ventures, a seed and early stage venture capital firm based in Silicon Valley. He spent most of his career as an entrepreneur, with four venture-backed startup companies prior to co-founding Garage in 1998.Cartoon Credit: Shutterstock
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Will People With High Grades End Up Working For Those With A   [#permalink] 06 Sep 2013, 02:53
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