Whether you’re an incoming MBA student or a seasoned CEO, you’ve probably heard your fair share of career advice. While well intended, much of the guidance on how to get ahead is conflicting, with some touting the benefits of specialization and others observing the importance of well-roundedness. According to new research, however, for individuals with elite credentials, like top-tier MBA students, diversity may pay the greatest dividends.
Realizing that students, specifically, “were receiving a mixed message” on the best approach to landing the job of their dreams, Professor Damon Phillips and his colleague, Jennifer Merluzzi of Tulane University’s A.B. Freeman School of Business, set out to determine whether one piece of advice was better than the other.
Taking into account the course work, extracurricular activities, summer internships, and pre-MBA experience of two classes of top-tier business school students, Phillips and Merluzzi analyzed the graduates’ resulting job offers and compensation. Ultimately, they found that once an elite candidate reached the benchmark of training and expertise needed for a position, those with more diverse backgrounds received more job offers and greater compensation than those who were highly specialized.
“A candidate’s value to a firm may be less if they are specialized in a way that has them looking like a lot of other people who already work there,” Phillips explains. “Being a specialist is great if you’re one of only a few — that’s incredibly valuable to a company. But if your profile represents 60 or 70 percent of a company, that’s less valuable.”
For example, if you’re interested in going into investment banking, and you concentrated in coursework exclusively related to it, participated only in banking clubs, and interned at an investment bank over the summer, you might be overdoing it, Phillips says. “One of the lessons of the research is, you want enough variety in your profile to distinguish yourself from others.”
Phillips points out that this research is based on candidates coming from an elite graduate school, where initial screening for skill, talent, and quality is automatically built in. As a result, these candidates usually don’t need to prove to recruiters that they are competent, which is key considering “employers want people who are ready to work the first day, who don’t need three, six, nine, twelve months of training.” Rather, such qualified candidates must focus more on standing out from their equally talented peers.
“As soon as you get to that threshold, it’s time to be unique. It’s time to show how you can add value in a way that others can’t,” Phillips says.
But how do you know if you’ve reached that threshold? One way to find out is to pick a few companies you’re interested in and research their employee profiles, Phillips says. Get a good sense of their backgrounds and experience, and see whether you meet the standard. If so, you might want to consider taking courses, joining clubs, or getting work experience in additional areas.
“It’s about differentiating yourself,” Phillips says.
While this research focused specifically on students, Phillips adds that the findings can be extrapolated to high-level executives, as well. In fact, a 2012 study found that CEOs with generalist profiles earned 19 percent more than CEOs with specialist work histories. “Broad work experience tends to produce better leaders, or at least leaders who are more highly compensated,” he says.
The study’s results may be partly explained by the present pace of business and lingering economic uncertainty. After all, “the more you can’t predict the future, the more you’re going to value people who have a diverse set of skills and experiences,” Phillips observes. “It might help the organization navigate shifts in the market — not just in terms of direct sources of revenue, but in terms of what the labor market looks like, or the culture of the firm. Companies are going to need a variety of backgrounds in order to be prepared for who knows what direction things may go in.”
Ultimately, there are “a ton of things that affect” a candidate’s job prospects, he says, and “students should work together with their institutions to figure out what will work best for them.”
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ABOUT THE RESEARCHER
Damon Phillips
Damon J. Phillips is an adjunct senior research scholar and the former Lambert Family Professor of Social Enterprise. He received his PhD from Stanford...