Who Needs Harvard?

Who Needs Harvard? Why big corporations are hiring fewer Ivy Leaguers. By Daniel Gross Posted Wednesday, Jan. 12, 2005, at 12:50 PM PT

A coveted undergraduate admission to an Ivy League college is a ticket to success, right? But a recent paper by Peter Cappelli and Monika Hamori, both of the University of Pennsylvania, suggests that the prestigious degrees aren't as valuable at America's largest corporations as they were a generation ago. If you want to run GE, you might be better off attending the University of Connecticut than Yale.

Cappelli and Hamori compared the résumés of the top 10 executives at Fortune 100 companies—the 100 largest companies by revenue in the United States—in both 1980 and 2001. These were so-called "c-level posts"—CEO, chief operating officer, chief financial officer, chief technology officer—plus division heads and senior vice presidents.

The figures tell a story of American business dynamism. In Joseph Schumpeter's great formulation, the top ranks of American business are like a hotel where the guests are always changing. Only 26 of the 1980 Fortune 100 companies retained their status in 2001. By 2001, the executives had also grown younger (the average of the sample fell by about four years). The executives were also much less likely to have been educated at an old Eastern university where pride in high SAT scores compensates for pathetic athletic teams and lame parties.

Between 1980 and 2001, the percentage of top executives whose undergraduate degrees came from Ivy League schools fell by nearly a third from 14 percent to 10 percent. Others who paid through the nose for their sheepskins also lost ground. The percentage of top execs who attended private non-Ivy schools (Williams College, Notre Dame, Stanford, etc.) fell from 54 percent in 1980 to 42 percent in 2001. Meanwhile, the proportion of those who attended public universities soared from 32 percent to 48 percent. A similar dynamic was seen in graduate degrees as well: far fewer on a percentage basis from Ivy League schools and far more on a percentage basis from public universities.

At some level, this is a numbers game. While the Ivy League schools remain small and exclusive, public universities have been expanding rapidly, establishing new programs, and pumping more minnows into the corporate stream every year. Several Ivies don't have MBA programs, and there are top-notch business schools at Northwestern, Stanford, University of Chicago, University of Michigan, and University of Virginia. But the authors conclude that the shift has less to do with demographics and more to do with corporate practices. In other words, the bosses aren't as snowed by polished young Ivy grads as they were in the past.

I'd offer a couple of other, less quantifiable explanations. Something has changed about the character of the student bodies at many Ivy League schools in recent decades. With the rising ability of the wealthy to smooth the path to admission by paying private-school tuition and hiring college advisers and SAT-prep tutors—and with college tuition far outpacing financial aid growth—rich kids are more likely to get in, and to attend, Ivy League schools than in the past. A widely quoted study from the Century Foundation found that 74 percent of the students at 146 selective colleges surveyed came from the top socioeconomic quartile, while only 10 percent come from the bottom half! Harvard President Larry Summers devoted his 2004 commencement speech to this phenomenon. On a percentage basis, fewer Ivy League graduates than public school graduates today need to find stable, high-paying jobs at big companies. More of them can afford to traipse around Asia for a year or pursue a career in film-making. It could be that the already rich and comfortable are simply less interested in pursuing careers in large corporations than their less-comfortable public-school peers for purely economic reasons.

And for those Ivy League graduates eager to make their mark on the business world, things have changed as well. The Ivy League may no longer be the gatekeeper for management trainees at General Electric and Chevron. But it is most definitely gatekeeper for other elite employers: McKinsey & Co., Goldman, Sachs, private equity firms. A sharp kid with a degree in economics from Dartmouth is far less likely to seek a career at General Motors or American Express and far more likely to sign on with a venture capital firm or a hedge fund. An ambitious smoothie seeking to trade off reputation and old-school connections won't interview at Philip Morris or Wal-Mart, she'll interview at Boston Consulting Group or Morgan Stanley.

The numbers crunched by Cappelli and Hamori suggest that big-time corporate America is less interested in Ivy League students today than it was in the past. It could also be the other way around.

I found this fascinating. Since the early nineties I have hired for a series of my own technology companies from a pool consisting mainly of three schools: Stanford, Berkeley and San Jose State. After a while I learned that absolutely the best employees come from San Jose State. Stanford grads are the worst. I think because they've been told for so long that they are so good that they have an attitude of entitlement. Most of them owe massive amounts in student loans and as soon as they get a better offer they're gone. Berkeley grads are generally competent but seem somehow to lack, for wont of a better term, "hustle." Kids from San Jose State, on the other hand, usually worked their way through school, are very competent at what they were educated in and seem to appreciate their jobs much more. Of course this is all anecdotal - your mileage may very.

Good article and I agree with your assessments. I've had similar experience, but with other schools.

I feel that in the near future the price of a college education will be evaluated by its value very closely. It already is, but I see signs of an acceleration of this trend. The colleges sell a very expensive product and competitors are everywhere. We all don't need a Lexus. Lots of times a Toyota will do just fine.

Funny how they can't (or refuse) to see than nobody want's "poisoned ivy".

Enron had a bunch of "blue bloods", so did Global crossing. We know where they're at now. I'll take raw drive and initiative over education every time. And if I or my designates show the new hires the "ropes", there's no "poison ivy" attached to it, and all the baggage that comes with it.

One of my children is chief economist for a corporation I won't name. Unlike most higher level economists, he has no PhD degree. He was first hired out of NYU with a BA in economics. His early bosses urged him to go to night school and get advanced degrees, beginning with an MA. He started the process but as time went on never finished.

At one point, his office hired a younger hot-shot from Harvard with brilliant recommendations. The only trouble was that this kid never could manage to get to work in the morning. After a while, he was let go.

A Harvard MBA is still worth something, but I doubt if it's worth as much as it used to be, or if a Harvard degree is worth as much either.

