Commencement time has rolled around again at Rutgers Graduate School of Management, where I teach.

Every year at this time I look at hundreds of men and women in their caps and gowns.

They all appear distinguished and scholarly. But I know, having had these young people in class, that they have quite different histories, goals, expectations, and prospects.

Disappointment Ahead

For some, the most valuable part of a two-year MBA program will be that they are two years older.

These are the people who didn't have any idea what they wanted to do and who hoped that the magic carpet of an MBA would solve their problems.

It won't, as any human resources officer responsible for hiring will tell you. In today's world, it takes a lot more than a sheepskin to win employment and an opportunity to climb the ladder in an American bank -- or any other business.

Other new MBAs are people with technical training -- engineers, chemists, and the like -- who hoped that going for a business degree at night would help them move from the lab bench to an executive position.

Again, those who see their sheepskin as a ticket to the executive offices will be disappointed. They will wonder why they spent years going to school every night after work instead of coming home to a beer and a TV program.

Straight Talk

To get full value from an MBA program, students must do more than sit in classes learning about capital asset pricing models and exponential smoothing. They must glean ideas and learn what makes our system work.

That's why I find that, as the years pass, I spend more time philosophizing with the students instead of giving them as many facts as I can about money and banking and international finance.

I tell them that I have seldom if ever met a top executive in a bank who was not well versed in history, politics, and a number of other areas in addition to being competent as a banker.

I talk about the political process of getting ahead in business -- of attaching yourself to a so-called rabbi," someone who will watch over your career.

I talk about that saying, "There is no limit to what you can accomplish if you do not care who gets the credit."

Looking Behind the Figures

I explain that numbers are not solid enough to be the sole basis for important decisions -- you have to look behind the numbers, to see how they got that way.

In this regard I explain that in most countries the statistics on the balance of payments are political.

If you want foreign aid, you make your country look worse.

On the other hand, if your international position is embarrassingly positive, as was that of the United States in the early 1960s, you change the method of measurement to make it look worse, to avoid the enmity of other nations.

Flight Insurance

When I discuss statistics I tell the story of the executive who fears that when he takes a plane, someone will bring a bomb aboard.

"What are the odds?" he asks a statistician:

"One in 83,789."

"That bad? And what are the odds of two people bringing a bomb on the same plane at the same time?"

Statistically impossible, the. statistician says.

So the executive decides that whenever he flies, he will take a bomb with him.

Misleading Curriculum

Maybe my emphasis on philosophizing is a reaction to the course offerings at my school, and at many others.

Almost all the courses are so filled with numbers and analyzing data that students come out thinking that's all there is to the business world.

I tell them that the number crunchers stay in the basement and report to those who have broader training, strategic vision, and an ability to ask the right questions.

But the students don't believe me. They think that because I do not provide formulas for their notebooks, I am wasting their time.

Only years later, when I bump into old students, do some say:

"I thought you were full of beans. But now that I am out in the business world, I realize that you were describing what really happens."

An Unfortunate Decision

My emphasis on debunking extreme analysis may stem from bitterness.

Our PhD policy committee decided last year that the course in which I try to explain the real world to doctoral candidates is irrelevant -- that they should have more econometrics instead.

This course was my pride and joy. I brought in top bankers, including a number of CEOs. I had the 20 or so Phd students spend three hours with the head of the state pension fund, with New Jersey's former state treasurer, with top bank regulators, and with Wall Street tigers.

Over 10 years I found that the students were thrilled to meet these people, who would give them practical material -- material they could use in their own teaching someday to flesh out the formulas.

But the PhD policy makers felt this real-world knowledge was irrelevant to training teachers.

Farewell to Manila Folders

True, business schools once put too little emphasis on quantitative training.

When I was fresh out of graduate school, I was given a course called Credits and Collections to teach.

Honest to goodness, in this course the students were advised in the first chapter of their text: "Put your credit files in a manila folder. If the file is too active, you may need two folders, one inside the other."

We have come a long way from the manila-folder era to today's exclusive emphasis on trying to quantify all business decisions.

I just wish the new quantifiers would recognize that there is room for both the analytical and the institutional. We institutionalists recognize that the students must have both.

As matters now stand, many students come out of MBA programs with a skewed view of the importance of math, a view that makes them too literal.' They would be more valuable to their employers if they also had some broader sense of what really happens.

Brighter and Brighter

Well, as I said, we are graduating another group. And in today's tough employment climate, the lucky ones will find jobs.

Maybe most will work out well in the business world after they recognize how the system works, discarding the worst of their graduate training while keeping the best.

For, heaven knows, they are brighter and brighter every year. And the women are usually more motivated than the men -- which is why the proverbial "glass ceiling" is being shattered everywhere.

Onward and Upward

Commencement means a beginning. And our students all over the nation are beginning their lifetime careers.

The best -- the ones who will succeed -- are so bright and so motivated that nothing we professors do can thwart their advancement, no matter how hard we sometimes try.

And, yes, sometimes we may even help.

Mr. Nadler is a contributing editor of American Banker and professor of finance at the Rutgers University Graduate School of Managements.

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