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State of the MBA - 2021 Outlook

Spring is my favorite time of year. We begin exiting our 177,000 straight days of rain in Seattle, the days get longer, and clients are hard at work, preparing for their upcoming Round 1 applications.

Before you worry, no, you are not “behind” if you haven’t yet decided whether to even get your MBA, much less started to think about the applications themselves. However, April and May tend to be when our clients who know they’re applying fully engage in the process.

Wrapping up meetings with applicants in various corporate offices over the past two weeks, many questions focused on the environment MBA candidates may face this year. Before jumping into what we expect for the 2021 cycle, one caveat. Your success as a candidate this year will have much more to do with showcasing how your experiences and perspectives will make your class better, rather than what external environment you face. Sharing your authentic story and aligning it with what your target school(s) is looking for can overcome any external environment.

With that in mind, some of our predictions for this year include:

A Return to Normalcy in the Classroom and in Applications

COVID disrupted so many parts of the process. Standardized testing. School exploration without visits to campus. Extended application timelines. Visas for international students. The actual MBA experience itself, including divisions on campus.

Thankfully with more people getting vaccinated worldwide, we expect the MBA experience for students beginning this fall to be closer to that of two years ago than of last year. Schools are already announcing a return to mainly in-person classes

Elevated Importance of Standardized Testing

Last year, several programs, including Columbia, MIT Sloan, Michigan Ross and Northwestern Kellogg granted waivers on standardized testing given disruptions at test centers and initially inconsistent online test experiences. While many schools will return to their more traditional standardized test requirements of either the GMAT or GRE, look for announcements from some schools in the coming weeks of an extension of their waiver policy for another year, reflecting the test taking environment for many applicants. Please see our note (here) about situations in which the waivers might be successful (and may not).

The Executive Assessment gained some traction with some schools like Sloan and Duke, and may be accepted by a few more schools. However, we believe broader acceptance of the EA for full-time MBA programs may wait until schools gather more data on the success of those students who used Executive Assessment scores to gain admission.

Application Pool May Return to Pre-Pandemic Levels, but Remains Exceptionally Competitive

Relaxed standardized testing requirements increased MBA applications at several top schools in 2020. For instance, Columbia reported an 18% year-over-year increase in applications for the cycle up to Sept 2020, vs. flat up to Feb. 2020, after suspending standardized testing requirements after their Round 2 deadlines. Recent discussions with Kellogg, Stanford, HBS and other top schools also suggests demand approaching or exceeding record levels last year.

With class sizes of top MBA programs remaining largely stable, we expect many of those applicants who did not gain spots last year to try again this year. There are also some candidates who were deferred during the pandemic who will be joining the Class of 2024 at some schools. The strong job market may offset some of this (several of our clients chose to remain in the workforce, and MBA applications overall are generally counter-cyclical with the macro economy), but the prospect of attending a top-10 MBA program remains a life-changing opportunity that top-achievers find difficult to resist. Consequently, we believe successful candidates for the Class of 2024 will require profiles at least as strong as the Class of 2023.

Round 1 Will Continue to Be the Larger Round

Given the pipeline of candidates carried over from last year, we expect Round 1 to again represent the largest round in this year’s application cycle. Changing standardized testing requirements continues to lead many candidates to explore an MBA when they otherwise wouldn’t have, and strong post-MBA job markets continue attracting candidates to an MBA seeking faster career growth. Moreover, candidates with more traditional pre-MBA backgrounds (i.e. investment banking, consulting) will prioritize Round 1 in order to allow them flexibility in Round 2 for any course correction or maximizing of options.

Rising Expectations for Performance During COVID

A key challenge for applicants this year will be articulating the positive impacts they were able to drive in their communities despite COVID. Yes, COVID caused job disruptions, and changed how people were able to interact in their communities and with their networks. However, schools will be wary of anyone treating 2020/2021 as a “lost year”. Many companies and people thrived, gaining promotions and growing businesses despite challenging circumstances. Others successfully pivoted to new roles (or created them) when facing roadblocks due to COVID. Expectations of what successful applicants could reasonably have achieved might have changed (in-person volunteering opportunities), but they will not have declined.

Consequently, we expect successful applicants will increasingly demonstrate how they thrived despite COVID. This could include community outreach (helping teachers at a local school with supplies/meals, supporting a local family in need) and professional successes (starting a business if facing a job disruption, or mentoring a teammate through a family/health crisis). Schools will know that professional successes during 2020 have been constrained by COVID (we had several clients with delayed promotions in harder-hit energy, tourism, and entertainment sectors), but will look for how impacted applicants adapted to those constraints. The good news is that applicants who can demonstrate that positive impact will stand out even more memorably vs. peers.

Goal Flexibility for Reapplicants

In prior years, reapplicants faced balancing how they had improved from their previous application, while still showing consistency in their longer-run goals. For instance, an applicant pitching a return to investment banking in one year might be met with skepticism if they were pitching non-profit sustainability a year later, without a compelling story as to why the goals had changed.

COVID has changed how Admissions Committees view revised goals. They know applicants have witnessed first-hand the profound impact of COVID on healthcare, finances, interpersonal relationships, supply chains, and leadership. Several of our clients have been impacted, either themselves or with close family members. Consequently, schools will likely be more receptive to revised longer-run goals vs. what prior applications would have mentioned. If COVID shaped your longer-run goals from your MBA, don’t be afraid to explain how.

Fewer “Maybe” Answers

When there is uncertainty, it impacts all areas of the process. In the last two cycles, the use of the waitlist/waitpool spiked dramatically. That can be difficult when you’re trying to navigate such a significant life choice, making a commitment to a program and a city for two years. We expect that the return of more certainty in the process will reduce the use of the waitlist/waitpool in the 2021-22 application cycle.

Overall, we expect competition for spots at top MBA programs to be at least as strong as last year. Should this impact when you choose to apply? No. Your decision when to apply should be more driven by how attending school will further your longer-run goals. Instead, use this and other perspectives to shape your application and maximize your chances of success!

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