The Role of Higher Education in the Future of Banking

What skills must a banker master to succeed in the future?

I am hoping to answer that question, with plans to present my findings at the Ole Miss Banking and Finance Symposium on Sept. 23.

You can help completing a survey on the topic. It shouldn't take but a few minutes, but your input and perspective will be invaluable. Thank you in advance for your help. I am hoping to complete my research by July 31, and I will be sure share the results.

Stay tuned!

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Networking Crash Course: The Grove at Ole Miss

The Grove.

I was in Oxford, Miss., last week speaking at a finance symposium, and I extended my stay to go to the Ole Miss-Auburn game. I was looking forward to the game, but I was more interested in witnessing The Grove firsthand.

For the indoctrinated, The Grove is a roughly 10-acre grassy plot in the center of campus. Heavily shaded by oak trees, the field is populated the night before home games by scores of pop-up tents as thousands mix and mingle before kickoff. The football team also passes through The Grove on their way to Vaught-Hemingway Stadium.

The Grove is a great place to hone your networking skills. For starters, people are extremely welcoming. Its true, even if you happen to walk into the wrong tent, as I did. You're going to meet people from so many backgrounds: finance, marketing, manufacturing, management. Because it is typical to pop in and out of the tents, you will also see a constant stream of new faces during a visit. 

Add big-screen TVs (tents can run power lines through the field), catered platters and a mix of beverages, it is easy to settle in and relax.

A few tips. It helps to meet folks ahead of the game. They can help you navigate the dizzying maze of tents that sprawl across the Grove, and they can direct you to a few specific groups.

At the game.

It also helps to have a short mental bio and a funny story or two in mind to break the ice with new acquaintances. You'll get asked about where you live, where you went to school and why you're in town so be prepared for small talk.

I always try and learn an interesting fact about everyone I meet. It could be an upcoming trip, which colleges his or her kids are considering, or a hobby. Names challenge me, especially when I'm meeting many new people. 

Learning facts helps you connect, and it shows the person, if you meet again, that you were paying attention the first time you met.

You can also try and find opportunities to start conversations with smaller groups. At its peak, The Grove is filled with people, which can make networking daunting, especially for introverts. So I suggest visiting smaller tents or walking up to groups of two or three people to talk.

And know your audience. I studied up on Ole Miss and the football team before heading to Mississippi and I spent time around campus the day before the game. Immersing yourself in the local environment can help feed conversation as well. I even bought an Ole Miss hat (I couldn't let anyone think I was there to see Auburn!)

Here's a quick aside for entrepreneurs, there's good money to make providing services to those who host tents. A banker I met during my visit told me about a client of his institution who pulls in six figures setting up tents and offering catering services. 

Another article I found notes that people charge $150 to $400 to set up tents. One guy said he sets up 60 tents a week at roughly $200 each, pulling in $12,000. That is amazing!

Why Wake Forest Pulled the Plug on Its Full-Time MBA

Wake Forest University was faced with an unenviable task over the summer that ultimately led to the decision to do away with its full-time MBA program.

On one hand, the school had the option of continuing to pour resources into the program, continuing a practice that had been going on for years. In fact, administrators and the board of visitors ramped up investment last year, about the same time that a new $50 million building had opened its doors.

But those investments yielded marginal results, as Wake Forest flirted with top- 50 status rather than rising dramatically up the national rankings. (The full-time program fell from #44 in 2012 to #58 in this year's rankings.) And, to hear Dean Charles Iacovou discuss it, the full-time business school sector is showing general signs of secular decline.

The other option, the one that the school ultimately chose, was to shut down the daytime program to allocate funds and other resources to its other programs, including a part-time MBA and two undergraduate programs. The goal is to have all three programs in the top 15 nationally, which seems feasible if things fall into place.

Charles Iacovou

“The MBA market has changed” in recent years, Iacovou told students and alumni during an hour-long conference call Friday to discuss the changes. “The full-time MBA market is oversaturated and in decline. There are many reasons, including changing student preferences and how they want to access education. Few are willing or able to forgo income for two years.”

