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March 31, 2020

The Worst of Times Creates New Options: Applying for MBA and Other Graduate Programs Now

The Coronavirus pandemic  is a pure example of a  VUCA (Volatility Uncertainty Complexity Ambiguity) situation. To get my head around how it would impact MBA students and applicants, I engaged  in some scenario analysis and as the situation develops, so is my thinking. In this post I give some initial suggestions for how to think about making application to MBA and other graduate programs in a VUCA world.

Considering to apply right now is about making a career and education decision in world that has suddenly become much more volatile, uncertain, complex, and ambiguous. 
Volatile: For anyone considering the time and money required for a full-time MBA or other graduate program, whether in their home country or overseas, the current situation is extremely volatile in terms of both the pandemic itself and its effects on economy and society.
Uncertainty: It is certainly uncertain because we really have no clear idea how bad things will go for ourselves, our loved ones, our country, and our world.  It is also uncertain because we have no clear sense of how long this will last and what the aftereffects will be.  We can develop scenarios (like I did) to get some kind of perspective on this but these are just possible stories and knowing which scenario to act on is no easy thing.
Complex: It is complex because one needs to consider a greater number of options and outcomes based on either applying now, applying later, or not applying. Will it easier to get in to programs for 2021? If so, will Coronavirus be handled by then?  Should an applicant focus on GMAT, GRE, and/or TOEFL prep now or wait to see how how things shake out? Maybe it is better to wait until 2022? Alternatively for those considering applying to schools in their home country, is it better to apply for entry in 2020 because so much uncertainty is resulting in schools extending deadlines.  For example, for US citizens and residents, there is a good argument to apply right now for fall 2020 entry to MBA programs  if you don't primarily care about scholarships and prioritize getting the degree over the experience if programs stay distance-based in the fall (or even longer).
Ambiguous: It is ambiguous because both  the learning model and the outcome become much less certain. In terms of the learning model, for MBA programs that would be an experiential, group based learning experience with a diverse set of classmates in an intensive community.  This spring is already been totally disrupted into a much more limited distance based model. We cannot be certain that programs will return to normal by the fall. In terms of outcomes, the assumption for MBA and other types of professional graduate programs is that doing the program is a direct gateway to internships and employment but this becomes much less certain for all students if the world economy goes into a deep recession.  There are clear enough signs that the outcome is also in peril as employers are rescinding job and internship offers. For applicants with partners and applicants whose families will be providing financial support, the ambiguity of the return on investment for doing a graduate degree becomes much greater if they factor in what those in the classes of 2020 and 2021 are currently experiencing.  For those who are admitted for fall 2020 and those considering 2021, the question is will things recover fast enough that an MBA from a top school leads to the expected post-degree employment outcomes or does doing such a degree now result in loss of income and assets at the worst possible time?  It is, after all, one thing to graduate during a recovery and another to graduate during a prolonged recession.

How do we react to a VUCA situation?
It is my contention that we can react to such VUCA situations by panic, paralysis, or thoughtful action.

Panic is thoughtless action and results in, at best, lucky outcomes based on bad decision making. As someone who has experienced panic in the past (for example, panic about catching airplane flights), I know that my panic did not help me in the least and sometimes cost me (very expensive taxi rides to make an alternative flight and looking like an idiot). My panic started to go away when I began really thinking about what the worst case scenario was and started to create space for non-reactive thinking.  Attending a masters program in clinical and organizational psychology at INSEAD helped and so did doing mindfulness training. The more I have been able to get away from panic, the better the decisions I have made. I don't think I am unique. I fully expect some admits to graduate programs that commence in fall 2020 are experiencing panic. International students in the US are worried about their visa status.  International student admits for fall 2020 will be worried or already starting to worry about getting visas,  Those graduating in 2020 are worrying about jobs, those others are worried about internships. Those who planned to apply for 2021 admission are worried about everything happening in their daily lives and suddenly planning for the future takes a back seat.   Suddenly ones core life plans seems to be potentially falling apart.  This is an awful thing but also a moment for deeper consideration.

Paralysis only works if the most beneficial course of action is doing nothing and the situation returns to the status quo. There are certainly times when taking no action is actually best. There is a good argument for holding an investment in bad times and taking no action at all if one is playing a long-term game, however that is decision based on a strategy. Paralysis is about being unable to do any thinking about the future but to be so filled with doubt, anxiety, and fear that thinking can't occur. However decisions about your career or educational plans over the short to medium term will require action at a certain point. Hence active thinking and planning are critical.

