MBA Quant Experience

David Thanairongroj, a first year at McCombs School of Business at University of Texas in Austin offers tips to prospective MBAs in his BusinessWeek MBA Journal about prioritizing their efforts during the application process and in the period between being admitted and arriving on campus, including these comments about quantitative preparation:

While waiting for your acceptance letter, one extra tip I highly recommend for non-business majors, even if you're an engineer and are good with numbers, is to take a financial accounting, managerial accounting, and finance class at a local university or community college before school starts. More than likely, you will already be at a disadvantage against a third of your smart classmates who have business degrees. I can guarantee that you'll be better off having some background in these courses rather than learning this material for the very first time in a very fast-paced environment.

Here are some comments from a Tuck first year that should provide some pointers to prospective students who are willing to prepare but want some help prioritizing their efforts.  I particularly like the emphasis on efficiency and the difference between going to bed at midnight and 2 AM. 

My Background: I have a science background, majored in biology and psychology at Middlebury College, and following that worked in market research, then consulting in the pharmaceutical and life sciences industries.

Here are my two cents:

If you are somewhat of a poet, or even if you have seen this stuff before but haven’t touched it in years, preparation before diving into a full-time MBA program can be incredibly useful. Given the time pressures of the first term, spending an hour here and there over the summer before starting your program will go a long way. Here’s what was most useful for me:

• Familiarizing myself with the basics. You can’t expect to remember specific formulas and all of the mechanics, but to gain or revitalize a basic understanding of excel modeling, the time value of money (e.g. discounting cash flows, annuities, perpetuities, etc.), statistics, implications of supply and demand, etc. will significantly pay off. Remember, though, that no one problem is the same, and therefore no solution is identical to the next. It’s not about memorizing formulas or finding out all the answers, but rather it’s about gaining some comfort, efficiency, and proficiency in how to approach problems and how to employ some simple tools to aid you in rational decision-making and problem-solving.
• Building the toolkit. Learning simple excel formulas can help cut down the time it takes to solve problems. You may understand how to work financial formulas, but learning to do so quickly in excel can save enormous amounts of time in the long-run. It’s the difference of going to bed at midnight and 2am. Trust me.
• Stress. We all know the first semester of business school can be stressful, but what amazes me is how easily that stress can be countered. Just taking the time to become comfortable with the basics before you start gives you confidence to excel and one less thing to think about. The mechanics become second nature, and any preparation you’ve done allows you to focus on the big picture – which of course is most important.

Rachael Klein writes in her BusinessWeek MBA Journal about her first term at McDonough School of Business at Georgetown.  She makes an interesting point about the wide range of student backgrounds and the experience level to which professors pitch their teaching:

Our class has about 240 people divided into four cohorts. We all have the same core classes in our first two modules—each module is six weeks long, goes by in what feels like two weeks, and by the end, the beginning feels like a year ago. Business school flies by at lightning speed, but the beginning feels as far away as high school.

Fortunately for the smart people, the professors teach to the top of the class and then make themselves readily available outside of class for the students who are seeing z-scores and time value of money for the first time (gently termed "poets" by a favorite economy professor). Since we all have the same classes, we help each other. Touchy-feely perhaps, but trust me, it returns full circle.

There is no way to make everyone happy in first year classes.  Each prof makes a choice, balancing the desire to challenge the more advanced students while not abandoning the "poets".  As with other schools, students get through the workload by working together and sharing strengths:

But they also admitted to being pretty exhausted from their first year. And it's true. It's exhausting. The workload is ferocious. But the solidarity of the student body is what gets us through. The fact that everyone has the same work is a relief, and well, let's be honest, misery loves company.

...

The next thing we know, the four of us are sitting around in the school study area, nursing glass bottles, discussing game theory, and painlessly finishing the assignment. Only drawback, we have about five other assignments to tackle before bedtime. But still, the experience and the overly sentimental unity we feel during times like this can't be helped. It's a great feeling, and one none of us will forget.