Initially, I was shocked at the decision, but after listening to Iacovou’s reasoning and thinking broadly about graduate level education, I am willing to give him the benefit of the doubt and see where this new initiative takes the university.

Sudden and decisive change isn’t easy, and it certainly rankled enough alumni on yesterday’s call. But good managers have to realize that, in order to achieve long-term success, everything must be on the table.

There are no sacred cows, right? This is particularly true when there are shifts in the marketplace. That is why publishers are shutting down newspapers to turn to online journalism and why scores of banks are shutting down branches in the face of rising technology use. It is the reason why manufacturers close U.S. plants in favor of lower-cost production facilities overseas.

Why should Wake Forest behave any differently?

To his credit, Iacovou handled himself well during the call, giving over a dozen callers ample opportunity to ask questions and, at times, vent about the decision. He also took full ownership of the proposal and the decision and, I’m sure, will take full ownership over execution as it takes place over the next two to three years.

“I came here to teach the [full-time] MBA,” he told one particularly upset caller. “For me to make this decision, with the advice of my board and the rest of the administration, was not an easy one emotionally … but I feel that this is the best decision for our school.”

Iacovou gave a timeline that reveals the frustration felt when an increased investment last fall failed to produce desired results in the full-time program. Steve Reinemund retired as dean shortly after the board of visitors gave mixed reaction to plans to keep investing the program, and Iacovou was charged when he succeeded Reinemund in July to take a broad look at all programs.

After having private conversations in August and September, Iacovou made the proposal on Oct. 2 and the board unanimously supported it. The announcement was made less than three weeks later.

This phase of planning is perhaps the one that upset alumni the most, given the secretive nature of the talks and the fact that broader buy-in wasn’t sought in advance of an announcement. Iacovou’s response to that criticism was quite simple – he didn’t want the plan to get leaked before he had a chance to announce it.

Eric Wiseman

“We had to approach this in a way that didn’t make it public that this choice was being discussed,” Eric Wiseman, chairman of VF Corp. who also chairs the board of visitors, added. “It would have created a big communication problem for this school.”

While that makes sense, alumni certainly have the right to be upset that they were approached about donating to the program last year. As part of the Wake Will campaign, alumni were given the impression that $10 million of the $100 million targeted for the business school would go to the full-time MBA program. (In comparison, $20 million was earmarked for the other three programs, including just $2 million for the part-time program.)

Bear in mind that the Wake Will initiative was unveiled while Reinemund was in charge. Iacovou was brought in with a different mandate from the board of visitors. He examined scores of data, both internal and external, and made a bold call.

Iacovou noted during a call with recruiters Monday that only two demographic groups are growing at U.S. business schools: international students and so-called pre-experiential students, or those that are 24 and younger. Wake Forest clearly remains committed to the second group, through its MA and MSA programs.

Obviously, the university will no longer court foreign students the same way it did when it offered a full-time program. 

That is unfortunate since international outreach was a key part of that program, with each class typically having 10 to 12 foreign students. (It was certainly a priority for me when I was running the school's social media platform.)

Still, Iacovou said during his conference call with students and alumni that Wake Forest has international students in its undergraduate and part-time programs. "We have a very diverse student population, and we'll continue to invest in it," he said.

Diversity, in terms of students and faculty, "is an extremely critical component of our educational approach," Iacovou added, noting that the existing part-time programs have a broad range of social, economic, educational and racial representation.

Recently released data suggest that full-time MBA applications are rising, at least at 61% of business schools polled by the Graduate Management Admission Council (compared to 28% in 2011). Wake Forest must be among the 35% of respondents that are seeing applications decline. Iacovou and the board of visitors strongly believe that any broad increase will be short-lived and that the long-term trend will be skewed toward decline. Only time will tell if they are correct.

Could Wake Forest compete in other areas?