Thoughtful action when we combine date gathering, deliberation, and reflection with the ability to make a decision. It means being able to create a space to think through an idea, have back-up plans, and remain mentally flexible.  Especially when VUCA is high you need to be able to think well, think often, and change your plans as the situation changes. Therefore, give yourself options: Focus on what Nicolas Nassim Taleb calls optionality from his now increasingly prophetic Antifragile.  A great explanation of the idea can be found here where its author, Taylor Pearson ,summarizes optionality as follows:
At the most basic level, optionality just means having lots of options.
If you develop a skill with many possible job opportunities, you have more optionality than someone who develops a skill that only has one or two job opportunities.
The advantage of optionality is that as the world grows increasingly difficult to predict, you can thrive in spite of not knowing the future.
You simply see what happens and exercise whichever option turns out to be most advantageous.
In other words, when you are facing a situation of great unpredictability have multiple winning strategies. Let's consider what that might be for fall 2020 admits and 2021 applicants.
First, now is stupid time for applying to or attending safety schools.  In uncertain times, the rush to safety seems rational, but going to school that will not give you the expected ROI that you want is not a safe decision, it is a stupid one.  Also the market has shifted from a seller's (school) to buyer's (applicant) market.  What is safety for one candidate is not for another. For  some people, nothing outside of HBS/Stanford/Wharton will make sense while for someone else it might be a top 20 school. Unless you simply must do an MBA, I would make the case that applicants right now for  3rd/4th round fall 2020 and for 2021 should only apply to what ever they would consider to be top schools.  Since the job market and internship opportunities might be limited go with a school less likely to be negatively impacted and with long-term brand value.  If you are going to take 10-24 months out of employment right now and probably go into debt and/or use your own or your family's assets, make the best possible investment you can.  That means if you are fall 2020 admit and don't really like where you have been admitted, wait to see if you can defer and apply to what you consider to be better programs for fall 2021.  To quote myself from a recent article in Poets and Quants: “For a long time, MBA admissions at top programs has been a seller’s (adcom) market but right now it is surely a buyer’s (applicants) market.  Applying now and for fall 2021 will be an immense buying opportunity for anyone who can flexible about what their MBA program will consist of.”

If you are admitted for fall 2020, don't quit your job until you have absolute certainty that you can start in the fall. If you are going to be an international student and dependent on a US, European, Singaporean, etc visa that has yet to be issued, don't quit your job for sure.  If the school gives you a distance option for the fall you may wish to take it while still working. If the school only offers deferral or if you prefer deferral, be in a position to work for the next year.  This gives you at least two winning options. If you want more, see below under "non-degree alternatives."

If you are planning to apply for 2021, I recommend you operate under the assumption that if you apply and are admitted, you may not attend anyway.  The reason for this is that will help to keep you focused on the bigger picture of your non-applicant life. Whether that is focusing on work, volunteer activities, or relationships, don't over-invest in the process because that will shut down your other options.  Depending on how much time and/or money one needs to invest into test preparation, learning about programs, and applications, the application process can be just one thing someone does or an all consuming activity.   I would make the argument that this is not the time to make it all consuming but to define how much effort one is willing to put into it.  If a new client asked right now whether it was better to invest extra time into getting a job promotion or into getting a few more points on the GRE or GMAT right now, my answer would be easy: Focus on the promotion because if the world sinks into an extended recession or depression,  you may decide to put off an MBA for a few years.

You want to make a change in your career and life soon and view doing a graduate degree as the way to do that. Well, consider non-degree alternatives for the next 1-2 years:  Yes, I do give advice that seemingly operates contrary to his own short-term economic interest (having clients this year). That is because I take a long-term perspective on what is in my interest. I am interested in helping clients get into top schools and being able to make the best possible case for themselves. Hence someone who learns a new language, learns how to code, passes CFA, starts volunteering, or gets a new job that adds a new dimension to them becomes a better candidate. And better candidates get into schools, say wonderful things about to potential clients, and keep my business going. When I conduct initial consultations, I have frequently told a prospective client that they could apply now or later because I take a long-term perspective.

Finally, I think you should take a long-term perspective too! That means  thinking deeply on what you want out of life and what point you need to reach certain objectives. Society, family, friends, and yourself will tell you what you should do in the future based on what has happened in the past. If our current crisis is a reminder of anything, it is that past practices are not always appropriate for building a successful future.

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