You can certainly argue the merits of having an MBA, but most of the people I know who hold that degree believe it was worth the time and expense. Judging from consistently full rosters at the top b-schools, young people believe it will be for them, too. I recently had the chance to speak with students at several of these schools, and doing so brought back great memories of those two years. However, our discussions also drove home a painful realization for me as Proformative’s CEO and as a many-time CFO : These kids generally have no clue what we do in corporate finance!
Corporate Finance = ‘Safety School’
Perhaps your alma mater gets it right, but in general, business school "finance" classes focus on things like pricing bonds, running NPVs and figuring out your cost of equity with CAPM calcs. These have their place and time, but they make up a vanishingly small percentage of what we do every day in corporate finance, and they do nothing to teach students about the great careers available in our functions. The result is that corporate finance takes a back seat to management consulting and investment banking – two fields with the highest burnout rates and steepest career paths, and which have less impact on the enterprise than corporate finance.
Corporate finance, accounting and treasury functions are the bedrock of corporations, and, unlike management consulting or I-banking, these careers get to the heart of long-term company building and value creation. I think of corporate finance and related functions as what drives companies to create, grow and always improve. And this is what we spend our days doing – not interminably closing the books or doing linear equations, but rather building companies. This is our job, and what an amazing job it is. This is the core of capitalism and the core of America, and yet our best and brightest students consider it a backup plan in case they don't get that hot job on Wall Street. This great profession of ours is, to them, the equivalent of a safety school.
In my discussions with students, it’s quite clear that the issue is not that they think corporate finance is a horrible career; they simply don’t know anything about it. They don’t know what finance does or what a CFO does. They don’t know what controllers or treasurers do, either. In fairness, they also don’t know what management consultants or I-bankers do, but those industries recruit more heavily on campus and come with a lot more swagger when they do.
We Should Care About This
What can we do about this? Do we care? Is it okay to let business students believe that finance and related functions don’t matter? I don’t think so. I am not content to let corporate finance take a back seat.
To teach business students about our profession as we know it, I recently arranged for an event at my alma mater wherein finance executives from companies large and small conducted a panel discussion and networking session about working in corporate finance. The students learned a lot from these leaders, and the finance alums loved giving back to their school in a meaningful way.
The positive feedback I received while recruiting executives for this event is proof positive that those in our field want to bring bright young minds into the fold. The event was such a success that we are already planning to repeat it next year in the fall, when first- and second-year students are most engrossed in the career-selection process. We are also taking our efforts online, on Proformative, where students can find mentors and also learn a lot about the nuts and bolts of our jobs.
Are You In?
I am eager to show these future leaders that helping build the next GE, Cisco, Google or “that company down the street” in a finance role is a great endeavor and something worthy of their time and energy, and I hope you will join me in this effort. If you want to reach out to students at your alma mater, please contact me directly at jkogan at Proformative dot com. We will happily help you a) rally other corporate finance alumni at your school; b) get the school administration and professors on board; and c) get similar educational events going at your school. Proformative is fully committed to having a positive impact on the coming generation of business leaders. Let’s unite to make a difference in these students’ lives, in our professions, and in our economy.