My better half, Vaishali Shah, made another salient point while we were listening to the conference call, noting that Iacovou could change the game for MBA recruiting in North Carolina. True, Wake Forest will be unable to compete with candidates who are intent to leave work for two years to attend Fuqua or Kenan-Flagler. 

But the school will be in a better position to target candidates who are on the fence about leaving work, or those who can’t afford to do so. The administration could also have a chance to recruit prospects who, given the opportunity to attend a quality university part-time over a top-25 school full time, would choose Wake Forest.

Maybe it is a family situation. Perhaps it is undergraduate student loans or other forms of debt. Or it is a change in employers’ preferences. But, as Iacovou noted, twice as many business school students are choosing part-time programs over full time. There is more demand – and now we're telling those prospects that there are options for them if they are unwilling, or unable, to walk away from their jobs.

Indeed, there are risks. One thing that concerns me is the recruiter situation. Administrators said during the call Friday that nine of the 38 recruiters for its MBA candidates only want full-time graduates. That is nearly a quarter of our recruiters who could pull out because of the decision. However, Wake Forest has six recruiters in Charlotte who only want part-time grads. It is a question of tradeoffs and whether Wake Forest’s staff can fill the void left by vacating recruiters.

And now we wait. I am looking for two things to take place to validate what Iacovou, Wiseman and others said on the call.

I'm looking for other programs to follow Wake Forest’s lead. Iacovou said Virginia Tech and Miami University in Ohio have already gone this route, but higher-profile schools will need to do so to validate Wake Forest’s directional shift. Iacovou said deans at a number of well-regarded schools are having this discussion. It will be interesting to see how many turn talk into action.

Execution is critical. Iacovou said he plans to boost enrollment at the MA and MSA programs by 29% and 20%, respectively, while getting the undergraduate program in the top 10. He wants the part-time program, which cracked U.S. News & World Report’s top 20 this year, to make it into the top 15 in short order. Iacovou wants to establish Wake Forest’s hybrid model before expanding part-time enrollment.

Alumni will also be keeping an eye out for recruiter additions and departures, along with any announcements associated with faculty. Keeping people in the fold will be important, and Iacovou is confident he can do so.

All targets and objectives will be closely watched. And the administration must now stick with the course it has set for the business school. There is a thin line between embarking on a bold strategy and employing a series of tactical moves in an effort to follow the marketplace.

It will also be interesting to see if Wake Forest remains committed to the strategy. It will be tempting to add an online degree, which Iacovou said isn’t in the plans for now. Still, he made it clear that the administration and the board are willing to make other bold, decisive moves if they believe it will better serve the business school.

“I don’t believe any business school, including ours, will remain relevant and become successful unless we ensure that whatever we do is with an eye to satisfy emerging needs in the marketplace,” he said. “We are a school of business. We are a school for business. Our brand will continue to be enhanced as long as what we do is market relevant.”

6 Questions on Wake Forest Quitting the Full-Time MBA

Wake Forest University will hold a conference call today at 3 pm EST with students/alumni to discuss its intent to eliminate its full-time MBA to focus on programs for working professionals. 

In the last day or so, I have had discussions with a several people, and have watched what people are posting on social media, and here are some six questions I think should be answered during the conference call.

Let me know what you think.

• Who came up with the idea and how long have administrators been discussing it? What was the faculty involvement?

• The administration should be asked to discuss the planned change within the context of the time, money and resources that have been invested in the full-time program, particularly over the last six years. How supportive has former Dean Steve Reinemund been with the decision?

• Will Wake Forest still offer part-time classes during the day? Or will all MBA classes take place at night or over the weekends?

• What impact, if any, will there be on MAs? Many of those students enroll in the MA program with an understanding that they will go to work and come back after a few years as part of the full-time program.

• Dean Charles Iacovou told the Triad Business Journal on Wednesday that there are no plans "at this time" to offer an online only degree. Is he keeping the door open for such a move?