Even many years ago I thought that Harvard, which I attended, was good mainly either for those who wanted to go into intellectual fields or those who already had high-level connections. For the average Joe it was better to go to someplace like NYU where you could intern with businesses in the summer and get a foot in the door.

One thing that has wrecked the formerly most prestigious colleges, of course, is political correctness. It's possible to go through four years without learning anything worth while at all.

You are so right.......I went to Hayward state and then Cal. The degree is just a foot in the door showing academic achievement but "experience", moxy, hustle, thinking outside the box etc gets you to the top. The degree only gets you to the interview and maybe the entry level. After that it is talent and drive that get you to the top.........are you hiring????????...........LOL.....

One caveat -- in 1980, the top execs would have graduated perhaps around 1950 or earlier. In 2001, they would have graduated around 1970 or earlier. What happened between those two dates?? Higher education opportunities, in raw numbers, exploded. The number of places at the Ivies, or at the top private schools, did not. I am quite sure that the percentage of the total college graduates coming from the Ivies, as a percentage of all graduates, fell quite sharply between 1950 and 1970.

This is interesting. Unfortunately, I don't see much evidence of it in the legal profession, where grade hyper-inflation and low attrition rates have made judging scholarly merit a lost cause for top-level firms and government offices. Maybe it has something to do with arrogance or the stultifying status quo in law, but a school's ranking in U.S. News is a fairly firm indicator of how far you will end up in life thirty to forty years after graduation. Aside from attending Harvard, Stanford, or Yale and being bright enough to avoid falling out of your shoes, getting decent grades in about 12 other Ivy or 'near-Ivies' that immediately follow them, or making top 5% to 10% and Order of the Coif in any other of the 25-30 first tier law schools, you have no realistic hope of finding work teaching, practicing, or judging law in any particularly important capacity.

At some level, this is a numbers game. While the Ivy League schools remain small and exclusive, public universities have been expanding rapidly, establishing new programs, and pumping more minnows into the corporate stream every year.

the percentage of the total college graduates coming from the Ivies, as a percentage of all graduates, fell quite sharply between 1950 and 1970.

Undoubtedly you are correct.

It seems odd. I would have thought that experienced lawyers would be able to tell if somebody knew which end was up as regards the law after a moderate-length conversation in the interview process.

I totally disagree with your assessment. As an Ivy law school grad myself, I found that my fancy degree got me in the door when I was looking for that first job, but I had to hustle for everything else.

A lot of my classmates went to work for big firms, and were the envy of the rest of us. What they didn't know was that most of those firms don't give a damn about their professional development, so they may have spent the last 7 or 8 years working on one small part of a giant case and not know how to do anything else. Meanwhile, the folks who made mediocre grades or went to less prestigious law schools actually learned practical skills and made connections with clients and colleagues. Those people, along with the Ivy and near Ivy grads with similar qualities, are the future judges and movers and shakers.

I don't know. Seven out of nine Supreme Court justices have at least one diploma from the top three; the other two have graduated from the top five. Lots of multimillion-dollar firms like Baker & McKenzie and Jones Day state in their prospecti that they look primarily to hire only Ivy Leaguers as a matter of course. Sure looks to me that the old boys network is still pretty strong in the uppermost levels.

Point is, as an Ivy-League law school graduate, your credentials have already gotten your foot in the door just about everywhere you want or would want to get a job (much more so if you happened to go to Yale or Harvard). You will be able to work hard and have some very prestigious opportunities at your disposal that graduates of most of the other hundreds of law schools in the US will NEVER be able to achieve, no matter how good the output and quality of their work.

Lots of multimillion-dollar firms like Baker & McKenzie and Jones Day state in their prospecti that they look primarily to hire only Ivy Leaguers as a matter of course. Sure looks to me that the old boys network is still pretty strong in the uppermost levels.

How much of that is from an Ivy Leaguer having any actual deeper understanding of the law, and how much from a perceived marketing advantage in being able to tell a client that a Harvard Law grad is handling their case?

I take your point on the U.S. Supremes, but I don't think that's representive of the law at large. Take a look at the credentials of federal appeals and district judges, and the judges on state supreme courts, and you will see a lot of state and regional law grads among their numbers.

Same thing if you look at the credentials of the lawyers at Jones Day or similar firms. They like to say they hire only Ivy grads, but they will hire anybody with ability, connections, or a big book of business, no matter where they went to law school. The younger associates tend to be from fancy schools, but grads of other schools catch up and come in as lateral hires. Often they have better skills than the Ivy grads, as they started in small firms on small cases that they could handle entirely by themselves. The Ivy grads in big firms, by contrast, rarely see the inside of a courtroom and spend a lot of their time doing research or pushing paper. I speak from experience in this respect. I worked at a big firm for five years before striking out on my own, and I've really had to work hard to bring my courtroom skills up to par with those of my state school colleagues.

So I guess my point is this: your law school is not your destiny, and working at a big firm is not the end-all-be-all.

The most valuable, smartest, and most helpful employee in my company is a person that did not have a college degree, and didn't even graduate high school normally (had a GED). This person is more skilled in computer technology and works harder than people I've hired with advanced computer science degrees.

I've had better luck with non-college grads. They are loyal, stick with the company, are easier to train, don't mind getting their hands dirty and they show up to work everyday.

Out of the college-grads I've hired, only a couple worked out long-term.

I hired one of the best workers I ever had off the fry line at McDonald's. I was in line with my company shirt on. He looked at it and asked me if I was with the company and I said yes. He replied "Your stuff rocks ..." I gave him my card and told him to call me. He did. He was a high school drop out and I hired him and he went on to be one of my best workers. And he kept working hard and moving up and is now the IT director of a fairly large software company in San Jose.

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