But remember, you take your exams alone, and beerless!

Brian Glenn writes in his BusinessWeek MBA Journal about his first term at MIT Sloan.  He describes the intensity of the b-school experience:

I remember reading some of these journals last year. One in particular mentioned something along the lines of, "no matter how much you think you're ready for the experience, it will surpass your wildest imagination in terms of time commitment, intensity, and of course what we all signed on for—fun!" Well now, standing in a similar pair of shoes, I echo these thoughts. So far, it's been the eye-opening experience of a lifetime. Literally as well, because sleep is the last of your priorities and something you can catch up on during the morning Intro to Finance class.

He discusses how his study group's mix of strengths and weaknesses helps them to get through the work, and closes his piece by suggesting that prospective students consider carefully the teaching methods (case vs. lecture) of the schools they are considering:

But for practicality's sake, can one effectively learn rule-based subjects such as accounting or regression modeling through case-only lectures? I'm probably a biased source in this argument as Sloan teaches lecture-style for most hard-core subjects, but it's certainly worthwhile to think not just about what you want to learn but how you want to learn it.

However, once we have mastered the material, or at least figured out how to come up with a reasonable answer, then we will apply these methods, sometimes cross-subject, through a case homework assignment. Homework seems evenly split between individual deliverables and team hand-ins. These are great for classes like Data, Models, and Decisions—a pseudostatistics class with a genius quant professor by the name of Bertsimas who can model anything into Excel—where we apply all sorts of Excel features and software add-ins to solve case problems. You name it, we've done it: Monte Carlo simulation through Crystal Ball, Regression Analysis, and Linear/Binomial/Non-Linear Optimizations. Eric (the Google guy) and I have jokingly pondered the possibility of adding all these tools together and whether that would simulate Marty McFly's Back to the Future DeLorean by actually seeing into, or at least predicting, the future.

Kirsten Grenoble writes  in her blog about her first term at Penn State (Smeal).  She's busier than ever but clearly has her confidence intact and is thriving.  Time management is emerging as critical:

I am busier than ever before in my life (and I was pretty busy the first time through school) and the thing that goes is sleep.

Professors in this program have high expectations. While many assignments are collected, most of the work is not. You are expected to KNOW the readings in order to participate in class and to do well on quizzes and tests. Some professors even cold call in class. Trust me…you really want to do all of the readings.

So, for the first time in my academic life, I find myself truly challenged. I’m working much harder than before and I’m loving it. In the first mod I struggled through accounting and, surprisingly, found that I really enjoyed statistics. Our management class rocked my world - this class alone should convince you to come to Penn State – and even though I had taught public speaking I still learned a lot in our communications course. Through all the demands, you start to understand that it’s not about learning balance sheets and motivational tactics. The real goal is to teach you time management. I’m happy to say that I know a lot more about that now and I’m sure the current mod will help me hone that skill even more.

How do students with less quant experience relative to their student peers balance their time in the first year, both in their individual study time and their study group meetings?

The relatively less quant experience would tend to suggest that such students need to devote more time to their quant courses, at the expense of their other classes.  But, how do students draw the line in their time management to avoid getting so sucked into quant coursework that they keep stealing time from their non-quant courses and don't get the qualitative and strategic expanding of their horizons that presumably is one of the big attractions of b-school in the first place?

Is this a real issue for you and your fellow students?  How do you do it?  What lessons can you hand back to prospective students about managing this tension and achieving your broader MBA learning goals?

I welcome any general comments or specific anecdotes about this quantitative/qualitative tension.

Some more Tuck first year feedback:

I just finished reading some of the topics of your blog and they are right on target. I especially like the one about quantitative struggles being emotional. Boy is that true!

I came to Tuck with great business experience in marketing and strategy, but the large, well-respected company that I worked for was not big on quantitative analysis of our marketing programs. Even the strategy work that I did was mostly research and writing, rather than calculations. Using mbamath.com during the summer and attending math camp gave me the basics I needed to start ramping up for the highly quantitative fall terms.

Here are some advance preparation suggestions from a first year at Tuck from the start of winter term.

Coming to Tuck I knew I had strong quantitative skills, but felt that I did not have the necessary background in Accounting and Capital Markets in particular. I would recommend to any student coming to a school such as Tuck to take full advantages of the opportunities available to get up to speed prior to starting the course.

One reason for this is that the core curriculum is so intense that any head start that you have can only make life easier. For this reason I both utilized the materials sent out by Tuck over the summer and attended Math Camp.

I was surprised by just how large a percentage of some of the courses is outlined in the materials. For example, the summer reading on Microeconomics gave background for virtually the whole course. Math Camp backed up a lot of the summer material and also helped to "clear the cobwebs" in a more formalized classroom setting. It introduced a whole range of topics I had not studied before and was specifically tailored for the Tuck course to ensure the information was relevant.

Some concepts which we spent a whole session studying in Math Camp were not even discussed in class once term had started, as their understanding was assumed. For example, I had never used Net Present Value before Math Camp, but was soon using the principle in my regular class homework with ease.

I would also recommend that anyone concerned about their quant skills should look at the Syllabus for their school (Tuck has the syllabus for each course on-line) to get a feel for the topics and material likely to be covered.

I believe that, between them, the summer materials, Math Camp and mbamath.com gave me an excellent grounding in the quant required to be successful at a top business school.

Observation #5, the last for now in a series, from Hugo Lorenson, a Rotman first year.  Thank you to Hugo for taking the time to provide his perspectives.  I welcome input from others about their MBA experiences.

Business school is MBA students’ last opportunity to bond and grow with lots of interesting people they ordinarily wouldn’t meet. Making friends and sharing great memories are what make the MBA the worthwhile experience it is. Without these outlets, business school is one lonely and stressful road.

It’s funny; out of the MBA alumni I have spoken to over the years, many pointed to the friends they made as the most important benefit of the program. Although I initially thought they were crazy, going through the program, I can see where they were coming from. Looking back on the past four months, the relationships I have been lucky to forge with some great people have been just as enriching as the things I learned inside the classroom.

I hope that all of you that enrol in an MBA program get to experience the camaraderie and friendships that are possible. In the end, that is probably what you will take with you the most.

Observation #4 from Hugo Lorenson, a Rotman first year:

I know, when you think of networking, you inwardly cringe. Those awkward moments at cocktail receptions when you feel forced to press the flesh, smile, and ask banal questions to VIPs you really don’t know. The good news, though, is that networking is pretty simple, and something that most of us MBA students do without even realizing. Speaking with our classmates about our professional aspirations, or visiting our career services office and expressing interest in a certain industry are two forms of networking. In both instances, we are publicizing ourselves and making others aware of who we are and what we like. Maybe those parties know companies who would benefit from our skill set, or perhaps they can recommend our speaking to someone who could help us more. In either case, though, we widened our networking of contacts without much effort.

Too many people equate networking with speaking with prospective employers at formal events. While that certainly is an important component, few realize that they have established networks already waiting for them. Taking advantage of these informal networks can lead to a myriad of opportunities, and helps make us more comfortable talking about ourselves and our career aspirations. So, make sure that you talk with your MBA friends about your career interests, especially if they have experience in your field of interest. They will be able to give you great advice, and point you towards helpful references. That’s not so hard, is it?

I would add to this that you should consider getting to know your professors.  Accessibility of professors is determined by a variety of factors: number of students in the class, size of the institution, and professor's personality being three important ones.  First year classes make student-professor interaction tough because teaching and supporting such a class is a flat-out sprint for a professor.  But things are different for second year classes.  Classes are smaller and the material is generally dearer to the prof's heart and professional interests.  This presents lots of potential for networking to learn more about professional practice and potential contacts in a field of mutual interest. 

Observation #3 from Hugo Lorenson, a Rotman first year:

Having excoriated one-dimensional grades-obsessed students, I will now take to task their mirror opposites: students involved with pretty much every extracurricular activity the school has to offer. While their zest for the slice of MBA life is admirable, they play a dangerous game: crammed agendas, less studying, and they become unable to spend more time on activities they really enjoy at the expense of those they do not. Also, being that busy all of the time accelerates burn-out. Rather than joining every club you can think of, only join the 1 or 2 that really interest you and/or you want to impact. Not only will you have more free time to focus on other things (like school!), you will be able to fully appreciate all that those clubs have to offer.

Observation #2 from Hugo Lorenson, a Rotman first year:

A close corollary to # (1). Grades are a necessary evil to business school. Some schools have grade disclosure policies, while others don’t, relieving students of some of the pressure of getting great grades. However, even for those schools that do have grade disclosure, it is important not to place undue emphasis on your GPA. Granted, it is hard to do this: job recruiters ask for your transcript as part of your application materials, and the high opportunity costs related to attending and paying for business school push students to maximize their marketability as MBA grads.

Unfortunately, though, a lot of things are out of your hands: bell curving, group assignments, and the inherent subjectivities of the marking process make it difficult for students to guarantee themselves great grades across the board. I have seen students agonize over a B+ when they thought they deserved an A-. To maintain your sanity, you have to recognize that grading is largely beyond your control. What is within your control is working hard, and doing your best. Alas, that simple recipe will not always translate to grades you’re happy with, but at least you’ll be happier and better adjusted when confronted with disappointing results. Remember that grades are only one component of who you are as an MBA student: your professional background, extracurricular interests, and networks are just as-if not more- important in many contexts with employers. Persons who place huge emphasis on their marks tend to be less well-rounded students, which places them at comparative disadvantages when recruiter interviews kick in.

As a Tuck professor who has to assign grades to MBA students, I can attest to the imperfection of the grading process, especially when work is done in teams.  Also, keep in mind that students who receive the best grades are generally those who had prior experience with the subject matter.  Routinely, the students who learn the most in my class do not receive the best grades. 

As someone who has recruited MBAs for a management consulting firm, grades, very few of which are available when recruiting begins in the winter at most schools, are a real but modestly important factor in finding top quality candidates.

As someone who completed graduate school 13 years ago, albeit in a PhD rather than an MBA program, and has worked in financial services, consulting, and startup positions, I cannot remember a single grade that I received in grad school.

Observation #1 from Hugo Lorenson, the Rotman first year introduced in the previous post:

Sitting in my first business school class, I was immediately struck by the incredible diversity of the student body. Age, gender, race, professional interests and a host of other variables contributed to a classroom of markedly different people. Of course, some will have more direct business experience than others, which may provide a strong advantage in some of the introductory business-centred courses (accounting, finance, etc.). However, there are also courses where previous business experience is no more helpful than any other sort of experience, where better speakers and writers get the leg up. The bottom line is: there will be people in your class who "get it" better than you do, and some who have more difficulties than you. Recognize your own strengths and weaknesses in each class and seek to leverage the former and improve upon the latter. Don’t get hung up upon comparing yourself with others.

Below is an introduction to a thoughtful sequence of observations from Hugo Lorenson, who is a first year student at University of Toronto's Rotman School:

Being only four months into my MBA journey, it would be premature for me to assert ‘guru status.’ Nevertheless, lessons come quick at the school of hard knocks. What I hope to share here are several realizations that the usual sources of information (b-school message boards, preparatory materials, school publications) tend to overlook. Hopefully, they will provide a helpful perspective as you prepare to enter the business school environment.

A sequence of observations follows in separate posts.

More student feedback on the Tuck quant experience:

My main thought from going through Fall A and Fall B is the importance of keeping one’s cool. There is a huge amount of work on top of other commitments. This stress adds to a tendency to become very uncomfortable with new terms / topics in class. The beauty of having been to Math Camp was knowing that the material wasn’t new. Even if the student can’t remember exactly what it is, they know they have seen it before and can reference notes.