• What other universities have eliminated their full-time MBA to focus exclusively on part-time programs? Is there any data available to show how successful they have been?

Those would be some of the questions I'd ask, both as an alumnus and as someone with a keen interest in the future of business school education. Am I missing anything?

UPDATE: A follower on Twitter had a great question to add: How will the change affect donors and endowed scholarships?

Wake Forest Eliminating Traditional MBA Program

Change has been a constant theme at the Wake Forest School of Business in recent years, but the decision to do away with its traditional full-time MBA program comes as quite a surprise.

Charles Iacovou

From what I understand, this year's class will be the last one to complete a typical full-time program as Wake Forest spends the next two years phasing in its new, flexible program. Wake Forest also said in its press release Wednesday that it would incorporate some online offerings, which had been long rumored as a potential move.

"As Wake Forest prepares tomorrow's business leaders for an ever-changing global economy, we must be nimble and innovative in how we educate our students today," Charles Iacovou, who became the business school's dean earlier this year, said in the release. 

"Business models are evolving more rapidly than ever and business education must innovate," he added.

Iacovou expounded on his thinking during a very brief conference call Thursday with employer partners.

"We believe this is a bold, innovative step ... that reflects the changing demand by students and organizations in the way they seek MBA education for their talent," he said. "This school will always be committed to the marketplace ... but we must be ahead of the changes and not following the pack."

Only one participant asked a question, inquiring whether part-time MBAs, who are already employed, are actually in the program because they are interested in finding new jobs.

Iacovou responded that there had been an increase in the number of part-time MBAs who want to switch careers. As a result, Wake Forest has been offering career services to part-time students that it used to offer exclusively to full-time candidates, he said.

"We also have employers who are recruiting in the evening MBA programs," he said.

Wake Forest is planning outreach, with a call set for students and alumni on Friday at 3 pm, and another call for employers and recruiters, which will take place on Tuesday, Oct. 28, at 3 pm.

Mercy Eyadiel, executive director of employer relations, said during Thursday's conference call that the university is planning to make personal calls to recruiting partners over the next week.

This particular move is interesting, even with the university's recent history of readily embracing significant change. Could an online only program, which I tossed out as an idea in September 2013, the next bold move?

Reinemund, a former CEO at PepsiCo who become dean in 2008, had been an aggressive proponent of change, beginning by merging the Babcock and Calloway schools under a single university brand/model. He then raised more than $50 million to build a new complex for the unified business school.

Wake Forest also made a number of changes under Reinemund in order to improve its national ranking, tinkering with the class size, scholarships and student selection as it looked to move up. The university also poured resources into its Charlotte campus, culminating with a new downtown location.

Reinemund retired in May, and now Iacovou seems ready to shake things up even more. Students and alumni must have a lot of questions about the sudden shift. I am curious whether the school will also do away with concentrations, such as finance and marketing, since those are not a part of its part-time curricula.

On one level, it looks like Wake Forest is shifting resources to the program that has been getting the most traction nationally. 

The university's full- and part-time MBA programs have been headed in opposite directions in the past few years, when looking at U.S. News & World Report rankings.

The full-time program was ranked #44 in 2012, while the part-time program came in at #32. In this year's rankings, the full-time program was #58; Wake Forest's part-time program cracked the top 20.

Enrollment and tuition may have factored into the decision. The full-time program has about 115 students, while the part-time programs in Winston-Salem and Charlotte have 285. 

The annual cost of the full-time program is about 16% higher than that of the part-time program, at $41,316. Part-time programs also become more attractive to prospects if their employers pay a portion of the costs. 

Perhaps the greatest expansion opportunity for a flexible daytime program rests in Charlotte. And I wouldn't be surprised to see, at some point in the near future, a completely online MBA from Wake Forest. (This year's top-ranked MBA program, at Indiana University, had an enrollment of nearly 750 students and a tuition rate of $1,175 per credit.)

Wake Forest noted in its press release that it is not the first school to focus on flexible schedules. It also cited a report that nearly two-thirds of U.S. MBA students are enrolled in programs that could take place while they remain in the work force, while noting that traditional daytime enrollment is decreasing at many business schools.

While I'm unsure about the benefit of nixing a traditional program, I am optimistic that the move will help bring more collaboration across the student body.

I have always believed, for instance, that evening students should be allowed to participate in areas such as the annual Marketing Summit, which had a rule barring part-time students from competing, and student government leadership. Certainly that rule must be evaluated given the upcoming changes.

Overall, the decision makes me nervous, but I'm also willing to see how it all plays out. Change is a constant everywhere, and the ultimate determinate of success could be in how the university executes on this new vision for its business school.

Why Hotels Should Ditch Tiny Shampoo Bottles

An odd collection of hotel freebies

Like many people, I have a tendency to take the small bottles of shampoo and conditioner home with me every time I stay at a hotel. I travel a lot during the fall, so my bathroom closet typically fills up with the tiny, one-ounce bottles. 

I'm not entirely sure why I do it, but I find a certain amount of solace knowing that it is a rather common practice among travelers. 

And you never know when you'll need a tiny vial of mouthwash, right?
I was staying at the Queen & Crescent in New Orleans last week when I noticed something different in the hotel's newly renovated bathroom. (In fact, the entire hotel was overhauled last month.)

The hotel management had replaced the usually array of mini-bottles with three nine-ounce containers, equipped with a pump dispenser and firmly attached to a wall in the shower stall. That's going to be hard to pilfer, I thought at first. Then, after thinking about it, I realized the cleverness behind the concept.

Think about it from a cost perspective. Retailers sell one-once bottles of shampoo and conditioner for roughly 24 cents to 53 cents a piece, though I'm sure big hotels can get a lower rate for buying in bulk. The average hotel stay is 2.2 days, from what I can tell. 

With those numbers, a 200-room hotel could spend anywhere from $24,000 to $53,000 a year if they offer three one-ounce samples per room. And that estimate doesn't even include mouthwash, bar soap, shower caps and other amenities you often find in hotel rooms.

Hoteliers have choices to make. A 2002 article in Forbes estimated that free toiletries could add up to $50 to the cost of a room. Given the supply of hotels, and increasing frugality among travelers, this seems like a huge cost to just bake into the price. 

So a number of hotels, including the Queen & Crescent, are opting to cut overhead by switching to more bulk products. At least that makes sense from a financial perspective.

How am I going to take these home...

Queen & Crescent sees other benefits from making the switch, says Bruce Westerlin, the hotel's general manager. (Yes, I did call the GM to discuss the decision to replace tiny bottles with bulk dispensers.)

"It really wasn't a cost issue," Westerlin says. "The cost is better, but not by that much."

Westerlin says the hotel wanted to be more eco-friendly while helping visitors avoid embarrassing situations where they might need shampoo after hopping into the shower. 

The general manager declined to discuss dollars and cents, but he noted that the Queen & Crescent is buying Gilchrist & Soames products in one-gallon jugs to periodically refill the dispensers.

The dispensers, meanwhile, are sold by a firm called Aquamenities in Lafayette, Calif. I reached out to the company for a price estimate, but for now am relying on a number from another website that shows that each dispenser sells for $114. That would require an upfront investment of $23,000 for a 200-room hotel, though there is a good chance a large hotel could negotiate a bulk order discount.

"A lot of boutiques are going toward" the dispensers, Westerlin says. "Everyone is also going toward showers rather than baths. This was something we wanted to do ... and we think they're neat."

You always have to consider the potential downside of making changes. I was talking to a consultant recently about this, who astutely pointed out the potential loss of off-site branding. He noted that many bottles include the hotel's name, which can jog your memory weeks (or even months) after a stay. And it could also push someone to buying a particular type of shampoo at some point in the future.

So what am I going to do with all these bottles? I know, I should hand them out as Halloween treats this year. Then again, I will need to keep some on hand to help clean up after an assured egging!

Marketing Lessons From A Foo Fighters Fanatic

Foo Fighters at The National, Richmond, Va.

Dave Grohl and the Foo Fighters just premiered the first episode of Sonic Highways, an HBO series and companion record that follows the band across eight cities as they ingest and pay homage to the diversity of American music.

I was among a limited number of fans, roughly 1,500, to get into the Foo Fighters’ crowdsourced show at The National in Richmond, Va., on Sept. 17. It is widely believed to be the first time that a rock show has been organized in this manner, and Grohl has said it could be the future of concert promotion.

Most attendees paid $50 for the show, before it even existed, with a promise of a refund if the Foo Fighters declined the invitation. I, on the other hand, missed the window of opportunity to buy tickets. As a result, I had to pursue a much more challenging route to get there by attempting to win tickets offered by the concert’s commercial proponents (Sugar Shack Donuts and Brown’s Volkswagen).

Along the way, I learned a few lessons that I believe apply to marketing, particularly when dealing with social media. It took some time, but I ended up winning not once – but twice – on the day before the concert.

Here are some of the things I gleaned from the nearly two weeks spent trying to win tickets:

• Form A Network: I was striking out constantly until I connected with other folks (Cathe, Faith, Joanne, Mark and Shannon) who were also vying for tickets. We bonded on Facebook, eventually calling ourselves the “Foo Five” while keeping each other informed as to contests and other promotions. When it was all said and done, every member of our unofficial group had tickets in hand.
• Create a Brand: We had our alliance formed, but we still needed a way to stand out and get noticed. Brown’s VW was making full use of hashtags, so we decided to create one of our own. Whenever possible, we would drop #FooFive into our posts. We knew we had traction when other people starting referring to our group using our hashtag. We were on the radar screen.
• Make People Notice You: I could have easily called this section Persistence and Persona (which would be a great name for a Foo Fighters record). AOnemember of our group, Mark, excelled at this. One evening, he found so many creative ways to post on Brown’s VW Facebook page. He wrote witty messages and uploaded photos with slick captions, including one where he doctored Brown’s winners list to include his own name. It worked, and Mark was among the first of us to win.
• Put Yourself Out There: To truly get noticed, you sometimes have to leave your comfort zone. I did that by recording and uploading a desperate karaoke version of “Monkey Wrench” for Sugar Shack Donuts. I had fun with it, using high kicks and direct pleadings to the company to pick me. I won! They told me later that I was the only participant who “understood what desperate meant.” I think that was a compliment.
• Target Your Marketing: Too often during the contests, I passively posted items on my Facebook and Twitter accounts asking people to vote on certain entries. It didn’t work. Eventually, with great advice from Faith and Mark, I sent personal messages to friends asking them to ‘like’ my posts. I also used the messages as a chance to reconnect with people, which was a nice bonus. I think this approach only works when you are sincere in your approach and avoid the temptation to just hit people up for a favor.
• Expect Surprises: This lesson was great. The entire time we were jockeying for attention from Brown’s VW, we thought we were trying to catch the eye of General Manager Bill Colgate. I met Bill and his wife at the concert, where I found out that she was the one who kept watching the Foo Five antics and encouraged her husband to pick certain winners. It goes to show with social media that you really don’t know who is on the other side, creating a heightened need to be creative in a way that has broad-based appeal.

Foo Fighters guitarist Pat Smear

Those were some of the major takeaways that I wrote down in the few weeks since the show. I’m sure there were other lessons that the rest of the Foo Five could provide. We all had fun vying for those tickets. 

For me, the crowdsourced concert was part of a much larger narrative. This experience began as an obsessed attempt to score tickets to a once-in-a-lifetime show. It ended up becoming an opportunity to forge friendships, and learn lessons, that will hopefully last a lifetime!

And here's a bonus... a short clip from the concert: