Industries and Careers for MBAs 9781582077611, 9781582077604

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Turn to this WetFeet Insider Guide to LEARN ★

The latest on 19 industries—including biotech, consulting, investment banking, real estate, and venture capital—that recruit recent MBAs.

★ About key jobs in each industry, current salary ranges, and job prospects. ★ About common career tracks and the job outlook for each profiled career

★

About career functions—including asset management, business development, corporate finance, marketing, and supply chain management—that span industries and draw on newly minted MBAs.

Industries AND Careers for MBAs ★

of the process by doing in-depth research and analysis of the top industries and careers, making your job search both pleasant and productive. This Insider Guide profiles a host of industries that hire new MBAs, giving you the inside scoop on top companies, cultures, and career paths. So whether you know exactly what you want to do with that precious new degree or you’re still sorting through your options, this guide is the place to start your search!

★

>>Ready to find out where you can maximize the return on your B-school investment? WetFeet’s career experts take the pain out

Industries And Careers for MBAs ★

2 0 0 8 ED I T I O N

Insider guide ★ ON THE JOB: CULTURE AND COMPENSATION ★ INDUSTRY TRENDS AND RANKINGS ★ INFO ON LEADING COMPANIES ★ JOB SEARCH AND INTERVIEWING TIPS

★ What you need to land a job in the field that interests you most.

WetFeet has earned a strong reputation among college graduates and career professionals for its series of highly credible, no-holds-barred Insider Guides. WetFeet’s investigative writers get behind the annual reports and corporate PR to tell the real story of what it’s like to work at specific companies and in different industries. www.WetFeet.com

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Scoop: Front-Line Reports ★

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Guide Industries and Careers for MBAs

2008 EDITION

Industries and Careers for MBAs

WetFeet, Inc. The Folger Building 101 Howard Street Suite 300 San Francisco, CA 94105 Phone: (415) 284-7900 or 1-800-926-4JOB Fax: (415) 284-7910 Website: www.wetfeet.com

Industries and Careers for MBAs 2008 Edition ISBN: 978-1-58207-761-1

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Copyright 2008 WetFeet, Inc. All rights reserved. This publication is protected by the copyright laws of the United States of America. No copying in any form is permitted. It may not be reproduced, distributed, stored in a retrieval system, or transmitted in any form or by any means, in part or in whole, without the express written permission of WetFeet, Inc. The publisher, author, and any other party involved in creation, production, delivery, or sale of this WetFeet Insider Guide make no warranty, express or implied, about the accuracy or reliability of the information found herein. To the degree you use this guide or other materials referenced herein, you do so at your own risk. The materials contained herein are general in nature and may not apply to particular factual or legal circumstances. Under no circumstances shall the publisher, author, or any other party involved in creation, production or delivery of this guide be liable to you or any other person for damages of any kind arising from access to, or use of, its content. All illustrations by mckibillo

Industries and Careers for MBAs

CHAPTER

1

1 Introduction

Industries and Careers for MBAs

conte 2008 EDITION

2

5 Industries

46 Health Care

6 Biotechnology and pharmaceuticals

50 Insurance

11 Commercial Banking

54 Internet and New Media

15 Computer Hardware

59 Investment Banking

19 Computer Software

63 Mutual Funds and Brokerage

23 Consulting

3 91 Careers

92 Asset Management 95 Brand Management 98 Business Development 100 Corporate Finance

28 Consumer Electronics

68 Nonprofits and Government Agencies

32 Consumer Products

73 Real Estate

36 Energy and Utilities

77 Telecommunications

40 Entertainment and Sports

81 Trans-portation

104 Marketing 107 Operations 110 Project Management 112 Securities Sales and Trading

nts 86 Venture Capital

115 Supply Chain Management 117 Top-Tier Management

Introduction

1

Industries and Careers for MBAs

introduction

Careers

Industries

Introduction

The purpose of this Insider Guide is to provide

you with information about a broad range of careers and industries, so that you can consider the myriad career options available to MBAs. The guide is divided into two sections. The first covers various industries, from biotechnology to venture capital. These industry profiles will give you an idea of what’s going on in different sectors, opportunities that may be available within them, and companies that are most likely to offer those opportunities. Most of the industry profiles contain descriptions of relevant jobs for which MBAs might be a good fit. Be aware that in addition to the jobs described, just about every industry will offer opportunities in the standard corporate functions— marketing, operations, finance, and so on. The second section consists of profiles of a variety of career functions, from brand management to supply chain management, that you’ll find across a range of industries.

How We Arrived Here Bear with us for a moment as we explain what may at first appear to be arbitrary distinctions. In this book, career has a very specific definition: It refers to any functional occupation, such as accounting, human resources, or marketing, that spans unrelated industries. The careers profiled in the “Careers” chapter are those that are more or less consistent across industries and thus tend to allow greater cross-industry job mobility for people employed in these ubiquitous fields. For example, an HR manager with insurance industry experience need not limit his job search to opportunities with other insurance companies. He is just as likely to land an equivalent or better HR position in an altogether different industry, because his skill set and professional experience are assumed to be on a par with those of



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HR managers in other industries. Industry-specific knowledge and experience are not as important in these professions as they are in others. Naturally there are exceptions, but our insiders concur that this is generally the case. What does all this mean to you? As you review the information in this book and use it to target your own job search, you’ll need to answer the question, “Is the kind of work I hope to find specific to a few industries, or does it span many disparate industries?”

How to Use This Book To get the most out of this book, find the job-seeker description in the sections below that best matches your own feelings and follow the recommendations in that section.

Not a Clue What You Want to Do? If you aren’t sure what you want to do, don’t panic— take a little time to enjoy the freedom of so many options. We recommend you read all the profiles in this book and think seriously about which sound like a good match for your interests, strengths, education, and experience. As you think about which industries and careers might interest you, remember that it’s important to keep your focus neither too narrow nor too broad. In other words, don’t feel that you must narrow your selection to a single career or industry, but do force yourself to eliminate some options. And don’t allow yourself to be paralyzed by indecision: To ensure that your current vocational

> TIP As you start to consider your industry and career options, don’t think too narrowly or too broadly— consider all possibilities except those in areas that really turn you off.

Know Where You Want to Go, But Not Sure How to Get There?

Industries

If you have a general idea of the kind of work you’d like to pursue and you have the appropriate educational background, some relevant experience, or both, your task is a little easier. You probably fit one of these two descriptions: You have a specific industry (or two) in mind but are unsure of the role you’d like to play within that industry. If this sounds like you, we recommend you review the industry profiles that match your interest first, and then read the “Careers” chapter. While reading the industry and career profiles, think about which roles are consistent with your strengths, education, and experience. You may need to do some additional research to learn about the positions that interest you. You can read WetFeet’s Real People Profiles online (at www.wetfeet.com) to learn how real people working in these fields describe what they do. Your goal is to identify several potential positions you want to target in your job search. Then you can use the relevant list of major industry players to start thinking about the companies you want to consider. You’re drawn to a specific career but you’re not sure which industries to target. If this describes you, we recommend you flip to the “Careers” chapter first to see whether your desired career is profiled there.

If it is, read that profile and then turn back to the “Industries” chapter. Read through the industry profiles and focus on those that interest you. Next, do some research online: Start with WetFeet.com’s online career and industry profiles, which provide even more information about dozens of careers and industries. Look at WetFeet’s Real People Profiles to find out how people actually working in these fields describe what they do. And don’t forget to check out the additional resources included at the end of each profile in this book. Don’t despair if your career of choice isn’t profiled here. That just means that you may be limited to a smaller set of potential industries. You’ll need to read the industry profiles to find out which industries are appropriate targets for your job search. Keep in mind that these profiles aren’t exhaustive: If your career isn’t mentioned in an industry profile that otherwise interests you, use your own judgment and understanding of the career to consider whether it’s likely to be a role prevalent in that industry. If you’re still not sure, check the employment areas of the largest industry players’ websites to see whether they fill positions that are comparable to your hoped-for career. You can do additional research on WetFeet.com to learn even more about the industries that interest you. Good luck!

Introduction

confusion doesn’t derail your job search before it starts, you should select at least two or three potential paths initially. Don’t worry! Your decisions aren’t final, and you’re welcome—in fact, encouraged—to reconsider your path should you find it isn’t what you’d hoped for.

Careers

WETFEET INSIDER GUIDE



Industries

2

Biotechnology and Pharmaceuticals ........................ 6 .

Commercial Banking............... 11 . Computer Hardware................ 15 .

Computer Software. ................ 19 . Consulting . ........................... 23 . Consumer Electronics. ............. 28 .

Consumer Products................. 32 . Energy and Utilities................. 36 .

Entertainment and Sports......... 40 . Health Care........................... 46 .

Insurance . ............................. 50 . Internet and New Media........... 54 .

Investment Banking................. 59 . Mutual Funds and Brokerage..... 63 .

Nonprofits and Government Agencies. ............. 68 . Real . Estate............................. 73

Telecommunications ................ 77 . Transportation ........................ 81 .

Venture Capital....................... 86

Industries and Careers for MBAs

Careers

Industries

Introduction

Biotechnology and pharmaceuticals Industry Overview Pharmaceutical companies produce and market drugs, from familiar over-the-counter compounds like aspirin to exotic prescriptions that inhibit, activate, or otherwise affect individual molecules involved in specific medical conditions. They also produce livestock feed supplements, vitamins, and a host of other products. The pharmaceutical drug discovery and development industry has grown to become one of the most profitable in the world. During the past 30 years, billions of dollars have been spent on research in biochemistry, molecular biology, cell biology, immunology, genetics, and information technology— and billions of dollars in profits have been earned by drug companies. Biotechnology is a relatively new kid on the block. Simply put, biotechnology, the applied knowledge of biology, seeks to duplicate or change the function of a living cell so that it will work in a more predictable and controllable way. The biotech industry uses advances in genetics research to develop products for human diseases and conditions. Several biotech companies also use genetic technology to other ends, such as the manipulation of crops. Biotech opportunities largely mirror those in the pharmaceutical industry. The key difference is that biotech companies are much more focused on research because they’re still developing their initial products. Biotech companies tend to expand their marketing and sales forces when—and if—a viable product nears approval by the Food and Drug Administration (FDA). And it’s become common for small companies to seek alliances with larger companies that already have the requisite infrastructure in place for these functions. That means jobs for nonscientists are scarcer in biotech than in pharmaceuticals.



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Biotech and pharma have been performing exceedingly well relative to other industries in recent years. And while there are shadows over some companies in the industry—most notably Merck, facing thousands of lawsuits related to its antiarthritis drug Vioxx—overall the future looks bright. Though there is plenty of public controversy (the moral and ethical questions surrounding genomics, for example, and the pricing and patent practices of Big Pharma), demand for drugs is growing, fueled by an aging population and blossoming international markets. But regardless of whether you choose to work for Big Pharma or small biotech, don’t get too attached to the status quo. These days, the business environment can change overnight. One need only look at recent biotech stock volatility for ample evidence of that.

Trends Pricing Insiders say this may be the biggest issue the industry currently faces. Who will pay the cost of drug development? As more treatments become available, will only the wealthy have access to them?

INSIDER SCOOP “Even in Big Pharma, if there’s a merger or a spinoff, you can easily find yourself without a job.” Prescription drug prices are rising annually, while insurers are becoming increasingly more stringent about which medications they’ll reimburse their customers for. Exciting new drugs can cost thousands or even tens of thousands of dollars per treatment. Providing price relief for seniors has been an issue for several years. Many favor price controls to prevent costs from skyrocketing, a move the pharmaceutical industry opposes.

O Canada…and Mexico

The success of biotech and pharmaceutical companies depends on their ability to sell the most popular drugs, called “blockbusters”. A drug that generates at least $1 billion in revenue is generally considered a blockbuster. Such a drug can turn a fledgling biotech company that’s racked up losses for years into a huge success, producing significant windfalls for investors. That’s why venture capitalists and other early-stage investors have sunk billions into the biotech industry. It’s also why pharmaceutical companies invest billions in their drug pipelines. It may take 15 years to win approval for a drug and to take it to market, which is why drug companies work on many products simultaneously.

The pharmaceutical job market is healthy: Big Pharma may be under attack for its pricing and patent practices, but it’s one of the most profitable industries in the U.S. It’s also why they look to acquire smaller biotech companies with promising drugs. In some cases, the large pharma companies may have even invested in smaller biotech outfits or have formed partnerships with them to produce new drugs. Collaboration between companies is among the most significant research and development (R&D) trends in the biotechnology and pharmaceutical industry. WETFEET INSIDER GUIDE

Careers

The biotech and pharmaceutical industries seem to be facing wave after wave of bad press. Environmental proponents have gathered evidence to support their claims that biotechnologically produced foods are unsafe, and their protests have grown louder. Meanwhile, drug companies have come under fire for some of their clinical trial practices. Many drug companies test their drugs in poor countries overseas, where it’s easier and cheaper to recruit test participants. The big question critics have is, what happens when the tests are over? In many cases, test participants have received medications that vastly improved their quality of life. Should drug makers be permitted to cut off the supply of the drugs they’re testing once those tests are complete? Is that ethical? Should they be obliged to provide the drugs in the poor countries where they’ve run their tests once the drugs have gone to market? The companies themselves are grappling with these

Blockbuster Drugs Hold the Key

Industries

Still More Ethical and Legal Concerns

and similar questions. Some have tried marketing drugs in poor countries where they’ve been tested, but when so few in those countries are able to afford the drugs, it’s a money-losing proposition—and don’t bet on drug makers doing anything that will even remotely threaten their bottom line.

Introduction

More and more people are taking more and more drugs—and they’re none too happy about the outrageous price tags on their prescription bottles. Many consumers have been responding to high prices (it’s not uncommon for the newer drugs on the market to carry a price tag of $175 per month or more) by buying drugs at lower cost from other countries. Canada has been in the spotlight these days, as it’s shipping more and more pharmaceuticals to consumers in the U.S. Mexico is also a source of cheaper medications. But importing prescription drugs into the U.S. is illegal—and, according to the FDA, unsafe. The pharma companies hate this trend, of course, because their profits will suffer if people can buy their drugs elsewhere at a cheaper price. To fight it, Pfizer, for one, is shutting off supplies to Canadian drug retailers who are exporting prescription drugs to the U.S., and other big drug makers are threatening to follow suit. Meanwhile, a number of states are gearing up to go after Big Pharma on behalf of their citizens, who say they should be able to buy drugs at the lower prices they can get by importing them.



Industries and Careers for MBAs How It Breaks Down Insiders refer to the handful of multinational giants that dominate the industry as “Big Pharma.” The majority of Big Pharma companies are headquartered in the U.S., but several are based in Western Europe— France, Germany, and Switzerland. Those in the U.S. are all located east of the Mississippi, with the greatest concentration in New Jersey. Big Pharma companies come in two styles: diversified and nondiversified. Diversified companies (which include Johnson & Johnson, Abbott Laboratories, and Wyeth) maintain other health care–related businesses such as consumer health product divisions and medical device companies, while those that are nondiversified (including Eli Lilly and Merck) focus solely on the development and sale of drugs. Since the turn of the century, some diversified companies have chosen to divest their nonpharma concerns in favor of the leaner and more profitable drug business. Bristol-Myers Squibb, for instance, sold Clairol, the number-one hair products company in the U.S., to Procter & Gamble in 2001.

& Young’s 21st annual report on the biotech sector, revenue for publicly traded companies in this sector increased to more than $70 billion worldwide in 2006, up more than $7 billion over the previous year’s total. Net income losses for publicly traded companies fell 37 percent in Europe and 44 percent in Canada. Net losses at publicly traded U.S. biotech companies likely would have fallen if not for one-time transactional charges in a record year of deal-making involving in the industry. Deal values soared, with alliances involving U.S. biotech companies increasing to a record $23 billion. Biotech companies tend to be located in geographical clusters, often near prominent research universities. The largest concentration of biotech companies is in California (mainly in and around the San Francisco Bay Area and San Diego), followed closely by Massachusetts. You’ll also find pockets in such far-flung regions as Washington, D.C.; RaleighDurham, North Carolina; and Boulder, Colorado. And biotech is increasingly international, with more companies opening in Europe and Asia.

Biotech

Key Jobs for MBAs

Careers

Industries

Introduction

Big Pharma

Despite the success of such biotech giants as Amgen and Genentech, a majority of biotech shops are still small enough for everyone to know everyone else’s name. But a growing number of companies are joining the elite group of biotech companies that have FDA-approved drugs on the market. Once a biotech company has reached the stage at which it has a product coming to market, its jobs expand from the primarily science-focused to include marketing, manufacturing, engineering, and sales. Culturally, biotech companies tend to have growing pains as they move from R&D to commercialization, but their organizations are likely to remain much leaner and flatter than those in Big Pharma. Although there are nearly 1,500 biotech companies in the U.S. (more than 300 of them publicly traded), with some 200,000 total employees, the biotech industry is significantly smaller than the pharma industry. Still, biotech is vibrant. According to Ernst 

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A note about salaries: At large pharmaceutical companies, people in management positions earn significant bonuses in cash and stock options. At many biotech companies, all employees receive stock options, which, if the company does well, can be lucrative. These bonuses are not reflected in the salary ranges below.

Marketing Analyst/Associate Product Manager Job seekers without a background in science can find work on the marketing side in Big Pharma and large biotech companies. Marketing analysts are primarily responsible for coordinating and implementing campaigns for specific drugs, audiences, or both. This involves a little strategy and a lot of execution— functions like developing collateral pieces, working as a liaison to advertising agencies, and overseeing a company’s presence at conventions. Many MBAs

Product Manager This job requires managing a team of people and working to determine price, distribution, brand image, forecasting, and overall strategy for one or more drugs. On a micro level, the job can be frustrating: Imagine spending 13 months of six-day weeks learning every aspect of a single drug, then having the company decide that it would be best simply to let the product die. But over the years you might be exposed to some of the most important, dynamic, and profitable drug markets—experience that will give you a big-picture understanding of the industry and make you a greater asset to the company. Salary range: $60,000 to $100,000

Job Prospects According to the U.S. Bureau of Labor Statistics, employment in the biotech and pharmaceutical industries will increase at a faster rate than the average through 2014. The pharmaceutical job market is healthy. Big Pharma may be under attack for its pricing and patent practices, but it’s one of the most profitable industries in the U.S. Biotech, on the other hand, relies on the public- and private-funding markets to survive the long years until a product is approved for sale. Insiders advise that you ascertain whether your prospective biotech employer has at least two years of funding— preferably more—in the bank. In demand are people with scientific backgrounds, particularly those with that rare combination of science and computer skills required for bioinformatics, as well as those who combine scientific training with managerial ability. Folks with BS or MS degrees in chemistry, molecular biology, genetics, biochemistry, computer science, and physics can

Industries

Key Pharmaceutical Companies Company

1-Yr. Change (%)

Employees

Johnson & Johnson (1)

53,324

5.6

122,000

Pfizer

48,371

–5.7

98,000

GlaxoSmithKline (2)

45,479

7.2

101,802

Sanofi-Aventis (2)

38,934

15.3

100,289

Novartis

36,749

13.0

100,735

Roche (1,2)

34,465

27.7

74,372

AstraZeneca (2)

26,475

10.6

66,000

Merck

22,636

2.8

60,000

Abbott Laboratories

22,476

0.6

66,663

Bristol-Myers Squibb

17,914

–6.7

43,000

(2)

(1) Highly diversified company; figures include departments that operate in other industries (2) Foreign company; figures reflect worldwide sales and employment Sources: Hoover’s; WetFeet analysis

WETFEET INSIDER GUIDE



Careers

2006 Revenue ($M)

Introduction

enter the industry this way, and—perhaps more importantly—few without MBAs move far beyond the marketing analyst level, although this varies from company to company. Other people come to these positions from sales. Salary range: $38,000 to $75,000

Industries and Careers for MBAs Key Biotech Companies

Introduction

Company

2006 Revenue ($M)

1-Yr. Change (%)

Employees

Amgen

14,268

14.8

20,100

Genentech

9,284

40.0

10,533

Genzyme

3,187

16.5

9,000

Gilead Sciences

3,026

49.2

2,515

Biogen Idec

2,683

10.8

3,750

Merck Serono (1,3)

2,586

5.2

4,826

Applera (2)

1,949

107.0

5,090

MedImmune

1,277

2.6

2,538

Invitrogen

1,264

5.4

4,835

find absorbing careers. However, a PhD is generally required if you want to advance beyond the level of research associate. Above all, those who choose to work in this industry enjoy the very real satisfaction of knowing they’re helping to produce drugs that could make a radical difference in the lives of thousands, even millions, of people.

Careers

Industries

(1) Foreign company; figures reflect worldwide sales and employment (2) 2007 figures; (3) 2005 figures Sources: Hoover’s; company annual reports; WetFeet analysis, Annual reports

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Additional Resources BioView (www.bioview.co.il) BioSpace (www.biospace.com) Biotechnology Industry Organization (www.bio.org) Careers in Biotech & Pharmaceuticals (WetFeet Insider Guide, available from www.wetfeet.com) Drug Information Association (www.diahome.org) Medzilla (www.medzilla.com) Pharmaceutical Research and Manufacturers of America (www.phrma.org) Pharmaceutical Online (www.pharmaceuticalonline.com)

Commercial Banking

Trends

For years, most consumers and businesses purchased goods and services through three means: They paid in cash, wrote a check, or, if the purchase was sufficiently

While credit cards have been one of the biggest sources of retail banking revenue growth in recent decades, business hasn’t been without its downsides for card issuers in recent years. Legal actions brought by purchasers and vendors alike have reduced card issuers’ bottom lines. On the consumer side, for instance, American Express has had to settle a class-action suit over allegations that it charged customers improperly for foreign currency transactions (similar charges are pending against Visa and MasterCard and banks that issued those cards). Meanwhile, vendors that accept credit card payments have been battling to lower the fees they pay to the credit card associations. To settle charges brought by merchants, the card associations have paid the merchants billions of dollars and lowered certain fees.

Consolidation For decades, banks profited by simply holding customers’ money and charging them check-writing fees and interest on loans. Jobs were well-defined and stable, and the paths to promotion were clear and secure. Not anymore. Consolidation, competition, and technological change are shaking the industry to its WETFEET INSIDER GUIDE

11

Careers

New Electronic Payment Options

Trouble in Credit Card Land

Industries

In the most basic terms, commercial banks take deposits from individual and institutional customers, which they then use to extend credit to other customers. They make money by earning more in interest from borrowers than they pay in interest to those whose deposits they accept. They’re different from investment banks and brokerages in that those kinds of institutions focus on underwriting, selling, and trading corporate and municipal securities. Most of us maintain checking accounts at commercial banks and use their ATMs. The money we deposit in our neighborhood bank branch or credit union supports economic activity through business loans, mortgages, auto loans, and home repair loans. Banks also provide loans in the form of credit card charges, and render local services including safe deposit, notary, and merchant banking. The bank branch or credit union office remains the cornerstone of economic life on Main Street. Banks have been undergoing rapid change over the past decade or so. Although their traditionally conservative businesses, most large banks now offer banking services over the Web. Branch banks have proliferated as well, as banks like Washington Mutual attempt to become as ubiquitous as 7-Eleven stores. The 1999 repeal of the Glass-Steagall Act, which limited the businesses commercial banks could operate in, created huge new areas of business. Many commercial banks have gone into nontraditional commercial banking businesses such as selling insurance products and securities.

Introduction

Industry Overview

large, they charged it to a credit card. Thanks to technology, purchasers now enjoy a host of new payment options; and banks enjoy a number of new revenue streams because of the fees and interest charges associated with these options. For example, most big banks offer prepaid MasterCard and Visa cards. Debit cards, which when used withdraw money directly from the cardholder’s bank account, are another relatively new product. Online payment technologies allow consumers and businesses to transfer money to vendors via the Internet. And then there are micropayments: In the past, most vendors would accept credit cards only for a minimum transaction amount, but today it’s becoming more and more common for purchasers to use credit cards and other electronic payment options for relatively minor purchases, such as music downloads and fast food.

Industries

Introduction

Industries and Careers for MBAs core, forcing layoffs while creating opportunity. Since 1995, more than 200 large and small banks have merged, with an eye toward building market share and/or increasing economies of scale. Today, a handful of giants—Bank of America, Citibank, JPMorgan Chase—dominate the banking industry. The new behemoths are entering new markets while replacing service personnel with online and other technologies. However, the hiring being done by a growing number of nonbanks compensates for this trend to a degree. These companies—which have pioneered new ways of delivering financial services— include Capital One, a credit card lender, as well as transaction processing and data services companies such as First Data and Fiserv.

Consolidation, competition, and technological change are shaking the commercial banking industry to its core, forcing layoffs while creating opportunity.

Careers

Deregulation The Glass-Steagall Act, passed by Congress in 1933, served as the backbone of banking regulation. During the late ’90s, however, banks and other financial institutions found ways around the restrictions placed on them by Glass-Steagall and related legislation. Finally, in late 1999, the act was repealed, eliminating the legal framework for Depression-era boundaries for financial services companies. This has created new opportunities for small and large banks alike that continue to shake up the banking landscape.

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Risk Record levels of consumer debt and personal bankruptcies, the prospect that the real estate bubble will pop, and rising interest rates and oil prices all threaten to dampen prospects for commercial banks. Many fear that the dueling budget and trade deficits in the U.S. aren’t sustainable. Protecting customer information and transaction data from cyberthreats is another area banks are concerned with, and many are working to upgrade their enterprise protections. Because problems in the market inevitably affect banks, many are putting new emphasis on upgrading risk management capabilities in case something goes awry.

How It Breaks Down The most important distinction for job seekers to keep in mind is the one between regional banks and the big global companies. We’ve broken down the industry by type of banking, rather than size of player, since banks are continuing to add new services to their array of traditional functions every day.

Consumer or Retail Banking This is what most people have in mind when they think of banking: a small to midsize branch with tellers and platform officers—the men and women in suits sitting at the desks—to handle customers’ day-today needs. Although thousands of small community banks, credit unions, and savings institutions still exist, employment opportunities in this sector are increasingly coming from a few megaplayers such as Bank of America, Citibank, and JPMorgan Chase, which have built national—and even international— banking operations. In addition to extending their consumer banking operations, many of the larger banks have added to their investment banking and asset management capabilities. So, make sure you’re applying to the right part of a large, diversified organization.

Business or Corporate Banking

Securities and Investments

Nontraditional Options Increasingly, a number of nonbank entities are offering opportunities to people interested in financial services. Players include credit card companies such as American Express, MasterCard, and Visa; credit card lenders like Capital One; and credit reporting agencies such as Experian. Although people at these companies are still in the money business, the specific jobs vary greatly, perhaps more widely than jobs at traditional banks. In particular, given the volume of transactions that many of these organizations handle, opportunities for people with strong technical skills are excellent.

Key Jobs for MBAs

Sales is another relatively sure prospect for the uncertain future. Banks are competing with brokerages, investment banks, and mutual funds, all of which offer more obvious and alluring opportunities in sales. If you seem to have a talent for this and would like a chance to be a big fish, then a commercial bank might be just the pond for you. Demand is also rising for salespeople who understand product development, and for investment managers (brokers). An undergraduate degree in finance, business, or economics may help you get in the door; an MBA is a better bet. Salary range: $30,000 to $150,000 or more (commissions and new business you bring in can add substantially to these figures)

Trust Officer Give this area a shot if you have a flair for financial counseling, and if you like hobnobbing with highnet-worth individuals. The job involves helping clients with trust services, estate planning, taxes, investing, and probate law. Warning: Sooner or later you’ll find yourself in the middle of family squabbles, jealousies, disinheritances, and lawsuits. This job requires diplomacy, tact, deference, and a better, more current understanding of tax law than most attorneys need. Salary range: $45,000 to $80,000

Job Prospects Two of the major trends in banking over the past decade or more have been consolidation and the increasing use of technology—online banking, automated check processing, and the like. Both of these trends have had and will continue to have a negative effect on job growth in the industry. But it’s not all bad news in banking: The U.S. population is growing, and new population centers are emerging all the time, so new jobs will be available in new locations. And while opportunities for bank tellers WETFEET INSIDER GUIDE

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Careers

The jobs available at different commercial banks vary significantly according to the scope of their operations. Megabanks offer a huge variety of positions, from hard-core programming to investment banking and

Sales

Industries

Traditionally, this field has been the domain of a few Wall Street firms. However, as federal regulations eased, many of the biggest commercial banks— including Bank of America, Citibank, and JPMorgan Chase—aggressively added investment banking and asset management activities to their offerings. For anyone interested in corporate finance, securities underwriting, or asset management, many of these firms offer an attractive option. Be aware, though, that hiring for these positions is frequently done separately from that for corporate and consumer banking.

trading. Small and regional banks tend to offer a narrower range of more traditional positions (teller, loan officer, credit analyst, and so on). Introduction

Many of the players in this group are the same ones in the consumer banking business; others you’ll find on Wall Street, not Main Street. At the highest level, the larger players (Wells Fargo and Wachovia are two names to add to the list of megaplayers above) provide a wide range of advisory and transaction management services to corporate clients. Depending on which institution and activity area you join, the work can resemble branch banking or investment banking.

Industries and Careers for MBAs Key Commercial Banks

Industries

Introduction

Bank

2006 Revenue ($M)

1-Yr. Change (%)

Employees

Citigroup (1)

146,558

21.8

122,000

Bank of America (1)

117,017

39.3

98,000

JPMorgan Chase (1)

99,845

25.0

101,802

GE Capital Services

99,845

9.0

100,289

Wells Fargo

47,998

18.4

100,735

Wachovia

46,810

30.4

74,372

American Express

27,136

11.8

66,000

Washington Mutual

26,454

22.1

66,663

Countrywide Financial

24,876

59.1

60,000

HSBC Finance

22,985

27.4

66,663

U.S. Bancorp

19,109

14.4

43,000

Capital One Financial

15,191

25.7

31,800

SunTrust Banks

13,311

22.2

33,599

National City

12,953

17.4

31,270

The PNC Financial Services Group

11,146

40.4

23,783

BB&T

9,487

21.1

29,300

The Bank of New York Mellon

9,062

9.0

22,961

Fifth Third Bancorp

8,472

13.0

21,362

KeyCorp

7,507

12.1

20,006

HSBC USA* (3)

2,563

–68.1

12,000

Careers

(1) Highly diversified company; figures include departments that operate in other industries (2) 2005 numberfigure. (3) HSBC USA is a unit of London-based HSBC Holdings Sources: Hoover’s; WetFeet analysis

and back-office clerical workers stagnate, financial analysts, financial advisers, trust officers, marketing pros, and techies will enjoy growing opportunities as the baby boom generation ages and bank operations become increasingly automated. In fact, many banks are actively preparing for the 14

W E T F E E T I N SIDER GUIDE

retirement of the baby boom generation by launching talent management programs designed to look at training, performance management, and workforce planning as related parts of a bigger whole. Some banks, including Bank of America, Wachovia, and Wells Fargo, have opened retail branches in new areas

Additional Resources American Bankers Association (www.aba.com) BankJobs.com (www.bankjobs.com) BankRate.com (www.bankrate.com) JobsintheMoney (www.jobsinthemoney.com)

Computer Hardware Industry Overview

If a hardware company falters, it instantly becomes a target for larger companies looking for acquisitions. No doubt about it—computer hardware is a cutthroat business.

Industries

Stanford University. Route 128 is near the educational mecca of Cambridge, Massachusetts. Research Triangle in North Carolina and the area around Austin, Texas, are two more good examples. Most major computer hardware corporations reach across national borders. International sales normally account for a large percentage of most hardware companies’ bottom lines, and China, India, Japan, and other Asian countries are hotbeds of hardware manufacture and design. Careers

Computer hardware, as we use the term, means computers with their central processing units (CPUs), memory, and storage—in other words, the machines that run an operating system and application software—and their attached peripherals (keyboards, mice, printers, and so on). Also included in our definition are the servers, electronic security, and storage devices used in the data centers of many corporations. Computer hardware and software are useless without each other. But working together they store, modify, and exchange data: words, pictures, and numbers—everything from correspondence to news photos, from drawings of jet aircraft to shipping manifests, from news releases to financial reports, from census statistics to stock quotes, from maps to email. The competition among computer hardware companies is particularly intense. On the one hand, in the traditional PC market products have largely become commodified; the result is constant downward price pressure (and narrowing profit margins). On

the other hand, there are markets for innovative new products, such as tablet PCs and ultra-minimal desktops, that are not yet fully commodified. Here, the race is on to develop products at breakneck speed in order to be first to market. And if a company falters, it instantly becomes a target for larger companies looking for acquisitions. No doubt about it—computer hardware is a cutthroat business. Despite its worldwide reach, the hardware industry has definite geographic concentrations. It’s often noted that high-tech companies tend to be located near colleges and universities, and there’s a good deal of truth to that, as many companies come out of research done at such institutions. Silicon Valley is near San Jose State, the University of California at Berkeley, and

Introduction

and added to their private banking operations. The emphasis on retail banking and the repeal of GlassSteagall have created opportunities for companies to become providers of suites of financial products. This means more possibilities for financial services sales reps and fewer for loan officers and others with only a limited knowledge of the full array of financial products banks can now sell.

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Industries and Careers for MBAs Trends

Careers

Industries

Introduction

Smaller and Smaller As advancing technology makes it cost-effective to produce more complex chips in increasingly compact sizes, computer hardware makers can bring smaller and smaller devices to market. Think flat computer display screens. Think ever-thinner, ever-lighter laptop computers. And so on.

New Gaming Platforms Gaming hardware companies are constantly looking to improve their gaming consoles. The latest consoles feature high-def graphics, speedy performance, and enhanced audio. Microsoft’s Xbox 360, which came out in late 2005, was once the most advanced console on the market at the time of its launch. However, Sony’s PlayStation 3 console, which was released in 2006, wais technically more advanced—not to mention more costly. Nintendo’s Wii console, which was also released in 2006, was less powerful than the Sony and Microsoft console offerings, but it’s garnered its share of marketplace buzz due to its motionsensitive controller.

Outsourcing In the hardware world as elsewhere in business, an increasing number of manufacturers are outsourcing product and component development and manufacturing overseas. Some companies are doing only top-level design in the U.S., leaving production and more basic design tasks to cheaper labor in China, the Philippines, and elsewhere. This means that product managers and project heads may have to travel a lot more than in previous generations; it also means that many North America–based jobs are being lost. Increasingly, the task of U.S. computer companies is to be expert in marketing and distribution while simply outsourcing manufacturing and portions of the design work. Still, observers say this sector should continue to offer plenty of U.S. jobs for techies with top-notch skills.

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Linux This cheap, open-source operating system software (Linux code is available for free on the Web) has moved into the mainstream. Pushed by the desire to lower costs, companies of many stripes have taken a new interest in Linux instead of more expensive operating systems such as Windows or Unix. At the same time, Intel has begun to optimize its chips for Linux in addition to Windows, which means the PC and server products containing those chips—from hardware manufacturers such as Dell, HewlettPackard, and IBM—can handle Linux.

How It Breaks Down For job seekers, one way to segment the industry is by the type of computer hardware a company makes. Other differentiating factors include industry and application focus, and sales-and-distribution methodology—mail order, Internet, or retail.

PCs (Desktops and Laptops) The PC market is perhaps the most visible segment of the high-tech hardware market, with computers becoming ubiquitous at work, home, labs, and school. Many of the desktop and portable computers made by the established players—such as Apple, Dell, and Hewlett-Packard—are powerful enough to replace high-end specialized workstations and to use for 3-D rendering, molecular modeling, computeraided design (CAD), and video editing. Portable computers represent a growing share of the personal computer market.

Peripherals A peripheral is usually understood to mean an external product added to a computer, such as a new mouse, speakers, or a flash drive (think manufacturers like Kensington, KeyTronic, and Logitech), all the way up to monitors, scanners, and printers. However, a peripheral can also be something added into a computer, such as a higher-performing video or sound card.

Key Computer Hardware Manufacturers Company

Employees

Hewlett-Packard (1)

91,658

5.7

156,000

IBM (1)

91,424

0.3

355,766

Hitachi (1,3)

87,107

8.3

306,876

Sony (1,3)

70,513

11.0

158,500 (4)

Dell

55,908

13.6

66,100

Toshiba (1,3)

53,945

–0.6

172,000

Fujitsu (1,3)

40,746

–8.0

158,491

NEC (5)

39,266

–5.1

154,786

Canon (3)

34,917

9.4

118,499

Cisco Systems

28,484

14.9

49,926

Apple (1)

19,315

38.6

17,787

Xerox

15,895

1.2

53,700

Seiko Epson (3)

13,178

–4.2

90,701

Sun Microsystems

13,068

18.0

38,000

Acer (1,3)

11,323

10.0

6,560

EMC

11,155

15.4

31,100

Seagate Technology

9,206

21.9

17,000

NCR

6,142

1.9

28,900

Lexmark International

5,108

–2.2

14,900

Gateway

3,981

3.3

1,700

Industries

1-Yr. Change (%)

Introduction

2006 Revenue ($M)

(1) Highly diversified company; figures include departments that operate in other industries (2) 2007 fiscal year (3) Foreign company; figures reflect worldwide sales and employment (4) 2006 figure (5) 2005 figures Sources: Hoover’s; WetFeet analysis

There are many types of servers—those boxes that, among other things, are the glue that holds the Internet together. In addition to Web servers, which

relay all the HTML and image files that end up on your screen, there are local area network (LAN) servers, wide area network (WAN) servers, file servers, mail servers, database servers, and more. Whenever WETFEET INSIDER GUIDE

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Careers

Servers

Industries and Careers for MBAs two computers (termed “clients” in this context) connect over a network, a server is involved.

Introduction

Key Jobs for MBAs Although people with technical backgrounds will have an easier time in their job search, those without technical degrees can also find work. The following are a few positions representative of opportunities for MBAs in this industry.

Product Manager As a product manager, you’re a key player in coming up with product ideas and working with engineers to make them a reality. This position requires some grasp of technical matters, the ability to build consensus and teamwork, and a knack for spotting—and anticipating—market trends. Most of these jobs require an MBA or comparable experience. Salary range: $80,000 to $130,000

Financial analysis in computer hardware companies can take several different forms: numerical analysis for production planning, industrial operations management, or general finance and accounting. In some cases, analysts evaluate other companies as potential merger or acquisition targets. Depending on how the analyst position is defined, an MBA may be necessary. Salary range: $35,000 to $90,000

Careers

Industries

Financial Analyst

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Job Prospects The job market has eased somewhat in the past few years because of new job creation and movement within the industry. As always, keep your eyes open for companies that need help. Job seekers with technical expertise and a computer science degree will find the most opportunities and the sweetest compensation packages, whether they work as engineers, as product managers, or in marketing. Jobs in areas such as sales, customer support, and technical writing go to individuals with good people skills, a strong customer-service bias, and the ability to communicate complex ideas in plain English, respectively. If any of that sounds like you, give computer hardware a close look—but be prepared to get up to speed on the technical side. High-tech companies are generally active and up-front with their job openings. Their own websites are valuable resources regarding vacancies, and they usually maintain a high-profile recruiting presence at colleges and universities. Don’t overlook internships— not only do they provide training, but companies often hire from within their intern pool. Even if you’re not interested in working for the megacorp that’s offering a summer program, what you learn there will add to your value in the eyes of smaller companies.

Additional Resources Association for Computing Machinery (www.acm.org) Computer & Communications Industry Association (www.ccianet.org) Computerworld (www.computerworld.com) Dice (www.dice.com) InformationWeek (www.informationweek.com) Information Technology Association of America (www.itaa.org) Slashdot (http://slashdot.org)

Computer Software

Trends

Shipping Jobs Overseas Dampening the job outlook a bit is the trend among software developers to outsource work to cheaper labor overseas; for instance, India has a large population of educated, tech-savvy folks willing to work for a fraction of what passes for an acceptable salary in the U.S. Other outsourcing hotspots exist in Russia and the Asia-Pacific region. In general, most exported tech jobs have been at the lower, more grunt work–focused levels, though there’s an increasing trend toward sending more skilled tech jobs overseas. Still, at least for the time being, if you’re good at what you do, the explosion in software development means you should continue to have plenty of job opportunities in the U.S..

If you’re good at what you do, the explosion in software development means you’ll have plenty of job opportunities in the U.S.

Industries

Software as Service Traditionally, software has been sold in a box or downloaded, and then installed on a particular computer. Today more and more software is being sold as a service; in other words, the software is hosted on the software company’s server and accessed via the Internet by the user, who pays a periodic subscription fee for that access. Software companies of all kinds, even those that make word processing WETFEET INSIDER GUIDE

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Careers

Although only a few decades old, by now the computer software industry has a much-storied past. We’ve all heard the tales of iconoclastic young entrepreneurs who started companies in their garages and went on to become some of the richest and most powerful businesspeople in the world. Indeed, names like Bill Gates and Steve Jobs are better known in many circles than the names of the latest pop music stars. Today, programming’s adventurous and maverick past is still alive; all over Silicon Valley, as well as in other tech hot spots like Boston and Austin, visionary software developers are trying to come up with the next “killer app.” Computer software products accomplish discrete tasks and are sold as complete packages. Categories include operating systems, such as Windows and Linux; applications, such as word processors and Web browsers; and utilities, such as virus protection programs and pop-up blockers. Most software purchases are made by businesses seeking better tools to manage the complexities of running operations, record keeping, and controlling the flow of money in and out of an enterprise. It’s not always the quality of the code that determines the most successful software, but how well that software meets an actual business need. Probably the quickest way to talk yourself out of a job in this segment is to make the technology seem more important than the end user. Marketing is critical to the success of any software product, partly because there are so many companies competing in the software market, and partly because computers are still new to a lot of people and business processes. In fact, in some companies that produce software, the marketing department calls the shots. At the other end of the totem pole, technical writers are employed at most computer software companies to write user documentation, either as

Introduction

Industry Overview

manuals or, increasingly, as online help. The industry also employs—in descending order of technical expertise—software testers, customer service reps, sales personnel, and staff for the usual array of business functions, from human resources to accounting.

Careers

Industries

Introduction

Industries and Careers for MBAs and spreadsheet programs, are experimenting with this model. One of its advantages is that improvements can be made to existing software programs on an ongoing basis; if there’s a bug in the program, it can be fixed now—today—giving users the benefit of the improvement rather than having them wait until the next official release..

Open Source Linux system software, the centerpiece of the opensource movement (which champions free software for all and encourages developer contributions to the software), is finally making a splash in the business world. An increasing number of companies, including Credit Suisse and Merrill Lynch, have seen the benefits of not having to pay for software and upgrades and have adopted Linux environments. What’s more, many organizations and even countries feel that Linux adoption is a way to curb Microsoft’s monopolistic power. Computer makers such as Dell and HewlettPackard have responded by shipping PCs and servers loaded with Linux. And big business-software providers such as BEA Systems, SAP, and Veritas have made products that run on Linux.

How It Breaks Down The computer software market is most commonly segmented according to the type of work a product does. Several of the major market segments are listed below, along with the names of a few companies that are active in each.

System Software Microsoft Windows is by far the dominant example in this category—but not the only one. Apple’s Mac OS X is still alive and well, while Linux is gaining a reputation as a reliable alternative in business settings. Red Hat has actually made a business out of packaging and providing support for a version of Linux, which itself is available free on the Internet.

Corporate social responsibility, according to one insider, is “definitely a hot issue.”

Gaming Video games now take in more of Americans’ money than movies on the big screen, many of which are themselves not so much products of photography as they are shifting digital displays rendered with extremely powerful animation software. Video game giant Electronic Arts cracked the $3 billion revenue threshold in 2005 and has seen its numbers rise since then. Lots of other players in this space are making a pretty penny as well. Meanwhile, sales of professional animation software, which can cost thousands of dollars, continue to climb. And the growth in demand for gaming software for non-computer platforms (such as cell phones) has given a further boost to this sector. Creative types who want to apply their talents to making games can find plenty of opportunities with companies making software meant to entertain.

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Productivity Productivity software includes word processing, spreadsheets, presentations, database management, graphic design, and other applications that help people do their jobs. Key players are Adobe (Photoshop, Illustrator, InDesign), Microsoft (Word, PowerPoint, Excel), and Autodesk (CAD applications).

Enterprise The term denotes the large and expensive software packages sold by the likes of Oracle, SAP, and IBM that enable companies to organize the complex flow of materials, payments, and data necessary for the vast array of global operations that keep the modern corporation working, as well as less expensive niche software packages sold by smaller, specialized players in the enterprise software space.

Education Educational software helps your kids learn to read, teaches you a foreign language, stimulates logical thinking, and so on. This category also comprises

children’s educational games, the as-yet slow-to-catchon electronic book industry, teaching resources, and music instruction. Key players in this area are Disney, Microsoft, and Scholastic. Introduction

Key Computer Software Companies Bank

1-Yr. Change (%)

Employees

Microsoft (1)

44,282

11.3

71,000

IBM Software

18,204

8.2

n/a

Oracle (2)

17,996

25.1

56,133

SAP (3)

12,408

23.1

39,355

Automatic Data Processing

8,882

4.5

46,000

Symantec (2)

5,199

25.5

17,100

Sega Sammy Holdings (3)

4,705

–1.9

6,416

Fiserv

4,544

11.9

23,000

SunGard Data Systems

4,323

8.0

16,600

CA (2)

3,943

3.9

14,500

Electronic Arts (2)

3,091

4.7

7,900

Convergys

2,790

8.0

75,000

Adobe Systems

2,575

31.0

6,082

Konami (2,3)

2,374

6.4

12,218

Intuit

2,342

14.9

7,500

DST Systems

2,236

–11.1

10,500

2,071

–0.7

5,900

1,900

5.2

10,099

Xilinx (1,2)

1,843

6.7

3,353

Apple (software) Inc. (1)

1,279

17.0

n/a

KLA-Tencor SAS Institute

(4)

Industries

2006 Revenue ($M)

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Careers

(1) Highly diversified company; figures include departments that operate in other industries (2) 2007 figures (3) Foreign company; figures reflect worldwide sales and employment (4) 2005 figures Sources: Hoover’s; WetFeet analysis

Industries and Careers for MBAs

Introduction

Gaming A highly competitive and extremely broad market segment, this includes role-playing games, driving and flight simulation, sports, strategy games such as chess, and children’s games. Several key players are Activision, Electronic Arts, Take-Two, and THQ. Also, note that many small, thriving studios use the bigger players for distribution and marketing, and there are big-name individual designers who will work for game companies on a project-by-project basis.

Key Jobs for MBAs Product/Project Manager

Job Prospects Don’t count on the high salaries that were typical of the industry in the late 1990s. Now that software development can be outsourced to many politically stable, English-proficient countries with advanced communications infrastructures, the expanded supply of technically skilled (and low-cost) workers has blunted demand. Still, don’t underestimate the power of the local: It’s hard to collaborate efficiently with workers many thousands of miles away; many software projects—especially those with tight deadlines, rapidly changing requirements, and applications specific to U.S. regulations and culture— will stay in this country. Take heart from the Bureau of Labor Statistics, which predicts that occupations in the computer software industry will be some of the fastest-growing between 2004 and 2014.

Careers

Industries

Product managers take a software title from conception through development to the finished product. They define the features that the product will encompass and work with teams of designers, engineers, writers, and quality-assurance testers. Product managers typically hold MBAs or have extensive experience in the software field. Salary range: $65,000 to $95,000

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Much of the activity in computer software is happening in Silicon Valley, but you might want to check out opportunities in other high-tech regions, including Atlanta, Austin, Boca Raton, Boston, Dallas, Denver, Minneapolis, New York, and the Research Triangle area of North Carolina. Successful software businesses are, of course, built on more than technical talent. Sales, marketing, and customer service provide many jobs for those who prefer thinking and talking about software to actually creating it. On the technical side, high-level software architecture skills are likely to become more valuable as the nuts and bolts of software projects are outsourced overseas.

Additional Resources Computerworld (www.computerworld.com) Developer.com (www.developer.com) InformationWeek (www.informationweek.com) Internet.com (www.internet.com) Slashdot (http://slashdot.org) Software & Information Industry Association (www.siia.net)

Consulting

in a particular firm, explore the role that the following industry trends may be playing in its practice.

Industry Overview

A New, and Different, War for Talent

consultants leaving firms was slightly lower in 2006 than in 2005, voluntary attrition remains high as a strong economy creates attractive opportunities for consultants outside of the large management consulting firms. Meanwhile, firms are working hard to grow their revenue—and with billing rates generally stagnant and only beginning to rise, they need people to do it. As a result, competition among firms for top candidates has been stiff. A number of major firms expect to grow their revenue by double-digit numbers in 2007—a promising shift that should give job seekers plenty to get excited about. And it’s a welcome prospect WETFEET INSIDER GUIDE

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Careers

Each consulting firm has a set of new programs and developments, but you should familiarize yourself with a number of industry-wide trends. If you’re interested

“My firm isn’t going to be a public-sector firm, but I’ve heard more about it than I thought I was going to hear,” says a newbie at an elite strategy firm.

Industries

Trends

The War for Talent first made news during the dotcom boom, as double-digit growth created strong demand for consulting services while lucrative (though often speculative) dotcom opportunities lured graduates away from consulting careers. During that period, voluntary turnover rates at many consulting firms were in the 20- to 25-percent range. After the dotcom crash and resulting economic downturn, voluntary turnover fell to the single digits. With the resurgence in the economy—and new opportunities across industry sectors—consultants are leaving in higher -than -average numbers. And while the number of

Introduction

So you’re about to graduate, and you think you want to be a management consultant. Or more likely, you think you’ll spend a few years as a consultant and then move on to other things. You’re not alone. Consulting firms are traditionally among the largest employers of top MBAs, and competition for jobs is stiff every year. More than half the people in top MBA programs and a significant number of college seniors flirt with the idea of becoming a management consultant after graduation. It’s a high-paying, high-profile field that offers students the opportunity to take on a lot of responsibility right out of school and quickly learn a lot about the business world. In essence, consultants are hired advisers to corporations. They tackle a wide variety of business problems and provide solutions for their clients. Depending on the size and chosen strategy of the client, these problems can be as straightforward as researching a new market or as complex as totally rethinking the client’s organization. No matter what the engagement, the power that management consultants wield is hard to scoff at. They can advise a client to acquire a related company worth hundreds of millions of dollars, or reduce the size of its workforce by thousands of employees. One word of clarification: Consulting is a big, onesize-fits-all term that includes virtually any form of advice-giving. This industry profile focuses primarily on the flavor known as management consulting. Often called strategy consulting, this segment of the industry includes firms that specialize in providing advice about strategic and core operational issues. Although some of the highest-profile firms populate this segment, they’re not the only ones doing consulting.

Industries and Careers for MBAs

Industries

Introduction

for graduates, who can expect not only more job opportunities but hefty pay as base salaries and signing bonuses increase.

Externalities and CSR A few of the insiders we spoke to in 2006 and 2007 mentioned the growing role of externalities in consulting engagements—consideration of things outside the engagement that could affect the industry sector, such as rising energy prices brought on by declining rates of oil production, the economic consequences of global warming, or the long-term health effects of a specific chemical or product. Understanding, planning, and accounting for externalities has been a growing concern among many global businesses, as they can often affect the cost of goods (the way rising oil prices affect the price of plastics and distribution, for example), government regulation (which can force client businesses to change practices), and the bottom line (such as with lawsuits for a faulty or harmful product). Similarly, corporate social responsibility (CSR) regularly ranks as a top concern for CEOs, and is an issue consulting firms can often play a role in addressing. CSR issues range widely, from executive pay policies and treatment of workers overseas or the amount of CO2 gases the company produces to philanthropic activities.

Careers

Growth Sectors In 2006, high-growth areas included chemicals, energy, and utilities; financial services; health care; and the public sector. A number of insiders report an increase in enterprise resource planning (ERP) engagements, on both the IT and strategy sides. ERP systems integrate and automate business practices, such as payroll and ordering. Look for moderate growth in consumer packaged goods, communications and media, business services, and pharmaceuticals. Asia continues to come on strong. Analysts recently have reckoned that companies in China need to apprentice some 75,000 executives who can work in a global market over the next five years if 24

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they want to meet growth targets; they have only 3,000 to 5,000 today. “Dealing with growth and change opportunities in China is on our mind,” one consultant says. Firms have been bolstering their Asian practices to meet demand there in recent years; McKinsey, for instance, increased hiring in Asia by 20 percent in 2006 over the previous year.

How It Breaks Down People who want a career in consulting can find a number of attractive choices. To help you get a better handle on the options, we’ve grouped the consulting world into several different segments. Keep in mind, however, that our groupings are flexible. Firms in one group can and do compete directly with players in other segments. Also, consolidation, growth, and market gyrations rapidly change the landscape. One final caveat: Where we’ve placed a firm does not reflect the quality of the organization.

Elite Management Consulting Firms This group is populated by a few top strategy firms— Bain & Company, Booz Allen Hamilton, Boston Consulting Group, McKinsey & Company—and a host of smaller challengers. The bulk of the work done by these firms consists of providing strategic or operational advice to top executive officers in Fortune 500 companies. For this, they charge the highest fees and enjoy the most prestige. They also have the biggest attitudes, work the most intense hours, and take home the most pay. The elite management consulting firms fight to woo the top graduates from the best graduate and undergraduate schools. Although some elite firms differentiate themselves by specializing in particular industries or functions, most consultants who work for this group of firms are generalists who work on a broad range of projects and industries.

Big Four–Affiliated Consulting Firms The Big Four were the Big Five until Andersen went bankrupt after the Enron scandal, driving what at the time seemed to be the final stake into the heart of a historically lucrative marriage between consultants and

Human Resources Consulting Technology’s not your thing? How about the other end of the spectrum? A number of consulting firms specialize in providing human resources advice. This can include everything from designing an employee evaluation and compensation system, to conducting organizational effectiveness training, to helping an organization through a merger or some other significant change. Because such work is so important, HR consulting firms often work with relatively senior employees at client organizations. HR consultants frequently put in as many hours and travel as much as their counterparts in general management consulting.

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Careers

Within the universe of strategy and operations, consulting firms constitute a significant subgroup of firms that specialize in a particular industry, process, or type of consulting. Although it encompasses too many firms to name, this group includes players that have expertise in particular fields. If you’re interested in a particular industry or type of consulting, these firms offer excellent career opportunities. Typically, they’re smaller than the big-name strategy firms and work with a more specialized group of clients—so they won’t usually require you to work in industries that don’t interest you. Insiders tell us that working for one of these firms may give you more marketable experience if you decide to leave the world of consulting. Examples of boutique firms are Cornerstone Research (litigation support), Gartner (high-tech research), and Pittiglio Rabin Todd & McGrath (hightech operations).

If you’re technologically inclined and love designing computer systems and applications, this might be the area for you. Firms here typically take on large projects to design, implement, and manage their clients’ information and computer systems. In contrast to pie-in-the-sky strategy consulting, which involves work that can often be done at the home office, technology consulting frequently takes place in the bowels of the client organization. A project might involve, say, creating a new inventory tracking system for a national retailer. Such a project might include analyzing the client’s informational needs, acquiring new hardware, writing computer code to run the new system, and syncing the systems to deliver information in real time over the Internet. In general, this kind of consulting job requires large teams of people who actually do the computer work. As a result, there are usually more opportunities for people from undergraduate or technical backgrounds than from MBA backgrounds, and it’s not the same high-prestige work strategy consultants are known for. Technology and systems firms have also moved aggressively to take on businessprocess outsourcing in order to manage elements of a client’s business, such as a call center. In most cases, these jobs pay less than those at the top strategy firms.

Industries

Boutique Strategy Firms

Technology and Systems Consulting Firms

Introduction

auditors. When Andersen went bankrupt, consulting firms were already separating from their audit partners: Ernst & Young had sold its consulting practice to Cap Gemini to form Cap Gemini Ernst & Young (now Capgemini), and KPMG Consulting had broken off from its accounting side and gone public (it has since changed its name to BearingPoint). Other members of this group include PricewaterhouseCoopers, which sold its consulting unit to IBM in July 2002, and Deloitte Consulting, where a buyout by consulting partners was scotched (the consulting arm has since been reintegrated into Deloitte). In 2005, there were whispers about accounting firms rebuilding their consulting practices, as some of the conflict-of-interest issues have faded. The Big Four firms offer strategic advice, information systems support, and other, more specialized consulting services to many of the same corporations served by the elite consulting firms. They also boast strong information technology capabilities on projects requiring heavy systems-implementation work, and in some cases offer outsourcing to compete with the technology and systems consulting firms.

Industries and Careers for MBAs

Introduction

Representative firms include Accenture (Change Management Group), Deloitte, Hay Group, Hewitt Associates, Mercer Human Resource Consulting, Towers Perrin, and Wyatt Group.

Key Jobs for MBAs As each firm has its favorite buzzwords, so it also has unique terminology for its rank and file. While the titles might vary from firm to firm, the roles can basically be categorized as analyst (also called “research associate” or “staff consultant” at some firms), consultant (or “associate” or “senior consultant”), manager, and partner or VP.

> TIP

Industries

There are a lot of good management consulting firms—interview with as many of them as you can.

Associate/Consultant/Senior Consultant This is the typical port of entry for newly minted MBAs (and increasingly for non-MBA graduate students as well). Senior consultants often perform research and analysis, formulate recommendations, and present findings to the client. And at many firms, they have to implement those great ideas, too. Although this is usually a tenure-track position, a fair number of consultants will leave the business after two or three years to pursue entrepreneurial or industry positions. Salary range: $70,000 to $130,000 or more, with bonus

significant work experience directly into the manager position, particularly in their IT practices. In addition to having more rigorous responsibilities for managing the project team, the manager will typically be a primary point person for client interactions. Salary range: $75,000 to $150,000, but can be higher

Partner or VP Congratulations! You’ve forded the River Jordan of consulting and arrived at the Promised Land. Note that some firms further subdivide partners into junior and senior grade. And, if you aspire to it, there’s always that chairman or CEO position. As a partner, one of your big responsibilities will be to sell new work. Fortunately, as with other big-ticket sales jobs, the pay can be quite rewarding. Salary range: $250,000 to several million dollars at leading firms

Job Prospects Overall, the management consulting industry outlook is positive. Around 44 percent of firms saw doubledigit growth in 2005, and midway through 2006 about half the firms anticipated double-digit growth for that year, according to Consultants News. Insiders reported heavy recruiting in 2006, for the second year in a row. Competition for graduates reflects several trends, including a shrinking number of students earning MBAs; more competition from other industries, such as technology, financial services, real estate, and government; and voluntary attrition typical of a strong economy, as consultants leave for new opportunities. These trends bode well for the future, though they don’t mean that getting a job will be easy in 2008.

INSIDER SCOOP “You have to be ready to play the game and really prepare for the interview process.”

Careers

Manager After a few years, a senior consultant will move up to manager. As the title implies, this usually means leading a team of consultants and analysts toward project completion. Some firms may hire MBAs with 26

W E T F E E T I N SIDER GUIDE

Be aware of the changing dynamics of the industry. It’s become more mature: The major sectors—HR, IT, operations, and strategy—are increasingly becoming specialty markets with growth drivers unconnected

Key Consulting Firms Firm

Employees

IBM Global Services (1)

47,357

2.5

50,000

Electronic Data Systems

21,268

7.6

131,000

Accenture

18,228

6.6

140,000

14,857

1.6

79,000

Capgemini

10,159

23.3

67,889

Deloitte Consulting (1)

7,814

n/a

33,000

Mercer

4,225

11.0

15,000

McKinsey & Co. (1)

3,800

20.6

12,900

BearingPoint

3,444

1.6

17,400 (1)

Booz Allen Hamilton (1)

3,000

11.1

17,000

Hewitt Associates

2,857

–1.4

24,000

Aon Consulting Worldwide (2)

2,148

n/a

7,500

The Boston Consulting Group

1,500 (1)

n/a

3,300 (2,3)

Towers Perrin (1)

1,410

–13.0

5,171

Watson Wyatt Worldwide

1,272

72.5

6,235

Bain & Co. (1)

1,1301

-n/a

3,200

A.T. Kearney (1)

798

–1.0

2,500

Roland Berger (1)

723

8.7

1,500

Navigant Consulting

682

18.5

2,475

The Corporate Executive Board Co.

461

27.2

2,279

Computer Sciences

(2)

Industries

1-Yr. Change (%)

Introduction

2006 Revenue ($M)

(1) 2005 figure(s) 2(2) 2007 figure(s) (3) Number of consultants only (4) 2007 figures Sources: Hoover’s; individual firm websites; WetFeet analysis

Careers

to the other sectors. Meanwhile, clients have grown savvier, in some cases creating their own in-house consulting teams, which has put pressure on billing

rates and increased demand for consultants with industry experience. “For the pre-MBA experience,” one insider says, “it would be advantageous for WETFEET INSIDER GUIDE

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Industries and Careers for MBAs

Firm

Consumer Electronics

1

Bain & Co.

Industry Overview

2

McKinsey & Co.

3

PointB

4

Boston Consulting Group

5

Monitor

6

Kurt Salmon Associates

7

PRTM

8

Mercer

9

Diamond

10

Huron

Consulting Magazine’s “Best Firms to Work For, 2006” Introduction

Rank

Industries

Sources: Consulting Magazine

candidates to make sure they’re getting some serious, substantial experience—industry experience for the type of client engagements they want to work in post-MBA.”

Additional Resources

Careers

Ace Your Case® series of consulting case interview guides (available from www.wetfeet.com) Careers in Management Consulting (WetFeet Insider Guide, available from www.wetfeet.com) Consulting Central (www.consultingcentral.com) Consulting Magazine (www.consultingmag.com) Institute of Management Consultants USA (www.imcusa.org) Killer Consulting Resumes! (WetFeet Insider Guide, available from www.wetfeet.com)

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The consumer electronics industry manufactures and distributes everything from alarm clocks, calculators, telephones, stereo components, and televisions to digital cameras, GPS receivers, and portable multimedia devices—basically, everything you see when you go to Best Buy or Circuit City. (Some industry analysts also consider desktop and laptop PCs consumer electronics.) Consumer electronics is big business: In 2006, in the U.S. alone, consumers spent more than $111 billion on consumer electronics products—3.6 percent more than in 2005. The industry employs a host of engineers, designers, marketers, salespeople, customer service reps, and finance gurus to continually improve familiar products as well as come up with the next big must-have gadget. Although much of the actual manufacturing of consumer electronics products is done in Asia and other low-labor-cost locations, there are many career opportunities in the industry in the U.S., especially in business and marketing functions. You can earn your stripes at a multinational corporation like Samsung or Mitsubishi, where big money backs big products such as high-definition televisions and smartphones (mobile handsets with advanced operating systems and powerful processors), or you can try your hand at a startup that’s pushing the consumer electronics envelope in one market niche or another. So before you start your job search, think about whether you like the structure and resources (and bureaucracy) that a big organization will have, or prefer the flexibility and cutting-edge spirit (and barebones budget) of a younger, smaller company. Job seekers should also keep in mind that many consumer electronics products are global brands, so lots of companies have opportunities for international positions and travel, and foreign language skills are often highly desirable. In the U.S., while there is some

Before you start your job search, think about whether you’d rather have the structure and resources (and bureaucracy) of a big organization, or the flexibility and cutting-edge spirit (and bare-bones budget) of a younger, smaller company.

Falling Prices

How It Breaks Down The consumer electronics industry includes manufacturers of all shapes and sizes. The largest are multinational conglomerates with more than 100,000 employees and interests in many different industries. Some of the smallest have only one office with fewer than 50 employees, all of whom are focused on one product. In the middle are manufacturers that offer a range of products within a certain category, such as speakers and audio accessories. Because companies of all sizes can make similar products, industry observers usually break down the market by product category rather than company size.

Video These days, all eyes are on video. As the switch is made from analog to digital technology, the market is quickly expanding beyond traditional televisions, VCRs, and camcorders to include high-definition digital televisions, personal video recorders (PVRs), elaborate home theater systems, home satellite systems, set-top Internet access devices designed to bring interactivity to the television, and cell phones and other handheld devices that can download, store, and play music and video. Key players include Matsushita (Panasonic), Philips (Magnavox), Sony, Thomson (RCA), TiVo, and Microsoft (WebTV). WETFEET INSIDER GUIDE

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Careers

These days, because so many consumer electronics products rely on semiconductors for their functionality, Moore’s Law—which states that semiconductor speed doubles every 24 months— applies just as much to the consumer electronics industry as it does to computer hardware. That means consumer electronics companies are developing new and improved products all the time. If you’re one of the many consumers who crave the latest and greatest gadgets, it’ll cost you a pretty penny to stay on the cutting edge. But if you don’t need top-of-the-line consumer electronics products—if you’re content with a 5-megapixel digital camera, for instance, and prepared to leave the 10-megapixel camera to the hard-core gadgetheads—just wait a little while, and the price on the product that’s right for you will almost certainly decrease substantially.

As usual in consumer electronics, any number of cool, new products are on or about to reach electronics store shelves. For example, to take advantage of the improved sound offered by digital radio, many of the big electronics makers are bringing digital home and car radios to market. More and more digital cameras include significant digital video recording capability. And some refrigerators on the market have TV screens embedded in them, which you can even use to surf the Net. Satellite TV in your car, satellite radio systems that give you up-to-the-minute traffic reports, handheld mediastorage devices, live TV on your cell phone…the list of innovative new consumer electronics products already available or about to hit the market goes on and on.

Industries

Trends

Cool New Products

Introduction

concentration of consumer electronics jobs on both coasts, the industry is sprawled across the country. Many of the large companies have multiple offices to choose from, with each location housing a different product line or corporate function.

Introduction

Industries and Careers for MBAs Audio

Key Jobs for MBAs

Vinyl may be the latest retro resurgence, but it can’t stop the digital wave. Consumers can now choose from CDs, DVDs, MiniDiscs, MP3s, and proprietary digital formats from the likes of Apple and Sony to get digital-quality sound. The proliferation of digital formats is also driving new demand for upgraded home theater systems, multimedia PCs, car stereos, and portable players. Key players include Bose, Harman International, Sony, and Toshiba.

Inventing, designing, building, manufacturing, distributing, and selling consumer electronics is a big business that requires lots of people with lots of different skills. On the business side, this industry employs marketers, product managers, customer service professionals, and operations specialists.

Careers

Industries

Mobile and Wireless Mobile electronics and wireless technology have transformed communication. Better technology and lower prices have turned high-end products like cell phones and pagers into commodities sold out of sidewalk kiosks. And broad market demand is fueling the race to develop the next generation of smartphones and wired PDAs, which will use high-speed wireless networks to transmit voice and data. High-end car audio, security, navigation, and multimedia systems manufacturers also are taking advantage of the new digital technologies and making inroads in the mass market. Key players include Motorola, Nokia, and Samsung.

Marketer Marketers are the people who convince consumers to buy consumer electronics products that—let’s face it— in most cases they don’t really need. Responsibilities can include pricing strategy, distribution, promotion, advertising, and public relations. Marketers analyze

If you work in a hot growth sector—wireless devices, for instance—you’re bound to have plenty of appealing employment opportunities in the coming years.

Integrated Home Systems Picture this: While sitting at your computer at work, you pull up the website for your home, check out the live video feed to make sure your new puppy isn’t devouring the muffins you forgot to put back in the fridge this morning, click a link to preheat the oven for dinner, and turn up the thermostat to warm the house. This is the smart home. Smart homes are powered by integrated home systems—electronic products that are networked together and connected to the rest of the world via the Internet or wireless technology. Players in this fledgling market include IBM, and appliance manufacturers such as Sunbeam and Whirlpool are joining the fray by experimenting with products that are network-friendly.

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market trends, prepare sales forecasts, manage inventory levels, and coordinate trade show preparation. Product management positions usually require an MBA. Candidates should have strong analytical, business planning, and presentation skills, plus good, creative judgment. Salary range: $30,000 to $150,000

Product Manager This job requires that you have enough background in telecommunications to oversee all aspects of a product, from definition through development and release. A telecommunications product manager must coordinate with engineers, marketers, and salespeople to bring

Key Consumer Electronics Companies Company General Electric

Samsung Electronics

(1)

Matsushita Electric Industrial

1-Yr. Change (%)

Employees

163,391

8.8

319,000

110,798

21.9

475,000

78,993

0.9

128,000

75,602

–6.7

334,402

Sony

70,513

11.0

158,500

Toshiba

53,945

–0.1

172,000

Microsoft

44,282

11.3

71,000

Sharp

23,787

0.1

46,872

LG Electronics (1)

23,542

39.4

66,614

Sanyo

21,805

–10.9

106,389

Apple

19,315

38.6

17,787

Whirlpool

18,080

26.3

73,000

AB Electrolux

15,172

–6.8

69,523 (1)

Eastman Kodak

13,240

–7.0

40,900

Kyocera

7.7

61,468

10,576

0.1

391,948 (3)

Thomson

7,729

14.7

30,000

Pioneer

6,348

–6.9

38,826

Yamaha

4,452

–8.5

25,298

Nintendo

4,327

–9.6

4,033

Industries

10,881

Royal Philips Electronics

(2)

Introduction

Siemens

2006 Revenue ($M)

(1) 2005 figure(s); (2) 2007 figures (23) Includes all divisions (3) 2007 figures Sources: Hoover’s; WetFeet analysis

new products to market. This requires an even blend of technical, management, and business skills. Salary range: $70,000 to $180,000

Job Prospects

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Careers

The U.S. Bureau of Labor Statistics expects the number of jobs in this industry to shrink by some 7 percent between 2004 and 2014, compared with a 14percent increase in the number of jobs overall during that period. But the reality here is that job prospects will vary tremendously depending on the specific

industry segment you’re looking to work in and the specific career you want to pursue. If you work in a hot growth sector—wireless devices, for instance—you’re bound to have plenty of appealing employment opportunities in the coming years. But the outlook won’t be as good in more mature sectors (such as in home audio, where PCs and MP3 players are nipping at traditional stereo systems’ heels). Because of increasing automation and outsourcing, the outlook for production and customer service jobs isn’t promising. But electrical engineers, technicians,

Introduction

Industries and Careers for MBAs and others involved in designing and testing the ongoing flow of new products being brought to market will face much better prospects. A key to ongoing success in your career in consumer electronics will be the ability to think about the ways in which digital content, piracy protection, electronic product design, and available networking technology can interact to produce something that’s truly entertaining, practical, and fun to use. Ladies and gentlemen, find the next iPod!

Additional Resources

Careers

Industries

Consumer Electronics Association (www.ce.org) Electronic Industries Alliance (www.eia.org) Electronics Technicians Association International (www.eta-sda.com)

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Consumer Products Industry Overview “Consumer products” is one of those elastic phrases that can include any of the jars, boxes, cans, and tubes on your kitchen and bathroom shelves—or it can expand to include pretty much everything you charged on your Visa card last year. This industry manufactures and, perhaps more importantly, markets everything from food to small appliances. The consumer products industry can be divided into four groups: beverages, food, toiletries and cosmetics, and small appliances. Most companies offer products that fit primarily into one of these groups, although a company may have a smattering of brands that cross the lines. Virtually all companies are similar in organizational structure, emphasis on brand management, and approach to business. Consumer products are the foundation of the modern consumer economy. The industry itself not only generates an enormous portion of the gross domestic product, it also pumps huge amounts of money into other industries, notably advertising and retail. Individual consumers make up the majority of this industry’s customers; sales are concentrated in the U.S., Japan, and Western Europe, though other parts of the world are working hard for the privileges of wearing clothing emblazoned with company logos, eating processed food, and chopping vegetables with an electric motor instead of a traditional utensil. Success in consumer products is all about marketing an individual product, often by promoting a brand name. The competition for shelf space is ferocious, so package design, marketing, and customer satisfaction are key elements. The majority of companies that sell consumer packaged goods (CPGs) are conglomerates consisting of numerous diverse subsidiaries selling brands that consumers recognize. Sara Lee produces everything from Ball Park franks to Hanes underwear to

Trends Alliances Many of the more forward-thinking consumer packaged goods companies are trying to enhance growth via alliances with other companies. One CPG insider says of her company’s partnership on a product line with a big industry competitor, “It seems amazing that we’re partnering with ‘the enemy,’ but it’s true.” CPG companies are doing this for a number of reasons. Some are doing it to create and bring to market new products with less risk than if they were going it alone; in recent years, for instance,

Other Technologies As in most areas these days, technology continues to become a more significant factor in doing business in the CPG industry. One of the biggest technology trends has been the increasing importance of customer relationship management (CRM) applications. CRM software collects information about customers, their behavior, and all aspects of their relationship with a company, allowing the company to better understand the marketplace for its products and how to increase sales and market presence. If you go into brand management in a CPG company, expect to use data collected by CRM applications to tailor your sales efforts. The Internet is another area of technology that’s had a big impact on CPG marketing. In the online arena, the most successful companies are using the interactivity of the Web to strengthen the relationship between their brands and consumers. Campbell’s, Coca-Cola, and Hershey’s all have online gift shops where Internet surfers can buy branded collectibles such as decorative tins, T-shirts, and plush toys.

How It Breaks Down Below are the product categories found in the CPG industry. Many companies—especially smaller ones—operate in only one category. Others, including many of the big dogs of the industry, are diversified CPG companies—they make and sell products in multiple categories. Nestlé’s brands, for WETFEET INSIDER GUIDE

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Careers

PepsiCo and Starbucks teamed up to create a line of bottled coffee drinks. Some are doing it to reach new demographics; for example, in recent years, Coca-Cola teamed with Danone (the makers of Dannon yogurt) to distribute bottled-water products to new customer segments. Others are doing it to expand geographically into new markets, such as General Mills joining forces with Nestlé to market breakfast cereals outside North America. And some do it for other reasons, including increasing operating efficiencies, cutting costs, or reducing capital outlays.

In recent times, Wal-Mart, Albertson’s, and other retailers of CPGs, as well as the U.S. Department of Defense and other diverse organizations, have given their CPG suppliers mandates to tag their product shipments using or radio-frequency identification (RFID) technology so those retailers can improve their supply chain efficiencies. This means that at most of the big CPG companies, there’s been a major focus to get up to speed with RFID technology—which in many cases, has meant good news in terms of job opportunities for engineers and other tech types.

Industries

“It seems amazing that we’re partnering with ‘the enemy,’ but it’s true,” says a CPG insider of her company’s partnership with a competitor.

RFID

Introduction

Endust furniture polish. Unilever, an industry giant based in England, sells teas and soups, pasta and pizza sauces, ice cream, bath soaps, shampoo, salad dressing, margarine, laundry detergent, toothpaste, and frozen foods. Other big players in the industry include Nestlé, Clorox, Kraft, Procter & Gamble, SC Johnson, and ConAgra.

Introduction

Industries and Careers for MBAs instance, include products in the food (Stouffer’s, Hot Pockets), beverage (Nestea, Poland Spring), and pet food (Alpo, Purina) categories. In many cases, diversified CPG companies started out by making products in just one category, but diversified over time via mergers and acquisitions.

Beverages Intensely competitive and hugely reliant on advertising, this is a mature industry. Different segments of the beverage world include beer (Anheuser-Busch, Molson Coors, SABMiller), soft drinks (Coca-Cola, PepsiCo), and juices (Tropicana is owned by PepsiCo, Minute Maid by Coca-Cola).

Industries

Foods There may be a little less consolidation in the food industry than in beverages, but this, too, is a mature and competitive industry with single-digit growth. Most of the packaged goods that fill our pantries, cupboards, and refrigerators come from a handful of big-league corporate players. Some are household names: Campbell’s, General Mills, H.J. Heinz, and Kellogg’s have spent enormous sums of money to imprint their names on your brain. Other big players, such as ConAgra (Healthy Choice, Hunt’s, and Wesson) are better known for brands they own.

Toiletries, Cosmetics, and Cleaning Products

Careers

Baby boomers aren’t getting any younger, and vanity will outlast us all. So will household dirt. In short, this is a solid category for the foreseeable future. With roughly four times the revenue of its nearest competitor, Procter & Gamble is the Godzilla of this group—and indeed, of the CPG world in general. Other players include Clorox, Colgate-Palmolive, Kimberly-Clark, Revlon, SC Johnson, and Unilever.

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Footwear and Apparel If a consumer product is wearable and it comes in a package, this is where it’s categorized. Here’s where companies like Nike and Reebok operate. Some diversified CPG companies, such as Sara Lee, which counts Champion, Wonderbra, and Hanes among its brands, also operate in this category.

Key Jobs for MBAs This is a hierarchical business, and though merit and hard work count for a lot, even the wunderkinds have to do time before they’re promoted. Senior management positions in marketing, operations, R&D, and other departments tend to be filled from within the company (or at least from within the industry).

Assistant Brand Manager As an assistant brand manager, it’s your job to coordinate the various marketing functions— including packaging, advertising, promotions, and public relations—to execute the marketing plan. You’ll head up a number of cross-functional teams that work on various parts of your business. For example, a product improvement project may bring together R&D, marketing research, packaging, finance, and operations. A change in your consumer promotion plan might require a coordinated effort between representatives from promotions and operations. Assistant brand managers shift gears all day long. One minute they’re brainstorming new promotion ideas, the next they’re wading through monthly volume projections. Salary range: $45,000 to $85,000

Market Researcher To do this job, you need a strong interest in the psychology of customer behavior and an ability to coax information out of prospective purchasers. Tools of the trade include focus groups, one-on-one interviews, Nielsen data, and quantitative surveys. People can enter these positions from undergraduate, MBA, or industry backgrounds. Salary range: $30,000 to $100,000

Manufacturing or Finance Manager

Job Prospects The big consumer products companies employ people in a range of fairly standard corporate functions—everything from accounting and finance, human resources, and IT to R&D operations, and sales. You can find yourself a good career in these and other functional areas in the industry. However, none of these will ever get the focus that one functional area gets in CPG companies: marketing and brand management.

Industries

In many CPG organizations, employees are expected to multitask and cross-train within their departments, and to wear several hats.

According to the 2006–07 Occupational Outlook Handbook from the U.S. Bureau of Labor Statistics (BLS), employment in the field of marketing overall is expected to see a higher-than-average increase—27 percent—through 2014. This sustained job growth, the Bureau says, will be supported by increasingly intense domestic and global competition in consumer products and services—but it cautions that budding marketers should expect more competition for full-time corporate marketing positions as marketing projects (including brand management) are more frequently outsourced to ad agencies and contract specialists. After a few years in the doldrums due to the recession in the early 2000s, CPG companies started growing again. As a result, some companies increased hiring—although they did so cautiously: The trend across the industry has been to run leaner and meaner, and to try to streamline operations. In many organizations, employees have been expected to multitask and cross-train within their departments, and, frequently, to wear several hats. Still, these are big companies, and turnover happens. And while available brand management positions aren’t plentiful, each year many CPG companies bring at least a few brand management trainees on board.

Introduction

Because of just-in-time inventory pressures, manufacturing and production plants increasingly need MBAs with creative financing skills to help solve problems, assess profitability, and acquire new businesses. In some companies, these finance analysts and managers actually have authority equal to and occasionally greater than marketers. They aren’t responsible for developing marketing plans or working with the advertising agency, but they make many of the important recommendations and decisions that direct the course of business strategy and new product development. Salary range: $60,000 to $125,000

Additional Resources Careers in Consumer Products (WetFeet Insider Guide available from www.wetfeet.com) WetFeet’s consumer products company profiles (www.wetfeet.com) Cosmetic, Toiletry, and Fragrance Association (www.ctfa.org) Brandweek (www.brandweek.com) The Association of Food, Beverage and Consumer Products Companies (www.gmabrands.com)

Careers

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Industries and Careers for MBAs

Careers

Industries

Introduction

Energy and Utilities Industry Overview If the “peak oil” proponents are correct, today’s energy and utilities industries are soon going to die a notvery-distinguished death. Peak oil theorists claim that the amount of oil we can extract from the Earth has already reached, or will soon reach, its peak—and that within decades after that peak, the world’s oil supply will in effect run out. The coming scarcity of fuel, plus the mounting demand for energy (from both industrialized nations, which need energy to run their increasingly complex technologies, and developing countries, which need more energy as they modernize), means that the energy and utilities industries are in need of innovation. Both need to take more risks—whether to uncover new supplies of oil, run giant wind farms, produce cheaper solar cells, develop next-generation nuclear energy facilities, or focus on alternative energy sources for transport. The industrial revolution started with the steam engine and remains dependent on energy produced from natural resources. The process begins when energy companies extract fossil fuels such as oil, coal, and natural gas from the Earth. These natural resources are turned into electricity and delivered to the consumer’s door by power utility companies, or they’re processed into fuels, such as gasoline, propane, heating oil, or industrial coke for making steel. They’re supplemented by water-powered hydroelectric generators and uranium-powered nuclear generators. In any case, the end product is the energy that industrial countries depend on. Without it, we couldn’t run our home appliances or our factories, travel by car or airplane, talk on the phone, or watch television. Conflicting forces will shape the future of the energy industry. Deregulation, initiated by the 1992 National Energy Policy Act, has transformed 36

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energy companies from regulated monopolies into free-market competitors, changing the face of the utilities industry. Continuing expansion of industrial development across the planet will spur increased energy consumption. However, that will cause more pollution and depletion of natural resources, raising the question: Can we continue consuming energy as we have been? The answer: probably not. While Bush administration policies seek to increase the supply of oil and other fuels in the U.S., the rest of the industrialized world has signed up for the Kyoto Protocol, which limits greenhouse gas emissions caused by burning fossil fuels. In the near term, though, neither environmental concerns nor volatile oil prices are likely to threaten the U.S. energy and utilities industries’ roles as major energy consumers and suppliers of technology and expert services. They enjoy annual revenues of hundreds of billions of dollars and demand that could double by 2020.

Continuing industrial development worldwide will spur increased energy consumption, leading to more pollution and depletion of natural resources. Can we continue consuming energy as we have been? Probably not. Trends

Terrorism and Political Unrest The war in Iraq. Terrorist bombings in Lebanon and Saudi Arabia. The never-ending violence between Israel and its Arab neighbors. It all adds up to massive uncertainty for energy and utility companies. Will oil prices remain steady, allowing the companies to

Turning Disaster into Profit U.S. oil companies have been thriving in recent years. Because of the war in Iraq, less oil has been available on the world market; this has put upward pressure on oil prices. Hurricane Katrina caused further price increases. Those higher prices translated into record profits for oil companies in 2005 and 2006. Whether that’s a good thing depends on whether you own oil company stock.

Alternative Energy

Playing Politics

Integrated Oil and Natural Gas We have John D. Rockefeller and his Standard Oil Company to thank for the vertical integration of the world’s largest oil and energy companies. His empire has long since been dispersed, but its legacy remains in the form of giants such as Chevron, ConocoPhillips, and Exxon Mobil, which are involved in every phase of petroleum production and sales—from the extraction of crude oil, through refining and shipping, all the way to the gas pump. Big Oil is a major force in the world’s economy (not to mention politics), but it’s susceptible to global surpluses and plummeting oil prices when members of OPEC (Organization of the Petroleum Exporting Countries) can’t agree to restrain production. Production and consumption of natural gas have grown far more rapidly in recent years partly due to gas environmental advantage over oil. Also, natural gas is relatively less expensive as an electricity-generating fuel—an advantage that’s been magnified by the competitive nature of the electricity industry since deregulation. While Big Oil is increasingly involved in the natural gas business, is still room for specialists such as Questar.

Equipment and Service Halliburton, Schlumberger, and others provide the equipment and services that make it possible for oil, coal, and gas companies to extract their products from the ground. This once-booming sector took a hard hit in the late ’90s due to overproduction. While the largest companies will certainly survive, boutique concerns are more vulnerable. WETFEET INSIDER GUIDE

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Careers

Oil companies don’t retain armies of lawyers and lobbyists—or make huge political contributions—for nothing. Because there are strong ecological arguments against further oil drilling in places like Alaska, oil companies depend on legal and political clout to ensure they’ll be able to continue exploiting oil finds. An example of politics at work can be seen in Florida, where the federal government agreed to purchase from oil companies the rights to oil fields off the Gulf Coast, preventing companies from drilling there.

U.S. energy companies are clustered in the “oil patch” region of Louisiana and East Texas, though many have major offices in Los Angeles and other coastal cities. The Big Oil companies are global; Exxon Mobil alone has a presence in more than 100 countries. By contrast, utilities are generally more local in nature, usually doing business in a single city or region— though with deregulation, this is beginning to change. The vast industry can be broken down as follows.

Industries

Despite the fact that at the moment the country seems determined to drill its way out of any energy crisis whatsoever, renewable alternative energy sources aren’t being ignored. In the case of wind power, solar energy, and biodiesel, tax breaks and other government subsidies play an important role in making these stillexpensive energy sources viable. A number of states have adopted standards that require utilities to buy a set portion of their electricity from renewable sources. General Electric expects to earn about $2 billion in revenue from wind-manufacturing assets it bought from bankrupt energy trader Enron.

How It Breaks Down

Introduction

predict oil revenue (for oil companies) or costs (for utilities) and create business plans they’re confident in? Or will violence on a large or small scale suddenly cause oil prices to skyrocket? The energy and utilities industries, like the world in general, are very volatile places these days.

Introduction

Industries and Careers for MBAs Coal

Key Jobs for MBAs

Coal is used primarily for electricity generation and in a few manufacturing industries. It is increasingly in demand as developing countries such as China and India wire themselves for electricity. However, environmental concerns may put a damper on the use of coal. The 1990 Clean Air Act called for cuts in highsulfur coal production, and there are growing worries about its contributions to global warming. Regardless, its low price and current ubiquity mean that coal production and consumption should continue to be robust for the time being.

Project Manager

Industries

Utilities More than 3,000 utilities in the U.S. deliver electric power to individual homes and businesses. Major players include Southern Company, the nation’s largest investor-owned utility, as well as regional giants such as Consolidated Edison in New York and Pacific Gas and Electric in California. The balance of the industry comprises federal agencies such as the Tennessee Valley Authority; local, publicly owned utilities, which are usually run by municipal or state agencies; and rural, nonprofit electric cooperatives, which serve small communities.

Nonutilities

Careers

Though they’re in the business of electric power generation and distribution, nonutilities serve large individual clients—mostly utility companies that need extra electricity—as opposed to cities or regions. While they only account for about 10 percent of power generation, nonutilities—such as Duke Energy— represent the fastest-growing sector of the industry. In the wake of deregulation, smaller-scale generators are freer to sell energy to big distributors, and small, efficient producers can be quite profitable.

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For candidates who combine technical training with excellent business and communication skills, project management is a good way to go. Stress levels can be high, but so are the pay and the sense of accomplishment that come with the work. These jobs require at least a BS in engineering, as well as an MBA or an excellent industry track record. Salary range: $70,000 to $150,000 or more

Marketer or Public Relations Specialist Marketing people must have a solid understanding of both the client’s energy needs and the utility or energy company’s ability to meet them. Candidates who combine technical and marketing backgrounds have the edge. Salary range: $30,000 to $150,000

For candidates who combine technical training with excellent business and communication skills, project management is a good way to go. Trade Representative Traditionally, people in these positions handled the sales of oil and other energy products in the futures markets. These days, electricity is becoming as much a commodity as oil; as a result, utilities also now offer these types of positions. Candidates should have degrees in either engineering or business and marketing, plus proven negotiation or communication skills. People with both technology and MBA degrees can expect to do particularly well. Salary range: $50,000 to $150,000

Key Energy and Utility Companies Company Exxon Mobil

BP

1-Yr. Change (%)

Employees

377,635

1.9

82,100

312,323

1.8

108,000

(1)

265,764

7.9

97,100

Chevron

210,118

6.0

62,500

ConocoPhillips

188,523

2.8

38,400

Valero Energy

91,833

11.8

21,836

Koch Industries

90,000

12.5

80,000

Marathon Oil

65,499

2.8

28,195

Sunoco

38,715

14.6

14,000

Citgo

27.0

4,000

28,720

23.5

13,700

Halliburton

22,576

7.5

104,000

Plains All American Pipeline

22,144

–28.0

2,900

Constellation Energy Group

19,285

12.6

9,645

Schlumberger

19,231

30.7

70,000

Occidental Petroleum

18,160

11.7

8,886

Tesoro

18,104

9.2

3,950

Dominion Resources

16,482

–8.6

17,500

Exelon

15,655

1.9

17,200

Duke Energy

15,184

–9.3

25,600

Industries

32,028

Hess

(2)

Introduction

Royal Dutch Shell

(1)

2006 Revenue ($M)

(1) Foreign company; figures reflect worldwide sales and employment (2) 2005 figures Sources: Hoover’s; WetFeet analysis

Job Prospects

gains, and will continue to do so. Finally, most sources of petroleum in the U.S. are already tapped out. At the same time, the number of jobs in the water supply and sanitary service areas of the utilities sector is projected to skyrocket, while the job outlook for petroleum engineers and geoscientists looks good for those willing to work abroad. In the energy sector, job seekers face a particularly unstable market as prices (and profits) fluctuate drastically. Although fewer in number than engineering WETFEET INSIDER GUIDE

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Careers

According to the U.S. Bureau of Labor Statistics, the number of jobs in the utilities sector is expected to grow very slowly in coming years. Even worse, the number of jobs in the oil and gas sector is projected to shrink between 2004 and 2014, at least in the U.S. There are several reasons for this. The first is that the spate of recent mergers and acquisitions in both sectors has resulted in more than a few layoffs. The second is that technological advances have led to productivity

Introduction

Industries and Careers for MBAs opportunities, entry-level business jobs should be available mainly in support roles such as accounting and human resources. The fact that many longtime industry pros are entering their retirement years is a major contributor to industry demand for new workers. The deregulation of the utilities industry also means new opportunities. With competition comes the need for expanded marketing, sales, communications, and PR departments. In addition, many utilities, suddenly free to diversify their business interests, have entered the telecommunications industry; Southern Company and American Electric Power lead the way. Such seismic shifts in the industry are sure to open up new opportunities for young, ambitious employees, as formerly stuffy, hierarchical organizations are forced to entertain new ideas.

American Gas Association (www.aga.org) Edison Electric Institute (www.eei.org) Environmental Energy Technologies Division— Energy Crossroads (http://eetd.lbl.gov/einfo-links.html) Energy Information Administration (www.eia.doe.gov) Energy Science and Technology Virtual Library (www.osti.gov/EnergyFiles) Gas Technology Institute (www.gastechnology.org) Oil & Gas Journal (http://ogj.pennnet.com/) Organization of the Petroleum Exporting Companies (www.opec.org)

Careers

Industries

Additional Resources

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Entertainment

and Sports Industry Overview

With the rise of the Internet and other new communications technologies, the field of entertainment is increasingly difficult to define. In this profile, we’re talking about film, television, and music, as well as sports—each a form of entertainment raking in millions of dollars. The first three of these businesses are dominated by enormous, vertically integrated companies such as Sony, Time Warner, and Walt Disney, which have interests in multiple segments of the industry. But there are also thousands of jobs in the entertainment industry at smaller, less corporate companies—film and television production or distribution companies, for instance, and small, independent record companies, talent agencies, and management firms. Similarly, pro sports is dominated by the four biggest spectator sports—baseball, football, basketball, and hockey—but many other sports out there have varying degrees of business sophistication, and even at the Big Four there are numerous (albeit unglamorous and low-paying) jobs in minor-league outfits. In entertainment and sports, the profits come from discretionary spending, so these industries enjoy the most success in economically stable countries where leisure dollars flow freely. Industry companies supply their audiences with large-scale sporting events, music concerts, sitcoms, and silver-screen masterpieces. Simply put, they’re in the business of fun. The culture in this industry is one of anticorporate, studied casualness. There are still uniforms—an everchanging array of baseball caps and jackets in the music business, for example. But they’re invariably less starchy and more expressive of individualism than anything worn to work in the fields of finance or law. And the people? Well, there’s no people like show people, and the sports world has even more pep. This is a high-energy crowd. It’s also a big-ego crowd, and working with its members can be both stimulating and frustrating.

of programs by selling reruns to ancillary markets. In addition, the networks have bought their way into a number of cable operations, so the opportunities for employees to move from cable to broadcast, or vice versa, are even greater than before.

In Film The box-office success of independent films over the past few years has sparked significant changes in the film industry. Hollywood has bought into the appeal—and lower production costs—of characterdriven films, and studios have established subsidiaries that produce only these kinds of films. Consumers and critics alike have rewarded them for this endeavor. Moreover, many studio distribution departments are looking more seriously at foreign markets and other

outside producers as sources of film “product”—partly because these ancillary sources are making movies that filmgoers are responding to, and partly because when they buy a finished film they have complete control over costs. While these trends translate into less work for film crews, they heighten the demand for office personnel, who must find new writers, directors, and actors to put together these back-to-basics productions. Cost-cutting aside, this is Hollywood we’re talking about. Studios are still making special-effects extravaganzas—particularly for summer release—with generation after generation of new special-effects WETFEET INSIDER GUIDE

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Careers

before, high programming costs are cutting into profits, and lower-overhead cable channels and networks are threatening to overturn broadcasting’s dominance. The broadcast networks’ parent companies are responding to these challenges by hiring people who can boost ad sales and cut costs. In terms of programming, broadcast networks are taking on folks who have proven themselves at fledgling networks and channels. The heads of the major networks are also looking for new ways to generate revenue, such as demanding greater ownership of the programs they run, many of which are made by independent production companies. With a bigger share of the shows, networks can make more money selling them to affiliate stations. And executives are increasing the longevity

Industries

Poring over Nielsen ratings all day doesn’t sound so bad when you describe it to your dinner companions as analyzing the relative sex appeal of Jon Over time, sports leagues Stewart, Rachael Ray, and have become more businessMatt Lauer. minded, fueling the need for businesspeople to wheel and Trends deal and squeeze as much In Television money out of every sporting Although broadcast networks still yield the highest ratings and are generating more revenue than ever event as possible.

Introduction

Bottom line, though, is that even if your job doesn’t bring you into contact with the creative members of the industry, the glamour rubs off, lending an aura of excitement to mundane tasks that would be boring in any other field. Poring over Nielsen ratings all day doesn’t sound so bad when you describe it to your dinner companions as analyzing the relative sex appeal of Jon Stewart, Rachael Ray, and Matt Lauer.

Industries

Introduction

Industries and Careers for MBAs technologies. And directors who’ve had success in the action genre continue to command $100 million budgets. However, studios now often enter into joint-venture agreements with other studios to finance expensive films.

In Music When Seagram followed its $10.4 billion purchase of PolyGram in 1998 with the announcement that it would fire thousands of employees in a major restructuring, it initiated a trend among the major music groups (EMI, Sony BMG Music Entertainment, Universal Music Group, and Warner Music Group) toward making record label companies smaller and “smarter”—that is, focusing on a smaller number of “surefire” performers. Warner and EMI have been unable to find a dance partner; Warner Music Group made an offer for EMI in early 2007, but later in the year, decided not to pursue the deal. However, the music market is so tough right now that the executives and government regulators who nixed proposed mergers between the two companies may finally come to the conclusion that they can’t survive on their own. The industry doldrums, which began in 2001, continue to put a damper on hiring. To counteract the consumer spending slump, labels are trying to find new ways to bring in revenue. These include contracts that entitle them to a cut of an artist’s tour and merchandising revenue, and an increased emphasis on placing songs in films, television shows, and—the most lucrative of all—commercials. Legitimate music downloads and CDs packaged with bonus CDs, bonus DVDs, DualDisc-formatted CDs, computer-accessible content, and deluxe packaging also have helped the industry slow its downward spiral for the time being.

Careers

In Sports Over the past 20 or 30 years, the major trend in sports has been the tremendous growth in revenue, primed by televised broadcasting of games. This innovation led first to increased advertising sales, then to sponsorships, and then to stadium-naming rights. Player endorsements put a human (or superhuman) face on 42

W E T F E E T I N SIDER GUIDE

these sports marketing efforts. Over time, teams and leagues have become much more business-minded, and revenue has increased many times over. This transformation has fueled the need for businesspeople to wheel and deal—and squeeze as much money out of every sporting event as possible. Meanwhile, sports consumers (oops, make that “fans”) are becoming increasingly disillusioned with the transformation of sports into a moneymaking machine, one that has encouraged player hubris, corporate intrusion, and a general disregard for the public. A number of other trends point to possible difficulties ahead for the sports industry. The callous naming and renaming of stadiums and events has resulted in awkward and unwieldy names that have no resonance with fans. This could eventually erode fan interest and thus have a dramatic impact on revenue. Furthermore, some prominent athletes’ unsportsmanlike behavior (such as the use of illegal performance-enhancing drugs) could cause companies to start backing away from sometimes unpredictable individual athletes and focus on teams or events instead. Without that human connection, the sports marketing industry might take a hit. A bright spot is the increasing popularity of sports apart from the Big Four. The “action” sports, such as snowboarding, BMX, and NASCAR, have maintained fan interest and are growing—meaning more jobs.

How It Breaks Down Entertainment As we move into the digital age, it’s becoming more difficult to break down the industry cleanly into traditional categories. One reason for this is the proliferation of new forms of entertainment—CDROMs, the Internet, and the like. Another reason is that many film, television, and music companies have united to form entertainment conglomerates. While the landscape of the industry is changing, for the purposes of this profile we divide entertainment into three traditional categories: television, film, and music.

Most opportunities are in Los Angeles and New York, where the networks and major production companies are headquartered.

Sports The Big Four At the professional level, the Big Four spectator sports (baseball, basketball, football, and hockey) are the giants in terms of fan interest, media attention, and revenue. Over the years, these sports have evolved so that each now has one dominant governing body (Major League Baseball, the National Basketball Association, the National Football League, and the National Hockey League) reigning supreme. Originally, the main functions of these organizations were to create and enforce rules and policies governing owners, players, and referees; to impartially organize games between teams; and to maintain statistics and issue awards to winning teams and outstanding players. While those functions remain, the incredible growth of sports as a revenue engine has propelled the governing bodies to become full-fledged businesses that encompass marketing and PR, logo licensing, television rights licensing, and revenue distribution among teams. WETFEET INSIDER GUIDE 43

Careers

Film Before there was a television in every home, film was the medium that created a common national language. Taking weekend trips to the movie theater to view double and triple features, and the newsreels that ran between the films, was a way of life for people in the ’30s, ’40s, and ’50s. But television soon replaced the movies as the most popular entertainment medium. The movie industry for the most part remained stagnant until the release of Jaws in 1975. That film’s gross revenue—more than $260 million domestically—and sensational special effects

Music Technically, the recording industry got its start in the late 19th century with Thomas Edison’s phonograph and Emile Berliner’s gramophone. But the business of music really took off with the large-scale launch of a new technology in the 1920s: radio broadcasting. Today, the industry is dominated by large corporate music groups such as Sony BMG, Universal, and Warner. These companies produce most of the music in your local CD store’s racks and tend to take advantage of—either through acquisition or pressing and distribution deals—any upstart labels that do particularly well in the marketplace. The most recent round of consolidation in the music industry brought independent labels in “outsider” genres such as rap and alternative rock into the major-label fold.

Industries

If you prove you have the skills to thrive in a challenging and nontraditional work environment, you’re in for a thrilling ride.

reinvigorated and redefined the film industry. Film studios rushed to make blockbusters, which cost millions of dollars to produce but when successful could return more than $100 million in box-office grosses.

Introduction

Television Television is arguably the 20th century’s most significant—and most popular—technological development. In 1945, fewer than 7,000 television sets were in use in the U.S. Today, nearly every American household has a television, and two in three households have more than one. The number of channels and networks—and the number of jobs in television—has grown along with television’s popularity. But competition for jobs in this segment of the entertainment industry remains particularly stiff. At the entry level, this translates into poor compensation. And although executives are paid generously, job security is always an issue in television.

Industries and Careers for MBAs

Key Entertainment and Sports Companies

Industries

Introduction

Company

2006 Revenue ($M)

1-Yr. Change (%)

Employees

Time Warner

44,224

1.3

92,700

Walt Disney Co. (includes ABC, ESPN, and Walt Disney Studios)

34,285

7.3

133,000

Newscorp (includes Fox Entertainment Group, newspapers, magazines, and book publishers)

25,237

6.2

47,300

NBC Universal (1)

14,689

14.0

21,164

CBS

14,320

–1.5

23,654

Viacom (Includes Comedy Central, MTV, and Nickelodeon)

11,467

19.3

12,800

Turner Broadcasting System (1)

9,611

6.2

7,000

Liberty Media Corp

8,613

8.2

14,765

Clear Channel Communications

7,067

6.9

30,900

Sony Pictures Entertainment (1)

6,857

–5.7

4,200

National Football League (2)

6,000

9.1

450

Universal Music Group (1)

5,795

–14.9

1,234

Sony BMG Music Entertainment (1,2)

5,000

n/a

10,000

National Basketball Association

4,000

25.0

865

2,400

14.0

200

1,430

–17.1

1,440

National Hockey League Metro-Goldwyn-Mayer

(2)

(2)

(1)

(1) 2005 figures (2) Figures are estimates Sources: Hoover’s; WetFeet analysis

Careers

The Big Four also own and operate minor-league teams, which have their own governing bodies. Just like the collegiate teams do, minor-league teams provide many professionals with their entrée into the industry. Sports management The realization that companies would pay to be associated with the personality and achievements of pro golfer Arnold Palmer—and thereby increase their brand value—led Palmer’s financial manager 44

W E T F E E T I N SIDER GUIDE

and friend, Mark H. McCormack, to almost singlehandedly create the field of sports management (and the sports powerhouse IMG with it) in 1960. A talent agent in the entertainment industry usually focuses on finding lucrative projects for his or her clients and then negotiating the best possible deal, but the sports agent (or sports manager) will often take the process one step further. Naturally, he or she will solicit or review offers from teams and negotiate contracts, but the real money is made off of the court (or field, or ice), in the form of endorsements.

Key Jobs for MBAs Marketing and Promotion

Keep in mind that this could be the most competitive industry out there. Getting a job in sports or entertainment is a difficult undertaking that requires persistence, intense networking, and luck. Every year, thousands of job seekers flood New York and Los Angeles hoping to become celebrities, and the majority of them wind up waiting tables to make ends meet. If they decide to stick it out in show biz, many of them eventually end up taking jobs in production or administration. Take heart in the fact, though, that companies can’t ignore talent. If you prove you’ve got the skills to thrive in a challenging and nontraditional work environment, then you’re in for a thrilling ride. Careers in this industry usually start at the entry level; many agents, personal managers, and studio executives got their foot in the door as lowly assistants. Once launched on their careers, people in the entertainment industry tend to change jobs frequently, and contacts in the industry are crucial. For those with a business or technical background, work is more readily available. The big corporations that dominate the industry always need people in the standard management functions such as finance, HR, IT, marketing, and communications. Technicians are needed in traditional fields such as sound engineering and photography, and in the rapidly expanding fields of digital special effects. Dozens or perhaps hundreds of companies in Southern California and the San Francisco Bay Area employ software engineers and other specialists to create digital special effects, WETFEET INSIDER GUIDE

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Careers

These are perhaps the most transferable of all skill sets in the entertainment and sports worlds. Vast and constant infusions of market analysis, research, writing, graphics, and well-organized planning and distribution

Job Prospects

Industries

Sports marketing Sports marketing is a rather nebulous term for a number of activities in the sports world; pretty much every element of the sports industry is involved in marketing in one way or another. The powerhouses are the integrated sports management and marketing companies discussed in the previous section. At the league level, sports marketers help companies market various consumer goods and services by allowing their logos, events, and players to be tied to marketing and advertising campaigns. In addition to direct revenue, there is also an extended benefit when the goods and services being marketed fit in well with a league’s image. At the team level, sports marketers help the sales staff sell tickets and corporate sponsorships by building interest in the team through promotions, advertising, and game-day events that complement the game itself. They also help place the team name and logo on a variety of products— everything from caps to Coke cans—to maximize merchandising and sponsorship revenue and maintain a connection with fans. PR departments work with the media to get valuable coverage for games, players, promotional efforts, and human-interest stories, all of which enhance the team’s appeal to fans and, by extension, to corporate sponsors.

support every important sports event, hit song, new television show, and box-office gamble. Being an account executive or a marketing manager is also great training for whatever senior executive role you may ultimately want to play in one of these entertainment engines; the fuel they all run on is marketing and promotion. Learn how to do it effectively and you’ll always have work. Job opportunities in this area range from entry-level positions to senior executive slots, so the salary range is wide. Salary range: $30,000 to $125,000 or more

Introduction

At the top of the heap are integrated sports marketing and management companies like IMG. Big advertising firms have sought to diversify by either creating sports management concerns, as Interpublic did with Octagon, or purchasing them outright, as Clear Channel did with SFX Sports Group. Traditional talent agencies such as William Morris also have sports practices. These agencies represent the biggest, most recognizable athletes in a wide range of sports.

which are at the center of films like The Matrix, The Incredibles, the Lord of the Rings trilogy, and SpiderMan, and contribute unobtrusively to scores of other films, removing unwanted telephone cables from outdoor scenes and wrinkles from stars’ faces. Leading companies in this field include Pixar, Sony Pictures Imageworks, and Industrial Light & Magic.

Additional Resources Billboard (www.billboard.com) Careers in Entertainment & Sports (WetFeet Insider Guide, available from www.wetfeet.com) EntertainmentCareers.net (www.entertainmentcareers.net) The Hollywood Reporter (www.hollywoodreporter.com) Online Sports Career Center (www.onlinesports. com/pages/CareerCenter.html) Recording Industry Association of America (www.riaa.com) Showbizjobs.com (www.showbizjobs.com) Variety (www.variety.com) WorkInSports.com (www.workinsports.com)

Industries

Introduction

Industries and Careers for MBAs

Health Care Industry Overview The numbers don’t lie: Providing more than 13.5 million jobs and some of the fastest-growing occupations, health care is the country’s largest industry. Compared with other industries, health care as a whole is expected to realize a relative increase in the number of career opportunities across its many specialties. People are living longer, and as a result they demand more and higher-quality preventive and long-term care. The demand for health-care workers is expected to grow faster than the average rate for all occupations in the near future. In particular, the demand for home-care aides, registered nurses, physician’s assistants, nurse-practitioners, physical therapists, nontraditional health aides, and physicians will continue to increase at a solid pace. This trend also applies to technical and administrative jobs as hospitals continue to focus their energies on more efficient management and profitability.

Many people are attracted to the health-care industry for its human touch and service aspects, but the harsh reality is that the industry is all business.

Careers

Many people are attracted to the health-care industry for its human touch and service-oriented aspects. However, the harsh reality is that the industry as a whole is all business these days. Hospitals, nursing homes, home health-care companies, specialized clinics, and to some extent even organizations that 46

W E T F E E T I N SIDER GUIDE

Trends

A growing segment of the population is turning to a wider, more diverse set of techniques and therapies to meet health-care needs. The catchall category of alternative medicine refers to any practice outside of conventional medical treatments, including homeopathy, acupuncture, massage therapy, and chiropractic. The granddaddy of the movement is Dr. Andrew Weil, who preaches the benefits of treating a patient holistically, serving the body, mind, and spirit. Americans increasingly are turning to herbal remedies to treat ailments, spending more than $4 billion a year on herbs and other botanical remedies. Health-care providers and insurance companies are beginning to recognize the legitimacy of some of these alternatives, and to accept some nontraditional techniques for treating chronic health issues.

Doctors and hospitals have been grappling with rising costs for a long time—and each year the problem

Currently, some 47 million Americans have no health insurance—and that number is expanding like an

Hospitals and HMOs offer jobs in management in addition to medicine—and you might be a particularly good fit if you have a background in IT and data system development. epidemic. Why? Insurance premiums continue to skyrocket as health insurers consolidate their businesses through frequent mergers and acquisitions. The result of this trend is a continuing decline in competition among health insurers—and higher premiums are one of the results. Indeed, employers are facing doubledigit percentage increases in health premium costs each year. The effect is that more and more of the cost of health insurance is being passed on to employees, meaning many people simply can no longer afford health-care coverage—considered a necessity (in fact a birthright, many argue) in any industrialized nation.

WETFEET INSIDER GUIDE

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Runaway Costs

The Uninsured Nation

Industries

Alternative Medicine

seems to get worse. Malpractice insurance premiums, soaring prescription drug prices, and the rising number of uninsured Americans are all factors leading to everhigher costs for caregivers. At the same time, revenue for doctors and hospitals keeps falling as insurers do everything in their power to lower payments for claims. Meanwhile, insurers aren’t feeling the squeeze nearly as much as the caregivers are. The reason: They make sure that revenue from premiums rises at a faster rate than claims payments.

Introduction

provide alternative medical treatments are increasingly being run like any other major for-profit organization. The health-care industry provides diagnostic, healing, rehabilitation, and preventive services. The individual physician is often the consumer’s (patient’s) primary point of contact with the system. However, it is the health-care organization itself—that is, the hospital or health management organization (HMO)—that finances much of the industry today and represents the majority of the physician’s revenue. The lion’s share of this revenue comes from employee health insurance plans, Medicare (health insurance for Americans over 65), and Medicaid (health insurance for low-income Americans). Health-care organizations (with the exception of county hospitals) are generally run for profit. Doctors and other medical professionals are often obliged to prescribe the most cost-effective diagnostic tests and minimal treatment despite their desire to do more. Health-care organizations are driven to cut costs across the board.

Industries and Careers for MBAs

Key Health-Care Organizations Organization

Introduction

Centers for Medicare and Medicaid Services Blue Cross and Blue Shield Association

(1)

(1)

1-Yr. Change (%)

Employees

481,183

7.4

4,586

238,900

10.2

150,000

UnitedHealth Group

71,542

57.7

58,000

WellPoint

56,953

26.2

42,000

Medco Health Solutions

42,544

12.3

15,700

Caremark Rx

36,750

11.4

13,360

Kaiser Permanente (2)

31,000

11.1

148,884

HCA

25,477

4.2

186,000

Aetna

25,146

11.8

30,000

Humana

21,417

48.5

22,300

Express Scripts

17,660

8.6

11,300

CIGNA

16,547

–0.8

27,100

12,908.3

8.1

10,068

11,714

10.2

14,000

10,861

8.1

107,000

Health Net Health Care Service

Industries

2006 Revenue ($M)

Ascension Health Highmark

(2)

(2)

9,847

8.0

12,000

NewYork-Presbyterian Healthcare System

8,940

n/a

82,205

Tenet Healthcare

8,701

–9.5

68,952

7,733

17.0

10,250

4,969

0.6

43,000

(2)

Coventry Health Care Adventist Health System

(3)

(1) 2004 figures (2) 2005 figures (3) 2007 figures Sources: Hoover’s; WetFeet analysis

How It Breaks Down

Careers

Hospitals Despite the increased outsourcing (not uncommon in any industry today) of medical records, housekeeping, lab testing, and clinical services (such as orthopedics and radiology), hospitals remain the biggest employers in the health-care industry. The huge networks such as HCA and Tenet demand a steady supply of doctors, nurses, administrators, medical technicians, therapists, 48

W E T F E E T I N SIDER GUIDE

and other support staff. In areas where competition from HMOs is mounting and cost-cutting is a priority, former staff may move outside the immediate confines of a hospital. However, close and important links remain—particularly for any type of surgery or specialized treatment such as chemotherapy.

Home Care

HMOs and preferred provider organizations (PPOs) are both kinds of managed care providers: HMOs typically restrict your choices of primary- and specialty-care physicians and preventive services while PPOs (which tend to cost more) offer more flexibility. Some of the largest organizations have their own medical staffs and facilities where they treat patients; smaller organizations simply access networks of private providers and hospitals. Competition is fierce in this arena—mergers and acquisitions and internal strife often destabilize the job market. Coventry Health Care, Humana, Harvard Pilgrim Health Care, and PacifiCare Health Systems (one of the leading Medicare HMOs) are a few of the better-known players.

Advances in technology have done much to improve efficiency and reduce costs for both patients and home-care staff. Today, home-care nurses and aides can administer complex treatments—previously available only in hospitals and clinics—to the elderly and severely disabled in their own homes. And because almost all hospitals and HMOs now release patients before they’re self-sufficient, home care is often the most cost-effective choice. Most jobs in this sector don’t require much training (they’re closely supervised by RNs, NPs, or physicians)—just deep reserves of patience and kindness. The pay is low—often less than $10 an hour—and the work is arduous. The rewards? In addition to extremely flexible hours and plenty of personal contact with patients, there’s the satisfaction of helping people when they’re most in need.

Specialty Providers

Key Jobs for MBAs Health-Care Manager This is the job where an MBA comes in handy, and a background in cost-cutting, marketing, and information management will give you an edge over the competition. Lots of people want this job, and though industry observers predict that the number of managerial slots in hospitals and HMOs will shrink to perhaps half the current number, the need for qualified executive staff in home health care, nursing homes, and clinics is expected to more than make up the difference. Salary range: $55,000 and up. An experienced managers with an impressive track record in meeting and maintaining strict budgets can earn well into the six-figure range.

Industries

As hospitals have attempted to cut costs, they’ve turned to companies that can provide specialized services at rock-bottom prices. These include everything from nursing homes (Beverly Enterprises) to home infusiontherapy providers (Apria Healthcare) to diabetes treatment providers (American Healthways). Clinics that focus on special treatments such as chemotherapy, MRI and other scanning techniques, and physical therapy also are proliferating. Most are small and locally run; however, Gambro and Fresenius Medical Care are two enormous service companies that focus on this type of care; others will undoubtedly emerge as their popularity increases.

Introduction

HMOs and PPOs

Careers WETFEET INSIDER GUIDE 49

Industries and Careers for MBAs

Opportunities will also grow at a good clip for just about every health-care worker, including doctors, occupational therapists, audiologists, medical record technologists, medical transcriptionists, and speech pathologists. The highest demand will be for physician’s assistants, physical therapists, lab clinicians, dental hygienists, respiratory technicians, substance abuse counselors, and especially home health-care workers. Hospitals and HMOs offer jobs in management in addition to medicine—and you might be a particularly good fit if you have a background in IT and data system development. As a job seeker, you should be aware that HMOs have been the catalysts for many of the efficient business practices adopted throughout the health-care industry in recent years. Technical and administrative support positions are in high demand as the industry evolves in an intensely competitive market. Health-care IT is a steadily growing sector; although the industry was a late adopter of IT, it’s now catching up. There will be lots of opportunity in this area for the tech-savvy.

Additional Resources Agency for Healthcare Research and Quality (www.ahcpr.gov) American Medical Association (www.ama-assn.org) Careers in Health Care (WetFeet Insider Guide, available from www.wetfeet.com) HealthCareerWeb.com (www.healthcareerweb.com) National Center for Health Statistics (www.cdc.gov/nchs) The Osteopathic Home Page (www.osteohome.com)

Careers

Industries

Introduction

Job Prospects

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Insurance Industry Overview In the simplest terms, insurance is the transfer of risk from the insured to the insurer in exchange for a premium. In other words, insurance equals peace of mind. In exchange for a payment or payments to the insurer, the insured knows that, should some unpredictable ill befall him or his property, the insurer will be responsible for resolving some or all of the problem (depending on the terms of the insurance agreement). For example, a purchaser of health insurance knows that her health insurance plan will be there to pay for her treatment should she get sick; that her property and auto insurance carriers will pay for repairs should her house be damaged by fire, or replacement should her car be stolen; and that her life insurance carrier will provide her family with the money it needs to live on should she die unexpectedly. While what happens to the individual insurance customer or to his property is unpredictable—after all, you never know when someone’s going to fall ill, or get into a car accident—the insurer stakes its viability on its ability to predict, on a macro level, losses that will be incurred. Typically an insurer covers many policyholders for a given kind of loss, and so is able to predict what its costs to cover those policyholders’ losses will be over time. Insurance companies make a profit by charging more in premiums than they predict they will have to pay out over time for losses. Insurance is big, big business. Some 1,800 U.S. insurance companies offer personal and commercial product lines, including basic health/life and property/casualty protection, as well as a long list of other coverage ranging from automobile policies to mortgages to insurance for insurance companies (known as “reinsurance”). These products protect customers from losses resulting from illegal actions, medical needs, theft, earthquakes and hurricanes, and a variety of other causes. Covering policyholders’ losses is only the beginning of what goes on at insurance companies. For example,

Health-Care Crisis With baby boomers entering retirement age, the U.S. health-care system is in deep, deep trouble. People are living longer these days, resulting in increased demand for health-care services. In order to maintain profit levels, health insurers have taken to charging more and more in return for less and less. For instance, many diseases that used to be covered by health plans aren’t anymore, and health-care premiums and deductibles for services that are still offered are skyrocketing. This is bad news for everyone except insurers. It’s also not tenable over the long haul: As the U.S. health-care crisis escalates, there’s sure to be greater demand for health-care reform, and possibly even—egad!—the institution of a national health-care system of some sort (beyond Medicare and Medicaid, which serve the elderly and the indigent). Health insurers are among those spending millions on lobbying and PR efforts to sway public opinion and government policy to allow them to continue to rake in profits, but at some point, many experts suggest, the you-know-what is going to hit the fan.

Industries

Insurance is big, big business. Some 1,800 U.S. insurance companies offer personal and commercial product lines, including basic health/life and property/casualty protection, as well as a long list of other coverage options.

An estimated 200,000 people in Louisiana alone (Katrina also had a devastating effect in Mississippi) have lost or will lose their employer-sponsored health insurance as companies in the region cut spending, lay off employees, or go out of business altogether. All this just a year after hurricanes Charley, Francis, and Ivan caused some $22 billion in insured damage in 2004.

Introduction

they mount huge marketing campaigns to convince customers that they need protection in general and the company’s products in particular. They also function as financiers, deriving a large part of their revenue from investments. Insurance companies must maintain great reserves of capital to back up potential claims obligations. They invest those reserves in stocks, bonds, and real estate, within the U.S. and overseas, providing an enormous amount of liquidity to financial markets, and giving the industry an influence on the national economy far out of proportion to its size. That can be a risk, as when industry-wide overinvestment in Latin America during the 1970s led to huge losses for the entire industry and repercussions well beyond the insurance industry itself.

Legal Woes

Trends

Hurricane Katrina

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Careers

Hurricane Katrina continues to affect the insurance industry nearly two years after hitting the Gulf Coast in what was the nation’s biggest, costliest natural disaster. Estimates as to how much it’s going to cost to rebuild the affected area have exceeded $100 billion— and an estimated $60 billion of that is being paid out by insurers. One result of Katrina’s costs has been an increase in property insurance rates. Another result:

Among the biggest news in the insurance industry in recent times was the civil lawsuit filed by former New York Attorney General (now governor) Eliot Spitzer against Marsh & McLennan, accusing that firm of rigging bids and preferentially treating companies that paid it special fees; in 2005, Marsh settled the suit for $850 million. Then, in 2006 AIG settled charges that it had engaged in price-fixing and accounting chicanery—to the tune of $1.6 billion. Those scandals tarnished the industry, according to some observers.

Industries

Introduction

Industries and Careers for MBAs How It Breaks Down

Reinsurance

Life and Health Insurance

Reinsurance is the insurance of insurance companies. Insurance companies pay reinsurers to assume some or all of the risk the insurers have taken on in writing policies for their clients. Insurers use reinsurance to protect against the risk of unusual losses. Reinsurers write reinsurance because their business allows them to pool enormous numbers of individual insurance risks, making their risks even more predictable than the risks faced by primary insurers.

The policies in this sector provide benefits packages that policyholders pay a premium to enjoy. Health insurance has gone through some major overhauls, including the replacement of fixed-fee Blue Cross/Blue Shield–inspired policies with managed-care networks. The life insurance business is experiencing slow growth, and life insurance companies are likely to be merging with banks and securities firms. Hartford, Prudential, and MetLife are U.S. leaders in the life insurance game, while Aetna and CIGNA rule the HMO realm.

Insurance adjusters won’t be replaced by technology— face-to-face interaction is key here—so expect solid employment growth.

Property and Casualty Insurance The focus in this sector is on protection for owners of cars, homes, and businesses from loss, damage, and injury. Competition is fierce in this sector, and profits are falling. Only the strong will survive as weaker companies continue to tank and even more secure ones sell off this line.

Careers

Insurance Brokers Brokers act as go-betweens, uniting buyers and sellers of insurance and creating the contracts that bind them. Furthermore, they play the role of risk consultants for large clients, researching industry information to advise companies on how to manage risk exposure. Major players include Aon and Marsh & McLennan.

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Key Jobs for MBAs Actuary Do you like to play the odds, or do you prefer to set them? As an actuary, your job will be to predict the risks to insure people, property, and businesses. Mathematics and statistics will help you make those decisions. You’ll also need to know general social trends and laws that affect risk. Most actuaries have college degrees, and many have advanced degrees. Salary range: $40,000 to $125,000 or more

Risk Manager Large corporations such as Intel and Procter & Gamble hire risk managers to help them figure out how to save money. Risk managers advise upper management on the best type of insurance to buy, or on how the workplace can be made safer. They also help manage employee benefit plans. Most risk managers have advanced degrees or several years of work experience. Salary range: $70,000 to $105,000 to start

Job Prospects The insurance industry enjoys more demand for its products today than ever before. As the U.S. population grows and baby boomers reach old age, the market for health insurance, auto insurance, and homeowners insurance will be especially robust. However, ongoing consolidation and technology advances make it unlikely that job opportunities in many functional areas will grow at a strong rate in the insurance industry. The U.S. Bureau of Labor Statistics

Key Insurance Companies Company

2006 Revenue ($M)

Blue Cross and Blue Shield Association

1-Yr. Change (%)

Employees

10.2

150,000

163,188

25.0

118,243

Allianz

126,788

9.6

177,625

American International Group (2)

113,194

3.9

106,000

AXA (2,3)

104,007

22.5

78,800

71,542

57.7

58,000

65,103

20.8

13,544

(2,3)

UnitedHealth Group AEGON (3) State Farm Mutual Automobile Insurance

60,000

2.0

79,200

WellPoint

56,953

26.2

42,000

MetLife

48,396

8.1

47,000

Allstate

35,796

1.2

37,900

(1)

32,488

2.5

39,814

The Hartford Financial Services Group

26,500

–2.2

31,000

Aetna

25,146

11.8

30,000

The Travelers Companies

25,090

3.0

32,800

Manulife Financial

24,637

2.4

20,000 (1)

Northwestern Mutual Life Insurance

19,733

7.2

4,600

Massachusetts Mutual Life Insurance

18,020

3.4

27,000

New York Life Insurance (1)

17,505

1.0

12,100

Swiss Reinsurance

13,185

–50.4

10,891

(3)

Industries

Prudential Financial

Introduction

238,900

ING Groep (2,3)

(1)

(1) 2005 figure(s) (2) Highly diversified company; figures include departments that operate in other industries (3) Foreign company; figures reflect worldwide sales and employment (1) 2004 figures; (4) 2005 figures Sources: Hoover’s; WetFeet analysis

increasing role of technology in the industry. However, job opportunities in some functional roles in the industry are expected to grow. For example, adjusters won’t be replaced by technology— face-to-face interaction with the customer is key to this job function—so expect to see solid employment growth here. And agents who can sell a variety of types of insurance or financial services will face much better prospects than traditional insurance agents. WETFEET INSIDER GUIDE

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Careers

projects 8-percent growth between 2002 and 2012— half of the 16-percent growth average projected for all industries combined. When companies merge, redundant positions tend to be eliminated. And as interactions with insurance clients (as well as internal business processes) become increasingly automated, there will be less demand for employees in the roles the new technologies have replaced; insurance agents and underwriters are expected to be the most negatively affected by the

Industries and Careers for MBAs

A.M. Best (www.ambest.com) American Academy of Actuaries (www.actuary.org) GreatInsuranceJobs.com (www.greatinsurancejobs.com) Insurance Industry Internet Network (www.iiin.com) InsuranceWorkforce.com (www.insuranceworkforce.com) Property and Casualty.com (www.propertyandcasualty.com) Risk and Insurance Management Society (www.rims.org)

Careers

Industries

Introduction

Additional Resources

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W E T F E E T I N SIDER GUIDE

Internet and New Media Industry Overview The number of Internet users 15 and older worldwide is nearly 700 million, roughly 15 percent of the total population in this age group. Usage has more than tripled since the late 1990s. Global online retail revenue increased by more than a fifth from 2004 to 2006, amounting to more than $140 billion. Despite what doomsayers claimed when the dotcom bubble burst in the early 2000s, the Internet clearly is here to stay. Today, companies are using the Net to sell products, publish newspaper- and magazine-style publications, offer services such as travel bookings and portfolio management, provide search engines, recruit employees, build brands, and develop online gaming networks—and that’s just the tip of the iceberg. Add to this all the companies that underpin and service these and other endeavors—the online ad agencies, Internet service providers (ISPs), Web service companies, and management consultancies—and you get a sense of just how broad this industry is. Back in 2001, precipitous declines in advertising revenues washed out many pure-play Internet companies and convinced some old-economy companies to scale back their Web operations, leaving tens of thousands of people out of work. Those companies that remained have grown smarter about how to make money using the Web. And ad revenues are growing. Indeed, in 2006 more than 80 percent of advertisers used Internet advertising as part of their ad strategy—and Internet advertising, which accounted for 5 percent of all advertising in 2005, is projected to grow to 10 percent by 2010. Far from being a mature industry, the Internet remains a space of opportunity. Convergence (the coming together of various technologies, such as in a cell phone that also serves as a game platform, a GPS receiver, and an Internet-access device) and the human

imagination will continue to create opportunities for holdover companies from the dotcom boom and newcomers alike.

Wireless Connectivity Increasingly, Web surfers are accessing the Internet via wireless devices, be they Wi-Fi- or Bluetoothenabled computers, cell phones, or PDAs. Techsavvy municipalities such as San Francisco and Philadelphia are toying with the idea of blanketing their neighborhoods with wireless hot spots, in effect making wireless Internet access possible anywhere within their geographic confines. Access to the Internet is, in fits and starts, becoming an anywhere, anytime proposition; what was the province of science fiction writers and futurists a generation ago is inching closer and closer to becoming a reality. In response, Internet companies are recognizing that they need to optimize the content and functionality they offer Web surfers using wireless devices.

Video The broadband revolution that many industry observers were hoping for back in the 1990s looks like it may finally be arriving. A growing number of Internet users are accessing the Web via broadband connections, meaning more complex website content and functionality is becoming the norm. These days, one of the most rapidly growing content areas on the Web is video—it’s actually becoming as readily available and easy to access and share online as music files have been since the early days of Napster. Already, you can download episodes of current TV shows via Apple’s iTunes store—which you can then view not just on your PC, but also on devices like video iPods and next-generation cell phones. Meanwhile, vlogs—video blogs, which offer users video clips for download—are gaining in popularity, as are “personal video sharing service” sites such as You Tube. Look for an increasing use of video technology and content in the coming months and years.

Industries

The Internet remains a space of opportunity; convergence and the human imagination will continue to create opportunities.

Introduction

Trends

of user-centric websites and Web activity, including blogs, online communities, syndication systems (by which Web surfers can subscribe to various websites, meaning they receive notice whenever those sites are updated with new content), user-created content tags for more personalized searching, and software that’s accessed over the Web rather than being installed on the user’s system. While there isn’t much agreement on the term’s precise definition, its use underscores that major changes are taking place in terms of how people use the Internet.

How It Breaks Down Web 2.0

Publishers Online publications make money by selling advertising or subscriptions or both. Many players in this field are online ventures of already established media WETFEET INSIDER GUIDE

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Careers

Lots of people are using the phrase “Web 2.0” these days. Some companies are using it more as a marketing buzzword to indicate that what they’re doing online is distinct from what many now-failed dotcom companies were up to, in terms of their business models, back in the 1990s. Other folks are using the phrase to describe new and evolving kinds

This industry resists classification. The following breakdown is not a definitive taxonomy but rather a chance for the uninitiated to make some sense of a rapidly changing landscape.

Introduction

Industries and Careers for MBAs brands. Some examples include The Wall Street Journal Interactive Edition, a subscription-based electronic version of the leading business newspaper; and ESPN. com, an extension of the sports cable channel. There are also a number of important players whose primary presence is online, such as CNET and Salon. And hundreds of daily newspapers that put all or part of their content on websites are still exploring the differences between reporting for print and for the Web.

Vendors

Industries

Vendors make money by selling goods or services. The best-known online retailer is Amazon.com. Mail-order companies with websites—Lands’ End, for example— fall into this category. Other sellers provide services: ETrade and Charles Schwab act as stockbrokers, Expedia serves as a travel agent, and Autobytel facilitates car shopping. Still others work in the business-tobusiness space; Ariba, for instance, creates customized business-to-business online auctions for large buyers of industrial parts, raw materials, and commodities.

Demand for employees is no longer sky-high in the Internet sector, but jobs are out there— just be prepared to face tough competition.

Careers

Aggregators and Portals Some of the busiest sites on the Web fall into this category. Search engines are “aggregators” (so named because they offer a huge aggregation of links to other websites). Portals (also referred to as “gateways” or “start pages”) are sites that serve as home base for Web surfers. The home page of AOL, for example, is designed as an Internet portal. In a move that typifies the fluidity and opportunism of this industry, the 56

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leading search engines, such as Yahoo, have positioned themselves as gateways, and vice versa. Meanwhile, so-called “freestanding search engines like the insanely popular Google have favored optimal search performance over the glitz and glam of gateways. All these sites make money from banner advertising (essentially billboards on your computer screen) or, increasingly, through alliances with companies that pay fees to be the gateway or aggregator’s “preferred provider” of travel services, greeting cards, and so on, or to turn up in highlighted sections of keywordsearch results pages. A kind of hybrid site is growing in popularity as well: the shopping-comparison site, such as Shopping. com or Froogle. Consumers do a search for a certain product—say, “digital camera”—and the shoppingcomparison site displays various e-tailers’ digital camera offerings, prices, and so on, and links users to the e-tailers’ sites they’re interested in visiting.

Communities Online communities serve as centers for people who share special interests. MySpace and Facebook, for instance, provide virtual real estate for people looking for dates or friends. Other examples of community sites include The Motley Fool, for small investors; BabyCenter, for parents; iVillage, for women; and PlanetOut, for the LGBT (lesbian, gay, bisexual, and transgender) community. All these sites encourage users to register by offering access to chat, newsletters, and message boards; some offer members the opportunity to construct Web pages, which then reside on the community’s site and serve as a draw for more members. Like many other Internet concerns, these sites used to make money primarily from advertising and alliances, but are now trying to pump up revenue streams such as e-commerce and subscriptions.

Consulting and Support This category encompasses all the companies that have sprung up to support and provide services to the Internet and new-media industries. The ISP world has consolidated quite a bit in recent years; many

smaller companies have been bought and combined into national companies. Most of the major telephone and cable companies are competing as ISPs as well; companies such as AT&T and Comcast provide the

latest in high-speed DSL and cable Internet connections. This segment also includes a variety of consulting firms and interactive agencies that help develop websites, providing services including online Introduction

Key Internet and New-Media Companies Company

1-Yr. Change (%)

Employees

Amazon.com

10,711

26.2

13,900

Google

10,605

72.8

10,674

AOL (1)

8,283

-–4.7

15,124

Yahoo

6,426

22.2

11,400

eBay

5,970

31.1

13,200

E-Trade Financial (2)

2,420

-–4.6

4,100

MSN

2,298

1.1

n/a

Expedia

2,238

5.6

6,600

TD Ameritrade

2,139

86.9

3,947

1,301.3

–0.9

2,210

Priceline.com

1,123

16.7

696

Monster Worldwide

1,117

13.1

4,900

Netflix

997

46.1

1,300

Overstock.com

788

–1.9

864

1-800-Flowers.com

782

16.6

3,700

Barnesandnoble.com

433

–0.1

39,000 (3)

Drugstore.com

416

4.1

732

CNET Networks

387

9.4

2,620

IAC Search & Media (1,4)

350

33.9

505

Match.com

311

24.7

250

Earthlink

Industries

2006 Revenue ($M)

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Careers

(1) 2005 figures (2) Highly diversified company; figures include departments that operate in other industries (3) Full- and part-time (4) Financial data not released; figures are estimates (4) Full- and part-time. Sources: Hoover’s; WetFeet analysis

Industries and Careers for MBAs

Introduction

advertising, e-commerce development, user-interface design, and management and strategic consulting specialized for Web companies.

Key Jobs for MBAs Product Manager This job involves managing a team of people and working to determine the look and feel, functionality, brand image, and overall strategy for a Web or multimedia product. It demands a combination of technical expertise (or at least the ability to understand how various Web and new-media technologies work), finesse in managing people, and business and marketing savvy. It also requires a flexible person who’s quick on the uptake and can turn on a dime (exactly as the market frequently does). Salary range: $70,000 to $180,000

Industries

Project Manager The project manager acts to keep the various pieces of a multimedia puzzle, such as a website in place. This means making sure that creative, technical, and business staff are all in sync. A project manager usually has substantial experience on the business or design side of things. Salary range: $60,000 to $95,000

Marketing Associate or Director

Careers

In these positions, you’ll conceive and execute advertising campaigns in the virtual and physical worlds. You’ll also build a site’s brand. Marketing titles tend to vary, but the general idea is to drive people to a company’s website, and then make money by selling products or subscriptions or whatever else the site sells. A college degree and good communication skills should be enough to land you a job in online marketing. Any previous marketing experience is helpful. An MBA will help you land a top job. Salary range: $30,000 to $90,000

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Business Development Associate or Director Alliances and partnerships among sites are one of the driving features of online business. Business development people identify possible partners, then negotiate and close deals, and maintain relationships. MBAs tend to fit well in business development. Salary range: $40,000 to $95,000

Job Prospects In the late 1990s, a slew of vibrant, thriving Internet startups were making their way up in the business world—and hiring tons of job seekers in the process. Then the bubble burst. Most of those startups have disappeared, and those that are still around have cut back on staff—way back. Demand for employees is no longer sky-high in the Internet sector, but jobs are out there. You’ll face tough competition in getting one. Business development, marketing, content production, and operations all offer a modest number of new opportunities each year. Likewise, programmers in the industry face only average job growth. For one thing, a lot of software can now write simple code itself, eliminating some need for programmers. Also, more and more programming and other IT work continues to be farmed out to cheaper overseas workers. On the other hand, Internet companies still need good database administrators, software engineers, and other techies, and that need will only increase as systems get bigger and more complex. Software engineering, systems administration, database administration, and systems analysis—all careers that can be found within the Internet sector—are considered by the Bureau of Labor Statistics to be among the fastest -growing career fields in the U.S.

Additional Resources Internet.com (www.internet.com) Red Herring (www.redherring.com) The Industry Standard (www.thestandard.com) Wired News (www.wired.com)

Investment Banking

Trends Hedge Funds

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Possibly the biggest story in the markets of late has been the hedge fund boom. A decade or so ago, hedge funds were known for being relatively conservative investments; typically, they involved hedging investments (for instance, short-selling baskets of stocks representing the entire stock market, while

Industries

Investment banks (“I-banks” for short) are experts at calculating what a business is worth, usually for one of two purposes: to price a securities offering, or to set the value of a merger or acquisition. Securities include stocks and bonds, and a stock offering may be an initial public offering (IPO) or any subsequent (or secondary) offering. In both cases, I-banks charge hefty fees for this valuation service along with other kinds of financial and business advice. When banks underwrite stock or bond issues, they ensure that institutional investors, such as mutual funds or pension funds, commit to purchasing the issue of stocks or bonds before they actually hit the market. In this sense, I-banks are intermediaries between the issuers of securities and the investing public. I-banks make markets to facilitate securities trading by buying and selling securities out of their own account and profiting from the spread between the bid and the ask price. In addition, many I-banks offer retail brokerage (meaning the customers are individual investors rather than institutional investors) and asset management services. Not surprisingly, the center of this industry rests in the lofty aeries above Wall Street and Midtown in New York City. Other hot spots include London, San Francisco, and the Silicon Valley. Firms also compete in Frankfurt, Hong Kong, Tokyo, and other foreign markets 24 hours a day.

Introduction

Industry Overview

buying individual stocks that seemed they were going to outperform the market as a whole). This way, the thinking went, the funds would do okay whether the broader market rose or fell. More recently, though, hedge funds have become much more aggressive in nature; they’ve vastly outperformed other forms of investments, often by investing in more speculative investments as well as complex financial derivatives. Both the number of hedge funds in existence (estimates of the total number vary from 8,000 to 9,000) and the amount of money invested by hedge funds (in excess of $1 trillion) have skyrocketed in the past five years. Today, hedge funds account for a major portion of the business of many investment banks. Hoping to cash in on a good thing, the banks have created their own hedge fund arms. At the same time, many banks have taken to catering to outside hedge funds, which do a lot of trading, by offering them “prime brokerage” services comprising trading and financing services. So far, this has been nothing but good for the banks; their hedge fund arms have generated outsized returns, while their prime brokerage operations have exploded as more and more hedge funds enter the marketplace. But some observers (most of whom point to the havoc caused in the marketplace by the collapse of the Long-Term Capital Management hedge fund in the late 1990s) believe that investment banks are taking on too much risk by relying so heavily on hedge funds to generate ever-higher percentages of their revenue. Today’s hedge funds, they say, are under-regulated, risky propositions. How risky no one knows, thanks to many hedge funds’ propensity for secrecy, as well as the complexity of many of the derivative instruments they invest in, which some say even the hedge funds don’t understand fully. These observers ask: What if there’s another Long-Term Capital Management—or worse? The answer, of course, would be a lot of pain for those banks serving hedge funds, or running their own hedge funds. Some observers have suggested that the funds should be more closely regulated. Meanwhile, though, the cash has continued to roll in.

Industries

Introduction

Industries and Careers for MBAs Globalization

Boutiques and Regional Firms

Markets are becoming more global with each passing year. The sustained rise in energy prices, for example, is due more to demand from emerging financial powers like China and India than to demand in the U.S. or Europe. Increasingly, investors are looking to put money into securities and other investments originating in countries other than their own. I-banking business is coming from new regions of the globe; in recent years, for instance, some of the largest IPOs in the world have been of shares of Chinese companies, including the Bank of China, China Construction Bank, and China Life Insurance. Cross-border mergers and acquisitions are becoming more and more commonplace. A couple of years ago, the NASDAQ stock market made a bid to buy the London Stock Exchange. In response to the rapid pace of globalization, banks are expanding their focus—and launching operations and forming partnerships— around the world. What does this mean for I-banking job seekers? To be prepared for your interviews, you should understand what’s happening in global as well as local markets. And if you have the opportunity to get some international experience, it certainly won’t hurt your desirability among employers in the future.

Boutiques are niche firms that focus on a specific industry, such as technology, or financing vehicle, such as municipal bonds. Regionals, as the name implies, focus on financing and investment services in a particular geographic region. These labels are still used, but as the rapid pace of mergers and acquisitions continues to alter the landscape, the traditional categories are becoming less meaningful. Big commercial banks that have acquired investment banks are bringing large amounts of capital to the playing field—along with a mix of financial services more varied than ever before.

How It Breaks Down

Careers

The Bulge Bracket There’s no clear and uniformly accepted definition of this group, but basically it includes the largest of the full-service investment banks. This is the group that matters most in investment banking, and its members’ names confer distinction—whether a startup with an IPO to sell, a Fortune 500 company planning an acquisition, or a job seeker sending out resumes. Citigroup Global Markets, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley hold top spots in this bracket, at least for the moment. Other major players include Bear Stearns, Deutsche Bank, JPMorgan Chase, and UBS.

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Key Jobs for MBAs

Jobs in investment banks are divided into four areas: corporate finance, sales, trading, and research. Shifting from one area to another isn’t unheard of, but since doing your time and moving up the ranks in one area is the quickest way to make a lot of money, most people stay put.

Corporate Finance Think of corporate finance as financial consulting to businesses. Specific activities range from underwriting the sale of equity or debt for a corporate client to providing advice on mergers and acquisitions, foreign exchange, economic and market trends, and specific financial strategies. When most people refer to investment banking, this is what they mean. MBAs are brought in at the associate level, where they help underwrite equity (stocks) and fixed-income (bond) offerings, write sections of pitch books, sit in on client meetings—mostly taking notes—and help devise financial strategies. They also supervise teams of analysts. After three or four years, they move up to vice president; after another three to five years, they make it to managing director. Salary range: $95,000 to $110,000, including bonuses, for associates; $200,000 to $300,000 or more, including bonuses, for VPs

Sales

into transactions for your clients. These jobs are usually much less hierarchical than on the banking side; your sales volume and asset growth are what matter. Salary range: $65,000 to $85,000, with a signing bonus. Year-end bonuses fluctuate; if it’s been a good year in the market, they can be as high as 80 to 100 percent of base pay.

Key Investment Banks Company

2006 Revenue ($M)

1-Yr. Change (%)

Employees

21.8

337,000

Bank of America (Global Capital Markets and Investment Banking (1)

117,017

39.3

203,425

UBS (1)

105,753

38.6

78,986

Deutsche Bank (1)

101,183

39.3

68,849

JP Morgan Chase (1)

99,845

25.0

174,360

Morgan Stanley (1)

76,551

47.0

55,310

Merrill Lynch (1)

70,591

47.7

56,200

Goldman Sachs

69,353

59.8

26,467

Credit Suisse Group

67,532

–1.3

44,871

Lehman Brothers

46,709

44.0

25,900

Nomura Holdings

17,601

15.3

14,688

Bear Stearns Companies

16,551

43.3

13,566

Bank of Montreal BMO Financial Group

16,198

25.2

33,785

Capitalia (2)

9,021

–8.9

27,854

Daiwa Securities Group

7,192

48.9

12,303

Legg Mason (3)

4,344

64.2

4,030

The Jones Financial Companies

3,462

8.5

34,300

A.G. Edwards (3)

3,126

13.6

15,338

Raymond James Financial

2,633

22.1

1,004

(1) 5 FFigures include all divisions of multi-faceted company (2) 2005 figures; (3) 2007 figures Sources: Company websites; SEC filings; Hoover’s; WetFeet analysis

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Careers

146,558

Industries

Citigroup Corporate & Investment Bank (1)

Introduction

Some firms hire only MBAs for sales jobs. Other firms don’t even ask about your education. In either case, the bottom line is how well you can sell the new debt and equity issues CorpFin unloads on your desk—and how quickly you can translate news events or a market shift

Introduction

Industries and Careers for MBAs Trading

Job Prospects

When Hollywood directors want to portray the rough, unruly underside of Wall Street, they wheel the cameras onto a trading floor. This is as close to the money as you can get. Trading also commands respect because it’s tougher, riskier, and more intense than any other job in finance. Traders manage the firm’s risk and make markets by setting the prices—based on supply and demand—for the securities CorpFin has underwritten. As in sales, but more so, you’re tied to your desk and phones while the markets are open— but you get to leave after the closing bell. Beginners fetch endless takeout food and run other thankless errands; more seasoned traders scream and yell when their markets heat up and do the crossword puzzle the rest of the time. This isn’t a career for the genteel or faint of heart. A few traders even grow up to be CEOs, because they know more about the markets and money than anyone else in banking. Salary range: Similar to that in sales

As the global economic climate cooled down following the swoon of the early 2000s, so did I-banking performance. The big banks found themselves tremendously overstaffed, having hired new employees like gangbusters in the boom years of the 1990s. As a result, investment banks laid off tens of thousands of employees. But the hiring market in 2006 and through the beginning of 2007 has been strong again. The economy has added jobs. The stock market has been up. Businesses have increased their spending. More companies are going public. More companies are spending money to acquire other companies. Emerging markets such as China promise vast new banking opportunities. Industry leader Goldman Sachs’ revenues and profits reached record highs in 2006. Goldman and other investment banks should continue to see revenues climb in the near future. One result is that all those banks that laid off employees when the markets tumbled have been hiring. And because it’s cheaper to employ a recent grad than someone with more experience, there are a growing number of jobs to be had for the cream of the crop from the best business schools. Keep in mind that those who do I-banking internships will have the best shot at full-time openings.

Careers

Industries

Research Research departments are generally divided into fixed income (debt) and equity. Both do quantitative research (corporate financing strategies, product development, and pricing models), economic research (forecasts for U.S. and international markets, interest rates, and currencies), and individual company coverage. An equity analyst usually focuses on a particular sector, such as software, oil and gas, or health care. You move up in this profession by consistently predicting the movement of specific company stocks. The best analysts are ranked annually by Institutional Investor magazine. Their buy, sell, and hold recommendations wield enormous clout, and competition among firms for the top analysts can be intense. Salary range: For the lucky few who are hired, starting salaries and signing bonuses are often slightly higher than those in other areas of investment banking. Senior analysts earn six figures and up (way up). Their bonuses and periodic raises are closely tied to the accuracy of their quarterly earnings projections. 62

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Additional Resources Beat the Street® I: Investment Banking Interviews (WetFeet Insider Guide, available from www.wetfeet. com) Careers in Investment Banking (WetFeet Insider Guide, available from www.wetfeet.com) Institutional Investor (www.institutionalinvestor.com) Investor’s Business Daily (www.investors.com) Killer Investment Banking Resumes! (WetFeet Insider Guide, available from www.wetfeet.com) Knowledge@Wharton: Finance and Investment (http://knowledge.wharton.upenn.edu/category. cfm?cid=1) The McKinsey Quarterly: Financial Services

Mutual Funds and Brokerage Industry Overview

Trends Commissions to Fees The retail brokerage industry is weaning itself from its traditional reliance on trade-based commissions by offering more fee-based services, which provide a steadier revenue stream in a volatile market. The fee structure also helps insulate firms from seeming conflicts of interest, as the fee is usually a percentage of assets under management, which means that it’s in everyone’s interest to see those assets increase. Fees represent a growing slice of the industry’s top-line income: At the beginning of the decade, fees accounted for less than 10 percent of revenue; one industry observer expects that fees could account for more than 70 percent of revenue by the end of the decade.

Industries

More people invest in securities today than ever before. There more investments to choose from, and more ways to invest. Careers

When a large amount of money is needed for any enterprise, from building a factory to funding a corporation to drilling wells in a new oil field, that money is raised from investors—usually a large number of them. Typically, the enterprise raises that money by either selling ownership shares in itself or simply borrowing it. When ownership is sold, the investor receives shares of stock. When money is borrowed, the investor receives bonds. Stocks and bonds are both securities. Investors buy and sell individual securities through brokers, also called securities dealers. In addition, mutual fund companies and other asset management firms create funds, which consist of a variety of securities. The asset management company buys and sells the securities in a fund, seeking to maximize its value, and it sells shares in these funds to investors directly and through securities brokers. The mutual fund company charges a fee for picking the securities in a fund. In turn, the shareholder is shielded from the risk of investing in individual securities. More people invest in securities today than ever before, and they have more choices. Not only are there more investments to choose from, including stocks, bonds, real estate trusts, limited partnerships, and an ever-growing diversity of mutual funds, but there are also more ways to invest: full-service brokerages, discount brokerages, and electronic trading for most

of us; and exclusive opportunities such as hedge funds and venture capital funds for high-net-worth individuals, and for institutional investors, such as pension funds, insurance companies, and university endowments. There’s an unimaginably large amount of money chasing investments these days, which is part of the reason the stock market rose so steeply during the 1990s. Brokerages and mutual funds are the two primary means by which all these investments are made.

Introduction

(www.mckinseyquarterly.com/Financial_Services) The McKinsey Quarterly: Corporate Finance (www.mckinseyquarterly.com/Corporate_Finance) Ohio State University: Finance Site List (www.cob.ohio-state.edu/fin/journal/jofsites.htm)

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Industries and Careers for MBAs

Industries

Introduction

Scandal du Jour: Timing Is Everything The financial services industry hit the Comstock Lode of scandals after the bubble burst; regulators targeted almost all corners of Wall Street for working against the best interests of their clients. By 2005, mutual fund firms and brokerages appeared to have put the worst of the probes behind them and were dealing with the fallout. For brokers, that’s meant a higher “Chinese wall” between the investment bank and research departments, designed to eliminate the chance that an analyst might tout a company to the public in one breath—thereby pleasing that company’s management, which might then push lucrative investment banking business toward the analyst’s employer bank—while disparaging the firm in private. It wasn’t just the Armani-pinstriped power broker who felt the sting of the regulatory whip this decade. The Dockers-wearing mutual fund manager also saw his industry’s dirty laundry aired in public, causing massive asset withdrawals at some of the worst culprits. Janus Capital, Pilgrim Baxter, Putnam Investments, and Strong Funds were accused of short-trading in their own funds for certain executives’ personal benefit, or of allowing preferred customers to trade fund shares after hours. The upshot for clients is that fund companies have restricted loosey-goosey trades in mutual funds and generally disclose more to shareholders about how they’re spending money, particularly if the commissions that would be generated by these trades could undermine the best price or choice for the investor. The upshot for the industry can be summed up in four words: lawsuits and settlement fees.

Careers

Hedging Is the Bet Once thought arcane, volatile, and the province of Nobel Prize winners such as Myron Scholes, hedge funds have suddenly become arcane, volatile, and wildly popular. Their track record in down markets—hedge funds consistently beat mutual funds when indexes fall—has piqued the interest of smaller investors, even as their records start to look slightly less 64

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stellar. The firms, in turn, have noticed. Some hedge funds accept investments as small as $25,000 from individual investors. Asset managers have launched funds of hedge funds—vehicles that use some of the same investing techniques as a traditional hedge fund, such as short-selling, but mitigate the risk by spreading the investment across several hedge funds. Institutional investors such as pension funds and foundations still account for a large part of hedge fund contributions. Regardless of who’s investing, hedge fund numbers have grown so much that they now equal the number of mutual funds. Compared with about 100 in the early ’90s, investors can now choose from 8,000 to 9,000 hedge funds.

How It Breaks Down Though we divide the industry up into brokerages and mutual funds, within the two segments there are significant differences among the players. You’ll want to make sure you know not only which segment you’re interested in, but also how the particular company you’re interviewing with differs from the competition.

Brokerage A broker acts as the intermediary between the buyer and seller in a securities transaction. The buyer and seller, not the brokerage firm, assume the risk. (If the firm acts as the principal or dealer, it deals from its own account and assumes some of the risk itself.) Brokers charge their clients a commission. A fullservice firm such as Merrill Lynch charges commissions of up to several hundreds of dollars for transactions but offers extras such as tailored research, strategy and planning, and asset management accounts—checking, credit (including lending on margin), and brokerage, all in one convenient package. A discount broker, such as TD Ameritrade, generally just executes trade orders and issues a confirmation— with few or no frills. With or without frills, to be authorized to trade on the various exchanges you need to be a registered representative and licensed by the National Association of Securities Dealers.

Brokers and many of their clients tend to like passive investments, and funds are ideal for these types of people. But they may also want a little more involvement in fund information and more details than Mr. and Ms. J.Q. Public. Enter the wholesaler from mutual fund XYZ, ready to host a “client appreciation program.” Wholesalers market their funds to huge clients such as Merrill Lynch and Morgan Stanley, but they also focus on smaller brokers and independent financial advisers. This is nice work if you can get it, and most wholesalers do well. Salary range: $75,000 to $300,000, with liberal expense accounts for meals and seminars

Key Jobs for MBAs Portfolio Manager (Mutual Funds)

Wholesalers market their funds to huge clients, but also focus on smaller brokers and independent financial advisers. Nice work if you can get it.

Industries

Wholesaler

Whereas brokers act on investors’ orders, mutual fund managers raise cash from shareholders and then invest it in stocks, bonds, money-market securities, currencies, options, gold, or whatever else seems likely to make money. Mutual funds often have a specific investment focus—be it income, long-term growth, small cap, large cap, or foreign companies. And managers are restricted in what kinds of investments they can make. Funds hope to persuade investors that they offer several advantages compared to over individual portfolios: professional money management; liquidity; and more diversification than most individuals can create or afford in a personal portfolio, particularly now that switching between funds is allowed. All investors share equally in the gains and losses of a fund, and the most important factor in choosing one—whether to work for or invest in—is probably your tolerance for risk. Bull markets tend to make many funds look good, but a downward turn or a jump in interest rates can have a significant negative impact that may take longer to correct for a fund than it would in the nimble independent investor’s portfolio.

Introduction

Mutual Funds

Portfolio fund managers use their knowledge of investment theory, market experience, research from staff and outside companies, and occasionally plain dumb luck to pick investments for their fund portfolios. To reach the pinnacle in this profession, count on many years in the ranks of investment advisory and money management. Passing the SEC’s Series 7 exam is necessary to be registered, and the Chartered Financial Analyst (CFA) designation is a huge plus for people planning on entering portfolio management. Salary range: $200,000 to more than $1 million Careers

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Industries and Careers for MBAs Analyst or Researcher

Financial Planner

Here you delve into the fundamentals, examining every single feature of a security to determine if it’s really a buy. You specialize in a certain industry or an industry segment and come to know the companies that compete there inside out. Expect to give computer screens lots of quality time, and to get really cozy with annual reports. If you don’t like reading, accounting, crunching numbers, and more reading, you won’t be happy here. But it’s excellent training for more substantive and lucrative investment-advisory work or portfolio management. Top MBAs sometimes land plum industry assignments; everyone else has to cover trucking and footwear for a while before moving up to financial services, technology, and telecommunications. Salary range: $100,000 or more, plus bonuses of like or larger amounts

How will a one-income family pay for its kids’ college education? How soon, if ever, can a graphic artist retire? Financial planners help people work out these and other difficult money problems. If even wealthy people don’t much enjoy tackling these issues head-on, it’s safe to say that everyone else actively dreads it. But if you sympathize with that anxiety and know a lot about tax law and various investment strategies, you can do quite well in this business. You can also do it alone with a fair amount of flexibility. Whether you decide to be independent or join a firm, many of these professionals now opt for a Certified Financial Planner (CFP) certification. Salary range: $75,000 to $120,000; the very best can earn more than $250,000, typically working on a fee or commission basis

Introduction

.

Top Retail Brokerage Companies Ranked by Client Assets 2006 Client Assets ($M)

1-Yr. Change (%)

2006 Revenue ($M)

Financial Advisers

Merrill Lynch

1,619,000

11.0

70,591

15,930

Charles Schwab

1,240,000

11.0

4,988

n/a

Smith Barney (Citigroup)

1,230,000

9.0

8,160

13,143

UBS Wealth Management

827,000

22.0

5,863

7,800

Wachovia Securities

760,000

8.0

1,964

19,900

Morgan Stanley

686,000

11.0

5,505

8,030

Fidelity Personal Investments (1)

664,200

13.0

n/a

n/a

A.G. Edwards (2)

396,000

10.0

2,740

7,000

Edward Jones (1)

357,000

43.0

3,190

9,700

TD Ameritrade

261,700

n/a

1,003

n/a

E-Trade

195,000

14.0

1,704

n/a

Raymond James & Associates

182,000

16.0

2,633

4,772

Careers

Industries

Firm

(1) 2005 figures; (2) Acquired by Wachovia for $6.8 billion Sources: Company websites and SEC filings; WetFeet analysis; Hoover’s

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Additional Resources

These jobs are similar to product management positions at consumer products companies, but the products here are financial. People in sales no longer focus on funds or investments. They need to be able to sell any of a growing spectrum of financial products, depending on a customer’s short- and long-term needs—and whatever his brother-in-law told him to do last week. This is forecast as one of the strongest areas for jobs in the next five to ten years. Marketers focus on both the long-term picture and specific current product offerings: Who needs what, and how much will they pay for it? Salary range: $45,000 to $100,000, including bonuses, which can range into six figures

Careers in Asset Management & Retail Brokerage (WetFeet Insider Guide, available from www.wetfeet. com) CFA Institute (www.cfainstitute.org) Financial Analysts Journal (www.cfapubs.org/loi/faj) Institutional Investor (www.institutionalinvestor.com) Investor’s Business Daily (www.investors.com) The McKinsey Quarterly: Financial Services (www. mckinseyquarterly.com/Financial_Services) Ohio State University: Finance Site List (www.cob. ohio-state.edu/fin/journal/jofsites.htm)

Introduction

Sales and Marketing

Job Prospects

Industries

Everyone is trying to make money with money. This all boils down to a wide range of career options in a dynamic industry. The jobs that are in demand are closely tied to a firm’s strategy. Discount brokers, the ones that benefited the most from average-Joe day trading, have kept a tight cap on headcount now that Joe has gone back to his day job. The largest, generally New York–based, brokerage houses (sometimes called “wirehouses”) continue to recruit trainees for numbercrunching analyst positions and more sales-oriented marketing and brokerage support jobs. And the merger frenzy that took hold of the financial services sector in the late 1990s and early 2000s has endowed some regional players with bigger aspirations. For example, Wachovia Securities—created by the 2003 merger of the brokerage arms of Wachovia Corp. and Prudential Financial—has been aggressive in ramping up its brokerage operation in recent times. There’s money to be made, but you’ll have to make it the old-fashioned way—by earning it. But if you find (and keep) a job in the industry, you can still expect to make a solid living and have something of a life, particularly compared with the slave-labor existence of your investment banking peers.

Careers

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Introduction

Industries and Careers for MBAs

Nonprofits and Government Agencies Industry Overview

Careers

Industries

Nonprofits Nonprofit organizations are businesses designed to make change, and not in the monetary sense. Granted 501(c)(3), or tax-exempt, status by the government, these organizations focus on a wide variety of causes— everything from the Africa Fund, which promotes human rights, education, and people-to-people exchanges with African countries, to the National Breast Cancer Foundation. Many nonprofit interest groups are located in Washington, D.C., where they lobby government on behalf of their causes. Others have offices near state legislatures, where they lobby for passage of legislation favorable to their causes. Nonprofits derive their operating revenue from foundations, government grants, membership dues, and fees for services they provide. These organizations typically attract people who are passionate about solving social problems. The big upside of working in this sector is that you can make a positive impact on behalf of your organization’s cause; the downside is that most jobs in the nonprofit sector don’t pay very well. Nonprofits and charitable organizations are becoming much more entrepreneurial, learning lessons from the private sector on how to operate more efficiently and do more with less—by adopting marketing techniques to enhance their fundraising efforts, or even by starting their own small businesses to help generate income to fund social programs.

Government Some 20 million people in the U.S. work for the government—agencies and departments that, on a federal, state, or local level, handle issues as diverse as 68

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highway construction, the protection of wilderness areas, public health programs, subsidies to tobacco farmers, the space program, and fireworks displays on the Fourth of July. Governments collect taxes and use them to fund programs. This includes everything from a small-town government filling potholes on Main Street, to a big city providing police and firefighting services, to a state issuing driver’s licenses, to the federal government sending troops into combat or making Medicare payments to a long-term health-care facility for the elderly.

Although the federal government employed nearly 2 million civilians in 2006, far more jobs are available at the state and local levels. Federal and state legislators make laws, and city and county supervisors pass ordinances. Executive agencies—from the White House to the state house to city hall—issue regulations. Governments employ armies of civil servants, bureaucrats, lawyers, and specialists of all kinds to implement their policies and staff their programs. These are people who analyze policy and draft legislation for U.S. senators, people who issue building permits at town hall, and everyone in between. It’s important to note that although the federal government is gigantic—it employed nearly 2 million civilians in 2006—far more jobs are available across the country at the state and local government levels; in 2006, more than 15.9 million people—teachers, police officers, firefighters, hospital workers, and so on—were employed by state and local governments. While most employees in this sector enjoy excellent benefits, working in government can have its downsides. For one thing, the pay is often

Trends

Meanwhile, in the nonprofit arena, some are complaining that homeland security is eroding citizens’ civil rights and is stifling the dissenting voice of nonprofits that advocate policies opposed to federal government practices—for example, by conducting IRS audits of liberal nonprofits, or by attempting to limit or eliminate federal funds for certain nonprofits.

Measuring the Metrics

There’s been plenty of talk about the federal government’s financial troubles. But it’s not just the federal government that’s in dire financial straits— most states also are having a hard time maintaining government service levels and balancing their budgets. As a part of states’ efforts to make ends meet, lots of services are getting cut, from education to social programs to road repair projects. The victims of such cost-cutting vary from state to state. But you can probably expect fewer opportunities for, say, state college professors, highway engineers, and administrators of state-run social programs. And not only government programs have been hurt by governments’ financial woes; governments are also the biggest funders of many, many nonprofits. Nearly a third of the average nonprofit’s income comes from government contracts and grants. This means that, in many cases, nonprofit budgets are ailing as a result of government funding cuts.

In an effort to increase their efficiency and effectiveness, governments and nonprofits increasingly are adopting management techniques from business. For example, they’re relying more on metrics— quantitative measurements—to gauge their success in achieving goals. So as time goes on, more government and nonprofit programs, as well as the staffers who drive them, are being evaluated by their ability to meet the metrical goals set for them by management—in tandem with funders, in the case of nonprofits. This

Members of Congress maintain staffs in their home districts or states; you can often find opportunities here.

Industries

Governments in the Red

Introduction

lower in these positions than in their private-sector equivalents. And in many government positions, jobs are politicized: Your priorities (and the culture of your workplace) can change with the election cycle, and the program you’re working on or the representative you work for may not even be around next year.

Homeland Security can be a good thing or a bad thing, depending on whether the right metrics are being used to measure success. It’s a lot easier to measure the success of a forprofit business by looking at the bottom line—and to analyze the contributions of individuals to that bottom line—than it is to measure nonprofit or government success, where the goal is not to make a profit but to achieve a mission that’s difficult to quantify.

How It Breaks Down Nonprofits More than 25 kinds of nonprofit organizations are recognized by the IRS, from the sacred (religious WETFEET INSIDER GUIDE 69

Careers

September 11, 2001, made clear the threat of terrorism to the U.S. In response, the federal government gathered together a number of previously separate government entities to centralize their efforts to protect the country, avoid redundancy, and allow different organizations to work together rather than at cross-purposes. President Bush has made homeland security a priority for his administration, resulting in strong budgets in this sector. This means more career opportunities for job seekers interested in intelligence gathering, analysis, or working for the Border Patrol, Customs, or other entities under the Department of Homeland Security umbrella.

Careers

Industries

Introduction

Industries and Careers for MBAs groups) to the obscure (trusts for miners suffering from black lung disease). The nonprofit sector can be broken down in a number of ways. For instance, nonprofits can be divided into those that focus on lobbying government on behalf of a cause (interest groups such as the National Rifle Association or Greenpeace) and those that focus on providing services to society (such as museums, or homes for pregnant teens). Alongside the large national and international nonprofits are myriad smaller, local nonprofits. Like their larger cousins, these break down by mission and include everything from community theater troupes to women’s shelters to convalescent homes. In addition, the nonprofit arena includes nonprofit charitable/philanthropic funds and foundations. These organizations have an endowment and/or solicit donations, which they use to fund grants to nonprofit organizations. There are several types of foundations. Community foundations raise funds from a variety of donors in a community or region. Corporate foundations are established by corporations as separate entities to make charitable grants. Independent foundations usually consist of an endowment made by a single individual or family. Operating foundations focus on funding their own nonprofit programs.

Government The executive branch agencies—including the Social Security Administration, the Environmental Protection Agency, the FBI, the National Endowment for the Humanities, the Bureau of Indian Affairs, and the Bureau of Engraving and Printing—account for the largest group of federal government jobs. Positions are also available in agencies under the aegis of the judicial and legislative branches, such as in the Library of Congress and the Congressional Budget Office. There are two basic types of positions in the various government agencies: civil service positions and political appointments (also called “Schedule C” appointments). Not all people with federal agency jobs are based in Washington, D.C. Think of all those postal employees out on the streets of America, braving snow, rain, heat, and gloom of night; or the diplomat at the U.S. 70

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embassy in Cairo; or the park ranger in Yellowstone National Park. Think of the bureaucrats in federal office buildings in every major U.S. city, the Bureau of Indian Affairs agent on an isolated reservation in New Mexico, the civilian technician maintaining communications gear in the tropical heat of Guam, or the medical researcher culturing bacteria at the Centers for Disease Control in Atlanta. Congressional jobs, on the other hand, are more geographically concentrated. Most people who work for the legislative branch of the federal government are based in Washington, D.C. They’re on legislators’ staffs

Largest U.S. Government Agencies 2008 Federal Budget Outlays ($M)

2007 Civilian Employees

Health and Human Services

699,240

64,038

Defense

583,283

669,240

Treasury

524,990

106,842

Agriculture

89,026

98,297

Veterans Affairs

83,288

242,234

Transportation

67,032

53,849

Education

58,603

4,355

Homeland Security

43,200

169,749

Justice

24,045

106,384

Interior

10,528

68,446

Department

Sources: Budget of the U.S. Government, U.S. Census Bureau FY 2007, 2008; The NonProfit Times; WetFeet analysis

or in agencies in the legislative branch, such as the aforementioned Library of Congress. Representatives and senators also maintain staffs in their home districts or states, in addition to their Washington-based staff; this is where many opportunities exist for young

people, provided they have a good education and, usually, good connections. State and local governments tend to operate similarly.

In addition to the job opportunities that exist within government, there are plenty of political opportunities that technically are not within government. For

Largest U.S. Nonprofit Organizations Organization

Chicago

5,131

The Salvation Army

Alexandria, Va.

4,559

American Red Cross

Washington D.C.

3,888

Catholic Charities USA

Alexandria, Va.

3,286

Goodwill Industries International

Bethesda, Md.

3,023

United Jewish CharitiesCommunities

New York

2,149

Memorial Sloan-Kettering Cancer Center

New York

1,790

Atlanta

1,329

New Canaan, Conn.

1,316

Americus, Ga.

1022

American Cancer Society

Atlanta

978

The Nature Conservancy

Arlington, Va.

918

Federal Way, Wash.

902

New York

866

Gifts in Kind International

Alexandria, Va.

860

Feed the Children

Oklahoma City

852

Volunteers of America

Alexandria, Va.

839

Boy Scouts of America

Irving, Tex.

836

Chicago

833

Deerfield Beach, Fla.

782

YMCA of the USA

Boys & Girls Club of America AmeriCares Foundation Habitat for Humanity International

World Vision Planned Parenthood Federation of America

Easter Seals Food for the Poor

WETFEET INSIDER GUIDE

Careers

2005 Revenue ($M)

Industries

Headquarters

Introduction

Nongovernment Political Jobs

instance, many people work at lobbying firms (Akin Gump Strauss Hauer & Feld and Patton Boggs are two examples), nonprofit interest groups (such as the American Medical Association or the Teamsters Union), and think tanks (the Brookings Institute, the Cato Institute, the Heritage Foundation, and others). Most of these organizations are located in Washington, D.C., and in various state capitals. Both the Democratic and

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Introduction

Republican parties have national committees as well as state and local offices where job seekers interested in working for a political party may find opportunities.

Key Jobs for MBAs Program Director In larger nonprofits and a handful of small ones, a tier of midlevel management is needed. Duties include oversight and management of a specific program, often including hiring personnel, fundraising, public relations, and other administrative and management duties specific to the program area. The program director usually reports to the executive director. Salary range: $40,000 to $95,000

Industries

Executive Director As the grand pooh-bah of an organization, the executive director is the equivalent of a CEO and reports to the board of directors. He or she is financially accountable for the organization, oversees all strategic planning and management, and may or may not be involved with other duties including (depending on the size of the nonprofit) fundraising and development, board development, hiring, media relations, program development, and just about anything else that needs to be done. Salary range: $65,000 to $200,000 and up

Project Manager Government project managers work in regulatory agencies, where they manage the process of regulatory review through all its stages. (Think of IRS agents auditing a business, or SEC officials investigating charges against a brokerage house.) The job typically requires experience in the regulated industry, an MBA, or equivalent skills. Salary range: $60,000 to $95,000

Careers

Job Prospects It can be tough to land a job in nonprofit or government. The hiring process is often lengthy, and the competition fierce. For example, one foundation executive director in California recently received 72

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400 applications for a program manager position. Persistence pays off, though. If you’re committed to a particular issue, don’t hide it. Volunteering and interning are two very good ways to get in the door at a nonprofit. If you want a government internship, however, you’ll most likely have to be a student. That said, a number of government agencies are increasing their hiring numbers, especially in the areas of security and foreign affairs—whereas nonprofits for the most part aren’t. So you may find it less of an uphill battle to get a paying government job than even a nonpaying internship at a nonprofit. Most government agencies have dedicated recruiters who attend college career fairs, industry conferences, and other job placement events. Recruiters tend to be regionally located and look for candidates who have the particular set of skills their area needs. One intelligence agency recruiter says that while many people like giving a resume to someone face-to-face, resumes submitted online or by mail go through the same process as those given to recruiters directly. So try your luck on agency websites. Government agencies will have recruiting “blitzes,” too. Security agencies are recruiting yearround right now, while other agencies, such as the General Accounting Office, accept applications only at certain times of the year. Also, because a huge number of government employees will be retiring in the next 10 to 15 years, there’s a lot of advancement potential.

Additional Resources Careers in Nonprofits & Government Agencies (WetFeet Insider Guide, available from www.wetfeet.com) The Chronicle of Philanthropy (http://philanthropy.com) Governing.com (www.governing.com) GovernmentExecutive.com (www.govexec.com) Govtjobs.com (www.govtjobs.com) Idealist.org (www.idealist.org) Nonprofit Career Network (www.nonprofitcareer. com) Opportunities in Public Affairs (www.brubach.com) USAJobs (www.usajobs.gov)

Real Estate Industry Overview

Trends Everyone’s a Donald Trump

Industries

REITs took real estate financing from back rooms and private investors and brought it to public markets. As the industry continues to grow into this model, real estate investments are becoming a more common addition to income-earning investment portfolios, both in the public sector as REITs and as private equity for high-net-worth individuals. As stocks and other non–real estate equities have performed poorly, investors have poured even more money into real estate. With this newfound popularity, REITs and the real estate asset class are finding that they’re the big men on the investment campus. With this trend, increasingly more real estate finance is likely to take place through public markets and investment houses. Of course, some analysts worry that a stock market recovery will spur an outflow of funds from real estate investments, and the consensus among analysts is that the portfolio-floating returns of the past several years can’t—and won’t—continue.

Introduction

Wall Street Is Like Lithium In former years, the real estate industry was like your brilliant but manic-depressive friend, with higher highs and lower lows. The cyclical nature of the industry was exacerbated by many small-time speculators who worked independently of one another. Developers tended to work with private capital and build on gut feel rather than sound analysis. The consequence was horrible overdevelopment during booms that led to overcapacity in lean years—it’s a true boom-and-bust industry. As financial markets have taken over much of the financing of commercial development through REITs and private equity placement, they have also forced discipline on developers. Consequently, WETFEET INSIDER GUIDE

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Careers

The real estate industry’s pared-down definition is land. But it’s much more complicated than that. The industry involves the buying, selling, renting, leasing, and management of commercial, residential, agricultural, and other kinds of property, including all the functions that support such activity, such as appraising and financing. The successful realtor is necessarily a shrewd salesperson with a deep knowledge of real estate markets and a broad understanding of the contracts, laws, and tax regulations that apply to real estate transactions. The real estate market has undergone dramatic changes in recent years. Real estate investment trusts (REITs) have become major sources of financing for property acquisition and development. According to the National Association of Real Estate Investment Trusts, the total market capitalization of public REITs in the U.S. has grown from about $10 billion in 1990 to more than $355 billion in roughly 200 funds in 2006, causing a revolution in real estate financing similar to the rise of the individual investor in the stock market. Sources of financing have been steadily moving from cabals of private investors to public equity, in the form of REITs. With this shift has come more transparency in the market and a slow whittlingaway of the old boys’ network for which real estate investment is infamous. This transparency also shines a critical light on investment strategies, which are now subject to public scrutiny and are therefore more accountable to the will of investors. Families with their savings invested in REITs are unlikely to tolerate the wild swings of fortune of stereotypical real estate tycoons; Wall Street and REITs have had a stabilizing effect on the industry. Finally, mergers and acquisitions have increased the size and scope of firms involved in real estate, with companies like brokerage and hotel franchiser Cendant leading the charge. Nevertheless, the industry itself has been slow to change. Two of the largest real estate investment

companies, the Trump Organization and the Lefrak Organization, are decidedly private and operate almost exclusively in the New York area. With its unpredictable cycles and idiosyncratic geographic markets, the real estate industry continues to defy taming by modern organizational structure.

Introduction

Industries and Careers for MBAs developers, now under Wall Street’s scrutiny, have forced themselves to be much more disciplined— developments and property acquisitions are subject to sensitivity analysis and “what if ” scenarios rather than wild speculation.

The great thing about real estate is that it’s not going away. The level of demand and the number of jobs the market can support are what fluctuate.

Industries

Finding a Niche Although the real estate industry has always been attuned to location (location, location), it hasn’t cared what the people in a location want. Companies are now striving to market to socioeconomic groups and anticipate the needs of different markets. This industry trend has companies catering exclusively to specific niche groups. Homebuilders are now developing “masscustomized” homes with luxury options like kitchen islands or built-in high-end appliances, much in the same way car manufacturers offer top-grade leather interiors and dual climate-control air conditioning.

Banker to bigger corporations that broker sizable commercial properties such as office towers. Grubb & Ellis has one of the largest global brokerage divisions, offering sales and leasing services in many U.S. markets and in Europe. Cushman & Wakefield is another giant, with offices nationwide. Its clients are primarily corporations and other institutions, for which it negotiates sales and leases.

Management Property managers are responsible for maintaining property values. They deal with tenants, manage finances, and physically tend to the property. Of all the industry segments, this one has been hit hardest by the wave of mergers and acquisitions sweeping the industry. Some industry insiders are predicting that 75 percent of the property management firms in operation in 1990 will be out of business by 2007. For job seekers, this means fewer jobs as companies look to become more efficient and cut redundant staff.

With its unpredictable cycles and idiosyncratic geographic markets, the real estate industry continues to defy taming by modern organizational structure.

How It Breaks Down

Careers

Job opportunities in the industry are divided into four distinct fields: sales, management, development, and acquisition and analysis. Although crossover among these sectors is possible, most people start out specializing in a specific area.

Sales and Leasing This segment includes everything from residential real estate brokers such as Century 21 and Coldwell 74

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Development Developers are responsible for taking a property idea and making it a reality. This is a complex process involving architects, engineers, zoning officials, builders, lenders, and prospective tenants. Development isn’t always the gravy train some make it out to be. In the early 1990s, when real estate prices crashed, construction dried up and a lot of commercial

Key Real Estate Companies Company

Employees

Lennar

16,266.77

17.3

12,605

D.R. Horton

15,051.3

8.6

8,772

Pulte Homes2

14,274.4

-–2.9

12,400

Centex Homes

12,272

24.5

9,3459

KB Home

11,004

16.5

5,100

The Trump Organization (1)

10,400

22.4

22,000

NVR

6,157

16.7

4,548

Hovnanian Enterprises

6,148

15.0

6,239

Toll Brothers

6,124

5.7

5,542

Beazer Homes USA

5,462

9.3

4,234

Host Hotels & Resorts

4,888

25.9

229

MDC Holdings

4,802

–-1.7

3,200

The Ryland Group

4,757

–-1.3

2,810

C.B. Richard Ellis Group

4,032

38.5

24,000

Standard Pacific

3,964

–-1.2

2,580

Meritage Homes

3,461

15.3

1,950

Simon Property Group

3,332

5.2

4,300

General Growth Properties

3,256

5.9

4,700

Equity Office Properties

3,001

–6.1

2,300

Industries

1-Yr. Change (%)

Introduction

2006 Revenue ($M)

(1) 2004 figures; (2) 2006 figures Sources: Fortune; Hoover’s; Crain’s New York Business; WetFeet analysis

office space was left vacant. Deprived of rents, quite a few developers had to scramble for survival. Some ventured into other areas of real estate. Today, many of the largest real estate developers are also property owners and managers.

Any kind of investing in real estate requires a thorough understanding of how to analyze the

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Careers

Acquisition and Analysis

value of a property and navigate the maze of landuse regulations, zoning laws, environmental-impact reports, financing realities, and other barriers to buying and developing a property. The people who develop, market, and manage REITs and other real estate investments are financial types, often MBAs, who are charged with evaluating and arranging for the purchase of properties.

Introduction

Industries and Careers for MBAs Key Jobs for MBAs

Job Prospects

The great thing about real estate is that it’s not going away. The level of demand and the number of jobs the market can support are what will fluctuate. For salespeople, there’s plenty of competition. On the management side, there’s the popularity of rental housing and a rising number of job opportunities in apartment and assisted-living management. Those who want security can find work as appraisers, as those jobs are less affected by the industry cycle.

You may have a hard time establishing yourself without solid connections in the industry. For the most part, real estate veterans rely on the advice of contacts to help make recruiting decisions. Rather than use traditional recruiting processes, companies often bring on new talent through personal networks and word of mouth. It’s even harder to break into the elite club of real estate investment finance. More established executives may be recruited via select headhunting firms. In addition to real estate investment management opportunities, rewarding positions are plentiful in property management, real estate services, and residential brokerages, and there are very challenging development roles available in corporate real estate. Beware, though: Skills in one real estate market aren’t necessarily transferable to other markets. Choose your location carefully. And once you’re in, be prepared to ride the roller coaster of a cyclical industry. Although the real estate industry is in a protracted boom period right now, veterans assure us that busts will come, and they won’t be pretty.

Consultant or Adviser With the increase in institutional investing, demand for this type of expert has risen. Prior experience in investing or management is necessary. A real estate adviser is generally good with statistics and excels at dealing with clients. Salary range: $55,000 and up

Industries

Developer A developer makes property plans come to life. To become a developer, you’ll need excellent communication skills and a strong understanding of all aspects of the real estate industry. Most developers start out in entry-level positions working for another developer or contractor and then work their way up. Salary range: $70,000 to $125,000 or more

Entrepreneur

Careers

A real estate entrepreneur buys property for the purpose of making money. Success as an entrepreneur takes an equal mix of industry smarts and good fortune. Just remember that although many people have made fortunes in real estate, even more haven’t. Salary range: The sky’s the limit, but the threat of bankruptcy is very real.

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Additional Resources Careers in Real Estate (WetFeet Insider Guide, available from www.wetfeet.com) Institute of Real Estate Management (www.irem.org) CoreNet Global (www.corenetglobal.org) Knowledge@Wharton: Real Estate (http:// knowledge.wharton.upenn.edu/category.cfm?cid=8) National Association of Real Estate Investment Trusts (www.nareit.com) National Association of Realtors (www.realtor.org) Urban Land Institute (www.uli.org)

Telecommunications Industry Overview

Trends Convergence Confusion

Industries

With each passing year and each new generation of products, it’s getting harder and harder to pigeonhole companies and their offerings into traditional categories like telecommunications, computer hardware, and consumer electronics. Consider cell phones: These days, cell phones can take digital photos, send and receive email, access the Internet, download and play music and videos, and transmit their geographic location via GPS technology. You tell us: Should cell phones that do all that be called “consumer electronics products?” “Telecom products?” “Computer hardware products?” One result of convergence is that players in the consumer electronics, computer hardware, and telecom sectors are increasingly finding themselves competing head-to-head to determine who will lead in new product categories. Turmoil, in the form of mergers and aquisitions M&A and fluctuations in profitability, is likely to result in each of these industries as time passes.

Introduction

The Growth of Wireless The wireless sector is growing like gangbusters, with wireless connections rapidly multiplying. The launch of dozens of 3G networks is enabling faster speeds, quicker downloads, and improved service. At the same time, wireless carriers have been consolidating: think Cingular and AT&T; Sprint and Nextel; Alltel and Western Wireless.

VoIP Voice over Internet Protocol (VoIP) makes it possible to send phone calls as data packets across the Internet WETFEET INSIDER GUIDE

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Careers

Technically, telecommunications encompasses any communication over a distance, be it via telephone, television, radio, wireless network, computer network, telemetry, or other means—but traditionally, the term referred to telephone service. These days, though, all these technologies and others are converging—indeed, now you can access the Internet, play videos, or track your children’s movements via global positioning system (GPS) technology on your cell phone—so the lines between telecommunications and computer hardware, consumer electronics, and other industries are getting blurrier all the time. In other words: If you want to work in an industry that requires you to learn fast and adapt quickly, this is it. Telecommunications is a mammoth industry, comprising companies that provide hardware, software, and services. Hardware includes a vast range of products that enable communication around the entire planet, from video broadcasting satellites to telephone handsets to fiber-optic transmission cables. Services include running the switches that control the phone system, providing Internet access, and configuring private networks by which international corporations conduct business. Software makes it all work, enabling email transmission, relaying satellite data, controlling telephone switching equipment, reducing background noise on cell phone calls, and more. The breakup of AT&T in 1984 created the modern telecommunications industry, subjecting telephone companies to free-market forces for the first time. While the long-distance market became competitive almost immediately, the so-called Baby Bells fought to keep companies such as AT&T (since acquired by SBC) and MCI (recently acquired by Verizon) out of the local phone market. But the Telecommunications Act of 1996 deregulated local phone markets. Proponents say deregulation makes telecommunications services more competitive, benefiting consumers. Critics say it gives a few

giant companies unchecked sway over our ability to communicate with each other. Regardless, deregulation appears here to stay, with the industry swept up in waves of consolidation that are likely to continue.

Introduction

Industries and Careers for MBAs and other IP networks (such as private local area networks), meaning phone calls no longer have to travel through local phone company lines. The quality, consistency, and reliability of VoIP don’t equal that of traditional phone networks, but they’re getting there. And the price sure is right: Like email, VoIP-to-VoIP phone calls are free—the only cost is that of your broadband Internet connection, which is typically a relatively small, fixed, up-front fee. Today’s VoIP offerings do have some downsides, however: While corded phones usually continue to work during power outages, VoIP calls themselves require power. Also, most VoIP offerings don’t support encryption, so the security of VoIP phone calls can be questionable—but use of VoIP is growing all the time.

Industries

How It Breaks Down Before 1996, a variety of regulations divided telecommunications artificially: Cable TV companies were prohibited from offering local telephone service, video programming over phone lines was banned, and local and long-distance service providers were forbidden from competing in each other’s markets. The Telecommunications Act passed during that year lifted those restrictions. One remaining regulatory barrier prohibits service providers from manufacturing telecommunications equipment. The cleanest way to break this industry down, then, is between those who make the software and hardware and those who provide various services.

Careers

Service Providers These companies provide local and long-distance wireline (nonwireless) telephone service. Industry insiders call this POTS, for Plain Old Telephone Service. Wireline providers include the large longdistance companies such as Verizon and Sprint, and the RBOCs (Regional Bell Operating Companies— the Baby Bells) like AT&T and BellSouth. A new generation of companies, including Qwest, Level 3, and Verizon, is laying fiber-optic wire networks to handle the rapidly increasing amount of data traffic.

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Wireless Service Providers Marked by carrier consolidation and partnering to augment geographic reach and gain economies of scale, wireless communication services have shaken up the telecom industry. They’ve also brought telecommunications to the far corners of the world, including parts of Africa and South America that lack wireline infrastructures, and have made local markets far more competitive in the U.S.

Satellite Telecommunication Services Satellite telecom services break down into fixed satellite services such as Intelsat; low earth orbit (LEO) satellite companies such as Globalstar and Iridium; direct broadcast satellite (DBS) companies like DirecTV; and the GPS. Satellite services include such technologies as navigation systems (like those included in the dash of some new vehicle models), video broadcasting, and data transmission.

The hiring outlook is good in high-speed data services, voice communication over the Internet, wireless networking, and other telecom sectors that are bringing exciting new technologies to market. Internet Service Providers ISPs are the companies that enable you to go online— including AOL, Earthlink, MSN, cable companies, and the RBOCs. The Internet, which has become an integral part of the telecommunications industry, is also the vehicle by which a huge dose of talent and energy has been added to telecom as voice and data networks converge.

Customer Premise Equipment (CPE) Manufacturers

If you want to work in an industry that requires you to learn fast and adapt quickly, telecom is it.

Networking equipment is the stuff that makes a LAN operative, including routers, hubs, switches, and servers. Fiber optics consists of the optical fiber and fiber-optic cable, transmitters, receivers, and connectors that carry data and voice messages. The biggest switch makers are Nortel and Lucent. Cisco and 3Com are among the biggest makers of networking equipment.

Wireless and Satellite Communication Equipment Manufacturers

Essentially, product managers make the product happen. Product managers determine what service or product they’ll sell to the end user, and then they help develop it—be it wireless service, DSL, caller ID, or voicemail. On the manufacturing side, they need to know the technology. This position generally requires an MBA or similar experience with another company, preferably in networking or data communications. Salary range: $60,000 to $125,000

Public Relations and Government Relations The role the government has played in regulating telecommunications has resulted in a number of jobs being created within major companies to work with the government and press to enhance relations. Key responsibilities include lobbying government officials, helping draft legislation, and interfacing with the press to garner favorable coverage for regulations your company supports. Salary range: $50,000 to $150,000

Job Prospects Telecom companies built staff and infrastructure like crazy during the boom times of the 1990s. In the early 2000s, many telecoms used layoffs, massive reorganization, and spinoffs to offset losses, making the employment outlook bleak. More recently, the industry has been recovering somewhat, and the prospects for job seekers are looking more favorable. Still, the U.S. Bureau of Labor Statistics expects employment in the telecommunications industry to decline 7 percent from 2004 through 2014, compared with 14 percent growth for all industries combined. In this varied field, demand for workers, or lack of it, will be based mostly on technology. For example, as new voice recognition technology improves productivity, jobs for, say, telephone and directory WETFEET INSIDER GUIDE

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Careers

These are various categories that we’ve grouped together. The radio-based communication systems, switches, transmission devices, and subscriber equipment for this sector differ from what the wireline service providers use. Large players in wireless equipment include Motorola, NEC, Qualcomm, and Sony. Satellite communication equipment makers

Product Manager

Industries

Networking Equipment and Fiber Optics Manufacturers

Key Jobs for MBAs

Introduction

Telecommunication service providers are the biggest customers of telecommunications equipment makers. To sell their services, these providers must purchase switches, some of which can serve tens of thousands of users, as well as other CPE—telephones, voicemail systems, private branch exchanges (PBXs), and more. Local area networks (LANs) require their own routers, switches, and hubs. The big players here include Alcatel, Fujitsu, Lucent, Nortel, and Siemens.

include Comcast and Intelsat, as well as a number of cable providers, such as Cox Communications, and DBS companies like DirecTV and Dish Network.

Introduction

Industries and Careers for MBAs assistance operators will continue to decrease in number. But the need for engineers who develop that technology will increase. The outlook is good in telecom sectors that are bringing exciting new technologies to market. High-

Key Telecommunications Companies Company

2006 Revenue ($M)

1-Yr. Change (%)

Employees

Verizon

88,144

17.4

242,000

AT&T

63,055

43.8

302,000

Nokia (31)

54,292.1

34.1

68,483

Motorola

42,879

16.4

66,000

Sprint Nextel

41,028

18.3

103,483

25,974.1

36.1

56,055

Comcast

24,966

12.2

90,000

Cisco Systems (22)

24,484

14.9

49,926

Comcast3

23,966

12.2

90,000

Alcatel (31)

16,209

4.2

89,37079,000

14,755.56

12.1

11,200

T-Mobile (1) (2) (31,2,3)

14,080

50.3

29,000

Qwest Communications International

13,923

0.1

38,000

12,476.97

32.1

63,700

Time Warner Cable

11,767

23.9

43,000

Nortel Networks

11,418

8.5

33,760

9,818.59

16.5

21,000

Alltel

7,884

-–16.9

14,899

Qualcomm1

7,526

32.7

11,200

6,722.3

4.6

22,530

Telefonaktiebolaget LM Ericsson

Industries

speed data services, voice communication over the Internet, and wireless networking are some of the sectors that will be hiring, and small companies are good places to find jobs. Electrical and electronics engineers, computer software engineers, systems

DirecTV Group

L-3 Communications Holdings

EchoStar Communications1

Careers

Cox Communications (13)

2005 figures(1) Foreign company; figures reflect worldwide sales and employment; (2) Highly diversified company; figures include departments that operate in other industries (3) 2005 figures (4) Restructured by parent company Siemens AG.Sources: Hoover’s; WetFeet analysis

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Additional Resources International Telecommunication Union (www.itu. int/home/index.html) TelecomCareers.net (www.telecomcareers.net) Telecommunications Industry Association (www.tiaonline.org) Telecommunications Online (www.telecoms-mag.com) TelecomWeb (www.telecomweb.com) Wireless Telecommunications Bureau (wireless.fcc.gov)

Transportation Industry Overview

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Industries

The transportation industry is enormous. It encompasses everything from municipal bus, subway, and commuter train systems that get folks to and from work and school, to the container ships that transport goods from port to port all around the globe; from the rail and trucking networks that move those containers across states, countries, and continents, to the airlines we use to fly to destinations near and far for work and pleasure; to the express shipping companies for “when it absolutely, positively has to get there overnight.” In other words, transportation includes all the businesses that move people or goods, by land, sea, or air, from one point to another. And this enormous industry employs millions. Virtually everything that surrounds us—including our clothes—comes from somewhere else. Your computer’s components, manufactured in multiple countries, all had to be transported to the computer manufacturer, assembled, and then transported to a store or perhaps your front door. The newspaper you read this morning couldn’t have been produced or delivered without the transportation industry (trucks deliver logs to the paper mill; the paper and ink are delivered to the printing press). And then there’s passenger travel—the airlines, trains, boats, and buses that people use every day to get from place to place. Transportation may not be sexy, but it pervades nearly every area of our lives. Without the transportation industry, all economies— global and domestic—would disintegrate. Opportunities in the industry can be classified geographically as local, regional, national, or international. In many career paths, you’ll need to pay your dues in a local job before moving up to a regional transportation outfit, and you’ll have to work at a regional one before moving to a national company. If you go into freight transportation, be aware that this sector has been consolidating as companies seek to become global players by merging into giant, fullservice transportation integrators that combine ships, trains, boats, and rail.

Introduction

analysts, customer service professionals, and the like will find opportunities growing faster than for the overall industry as networks expand, providers invest in R&D, and computer technology becomes more sophisticated. Line installers and repairers should also find work as businesses seek to increase connections to suppliers and customers, and as residential users add broadband service.

Industries

Introduction

Industries and Careers for MBAs Trends

Just-in-Time Technology

Hard Times for Airlines

Just-in-time technology allows businesses to avoid inventory costs by procuring goods only when they’re needed. Take PC manufacturers like Dell or Gateway, which promise rapid delivery. Instead of gathering all the parts needed to make a computer, assembling all those parts, and storing the computer in inventory—tying up money that could be used for other purposes before anyone’s actually purchased the PC, and increasing costs due to inventory maintenance—just-in-time technology allows the manufacturers to order the components, have them delivered, have them assembled into a PC, and ship the PC to the customer sometimes in a matter of hours. The freight transportation industry has earned new relevance thanks to its implementation of just-intime technology.

The airline industry has taken a series of body blows in recent years. First there was 9/11, which resulted in a year or two of reduced numbers of passengers, as well as new costs associated with beefed-up airline security requirements. Then there was the increase in fuel prices, punctuated by a spike in the wake of 2005’s Hurricane Katrina. And through it all, airlines, like all U.S. industries, have been faced with higher and higher health-care costs for employees. The consequences have included considerable strife between labor and management, with workers fighting to keep the benefits they believe they’ve earned, while managers struggle to cut costs and make their businesses profitable. Ask any insider and he or she will tell you: The airline industry has been an ugly mess. Indeed, in recent years several major airlines have been forced to operate under bankruptcy protection, —including US Airways, Delta, and the parent company of United Airlines. There are signs that some of the troubled airlines are beginning to find their footing again. They’ve been helped by rising fares, especially on international routes. On the other hand, successful carriers such as JetBlue and Southwest Air have begun to experience turbulence: Both airlines have been hit hard by rising fuel prices, and JetBlue’s reputation suffered after a rash of scheduling mishaps left angry passengers waiting for hours on runways.

Careers

Consolidation As in other industries in recent years, many of the big players in transportation have been looking to get bigger, with an eye toward lowering costs through economies of scale. For example, American Airlines owner AMR absorbed TWA; US Airways merged with America West; Deutsche Bahn acquired BAX Global; Canadian National merged with British Columbia Rail; DHL acquired Airborne; Deutsche Post acquired Exel; and A.P. Møller-Mærsk acquired Royal P&O Nedlloyd.

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How It Breaks Down The transportation industry has two sides: the companies that move goods (freight and shipping

In many transportation career paths, you’ll need to pay your dues in a local job before moving up to a regional outfit, and you’ll have to work at a regional one before moving to a national company. companies) and those that move people (passenger transportation companies). The largest of the shipping companies integrate several types of transportation services to offer clients efficient door-to-door service, thanks to just-in-time technology and containers that allow goods to be transferred seamlessly from ships to railroads to trucks (called “intermodal” transport).

Here’s how the two sides of the transportation industry look when broken down by type of vehicle used:

The biggest shipping players in this segment—DHL, FedEx, and United Parcel Service—integrate air transportation with other types of transportation. On the passenger side, the airline industry has consolidated since it was deregulated in 1978. American, Continental, Delta, Northwest, and United earn more than half of U.S. airline revenue. The remainder of this sector comprises regional carriers, which fly people between rural areas and larger airports, and low-cost carriers like JetBlue and Southwest, which are faring much better than the big passenger airlines when it comes to the bottom line—and are a substantial reason for the major carriers’ recent financial woes.

Ship

Rail Freight trains carry mainly coal, grain, and lumber. After a period of intense consolidation in this segment, the four leading companies are BNSF Railway, CSX, Norfolk Southern, and Union Pacific. Passenger rail transportation in the U.S. is dominated by the federally funded Amtrak, which makes stops in 45 states. Amtrak has long been a financial black hole, and seems to be in constant danger of losing funding and ceasing to exist.

Logistics

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Careers

At the most basic level, the logistics sector of the transportation industry makes sure everything runs on time. Logistics professionals see to it that people and freight get from place to place when they’re supposed to, and that they don’t hold up the next leg of the trip that’s waiting on their arrival—for example, that airline passengers changing planes at airline hubs arrive on time to catch their connecting flights, or that an ocean freight shipment arrives in port in time to be transferred to the railway that’s going to move it across the country before the train is scheduled to depart. Most large transportation companies have significant logistics departments to oversee these matters; in addition, a number of sizable companies that don’t own ships, trucks, and other means of transportation handle the logistics details for the companies that do. Examples of these logistics handlers include C.H. Robinson Worldwide and Expeditors International of Washington. Other outfits

Industries

About three-fourths of all maritime shipping is transoceanic, including tankers that carry mostly petroleum. The biggest shipping companies are based outside the U.S.: Taiwan’s Evergreen Marine, Japan’s Nippon Yusen Kabushiki Kaisha, and Denmark’s A.P. Møller-Mærsk move enormous numbers of containers. Although the federal government is revitalizing U.S. performance in this segment through the use of advanced technology, job opportunities are generally better at the foreign companies. Passenger transportation, which accounts for less than 5 percent of total water transportation revenue, encompasses ferries and cruise ships. Carnival is easily the biggest cruise company in the world. The ferry business isn’t as consolidated as the cruise business, with most companies owned regionally. Both businesses are expected to grow slowly in the coming years.

The trucking industry carries 80 percent of all consumer goods. The biggest players here are integrated-transportation parcel-delivery companies such as DHL, FedEx, and UPS. This sector includes trucking companies like Schneider National and Yellow Roadway as well as truck rental companies such as Amerco (best known for its U-Haul trucks). On the passenger side, the biggest bus company in the U.S. is Greyhound, which also offers express package delivery.

Introduction

Airplane

Truck and Bus

Industries and Careers for MBAs

Top Transportation Companies

Industries

Introduction

Company

2006 Revenue ($M)

1-Year Change (%)

Employees

Deutsche Post (including DHL Worldwide)

83,599

46.2

507,641

United Parcel Service

47,547

11.7

428,000

A.P. Møller-Maersk

45,431

37.4

110,000

FedEx

35,214

9.0

260,000

AMR

22,563

8.9

86,600

UAL Corp.

19,340

11.3

55,000

Delta Air Lines

17,171

6.1

51,300

Union Pacific Corp.

15,578

14.7

50,739

BNSF Railway

14,811

15.34

41,000

Continental Airlines

13,128

17.1

43,770

Northwest Airlines

12,568

2.3

30,000

YRC Worldwide

9,919

13.5

66,000

CSX Corp.

9,566

11.0

36,000

Norfolk Southern Corp.

9,407

110.0

30,000

Southwest Airlines

9,086

19.8

32,664

Enterprise Rent-A-Car Co. (1)

8,230

11.2

61,000

Hertz Global Holdings

8,058

7.9

31,500

C.H. Robinson Worldwide

6,556

15.2

6,782

Ryder System, Inc.

6,307

9.9

28,600

Avis Budget Group

5,689

–68.8

30,000

Careers

(1) 2005 figures Sources: Fortune 500; Hoover’s; WetFeet analysis

that contract to handle logistics for transportation companies include Kuehne + Nagel International, Schneider Logistics, and DHL Worldwide. This sector also includes warehousing companies, such as Preferred Freezer Services, which provide warehousing services for transportation companies. 84

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Key Jobs for MBAs There are a lot of different people doing a lot of different jobs in transportation, so qualifications for entry-level positions vary. In general, even though training programs exist at all levels, the more advanced positions nearly always require an MBA or

prior experience in the field. Many insiders say that sales is the quickest way into transportation; once you’re in the industry, it’s possible to jump from one career track to another.

Logistics personnel manage the movement of people and goods—they make sure the planes and trains arrive and leave on time. At the field level, dispatchers schedule pickups and deliveries. In more strategyintensive positions, logistics people use computer systems to track shipments around the globe, or to limit the length of time products stay in warehouses or distribution centers. Jobs in logistics generally call for a college degree or military experience; some positions require an MBA. Salary range: $40,000 to $90,000

Marketing

Additional Resources American Society of Transportation & Logistics (www.astl.org) Transportation Industry/Internet Resources (www.nauticom.net/www/pdi/resource.htm) U.S. Department of Transportation (www.dot.gov)

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People in marketing promote their company to current and potential clients and investors. Most often, marketers cite either their companies’ lower prices or the efficiencies their companies can bring to shipping processes. An insider stresses the importance of imagination, strategic thinking, and keen perception for people in these jobs. A college degree is required, as is a marketing portfolio. Salary range: $30,000 to $100,000 or more

Industries

Sales is the quickest way into transportation, according to many insiders; once you’re in the industry, you can jump from one career track to another.

This is an industry that employs some ten million people in the U.S. If you want to hop aboard, however, you should keep some things in mind. For many positions, you’ll need to join a union— and in recent years, strikes and other labor disputes have been a part of life in the industry (just ask American Airlines, Northwest Airlines, UPS, and workers and management at U.S. ports). Old-line airlines in particular have been putting downward pressure on jobs as they try to fend off or emerge from bankruptcy. Logistics, which involves planning and managing efficient transportation for everything from individual shipments to entire fleets of trucks or planes, has been growing in recent years as IT advances have swept the industry. Today, it’s possible to track shipments by satellite and thus improve the efficiency of the transportation and shipment process, and ongoing advances in technology should make this an area of strong job growth. In the air transportation sector, the globalization of business and the fact that waves of baby boomers are starting to retire from the workforce (many with healthy retirement accounts) both point to growth in the future, even though consumer airlines are currently struggling because of terrorist threats. On a macro level, the U.S. Bureau of Labor Statistics expects the number of jobs in this sector to grow more slowly than the overall job market between 2004 and 2014. The number of jobs in the truck transportation and warehousing sector, however, will grow at about the same rate as jobs overall during that time, according to the Bureau.

Introduction

Logistics

Job Prospects

Industries and Careers for MBAs

Careers

Industries

Introduction

Venture Capital Industry Overview The venture capital (VC) industry is a major shaker in the U.S. economy, funding companies developing technological and service innovations long before they become mainstream. A study by economic consulting firm DRI-WEFA showed that from 1970 to 2000, venture capital–backed companies had approximately twice the sales, paid almost three times the federal taxes, generated nearly twice the exports, and invested almost three times as much in R&D as the average non-VC-backed public company per each $1,000 of assets. Those are impressive results for what insiders describe as a “cottage” industry. Underneath their moneyed mystique, venture capitalists are essentially glorified middlemen, and their modus operandi is easily explained. In a nutshell, a VC firm acts as a broker for institutional or “limited partner” investors such as pension funds, universities, and high-net-worth individuals, all of whom pay annual management fees to have their money invested in high-risk, high-potential-yield startup companies. After amassing a certain sum from the limited partner investors—usually between $10 million and $1 billion—the VC firm parcels out the fund to a portfolio of fledgling private companies, each of which hands over an equity stake in its business. In other words, the VC industry is predicated on a simple swap of the VC’s financing for an ownership stake in the company’s success, often (but by no means always) before the company has begun generating revenue. Acquiring VC funding when they were still baby businesses nourished some of corporate America’s greatest success stories—Apple, FedEx, Intel, and Sun Microsystems, to name a few. Since the VC firm has a vested interest in its startups’ success, partners will generally sit on several boards of directors, offering advice and additional resources to help businesses grow. In the event that 86

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one of its startups merges with or is bought out by a larger company or goes public, any windfall is divvied up among the financed company, the VC firm, and the limited partner investors. Typically, the VC firm distributes 70 to 80 percent of the return on its investments to the various limited partners and keeps the rest for itself.

Trends Fundraising Rates Up In the first quarter of 2007, venture capital firms invested $7.1 billion in 778 deals, which represented the highest quarterly amount since the fourth quarter of 2001. It followed a spectacular year in which VC firms invested $25.5 billion, the highest amount in five years. “While top-line investment levels in 2006 were relatively steady overall, the increases in investment were in all the right places: early-stage investing, firsttime financings, and industry sectors such as clean tech and life sciences that have room to scale,” said Mark Heesen, president of the National Venture Capital Association, in February 2007. “And while there is considerable growth in these areas, we are pleased that, to date, quarterly investment levels have remained prudent and no major overfunding has occurred.”

The IPO Holds Steady POs held their own in 2006; the number of companies going public was much higher than from 2001 to 2003. Insiders suggest that Sarbanes-Oxley compliance and the demand for larger deals have slowed the IPO process, and that acquisition has become a more compelling exit strategy for its relative ease and promise of solid returns. But the second quarter of 2006 showed a strong surge, with 19 venture-backed companies raising $2 billion through IPOs—a 90percent increase from the first quarter of 2006 (when only ten venture-backed companies went public) and nearly double the volume of a year earlier. In the second quarter of 2006, life sciences led with nine venture-backed IPOs raising a total of $452.2 million, the largest being Northstar Neurosciences, a Seattle, Washington–based medical device company backed by

Hot Sectors Look for some new sectors to draw an increasing amount of attention. The digital (or “smart”) home (in which heating and air conditioning, appliances, lighting, and so on can be remotely controlled), nanotechnology, and alternative energy all represent areas ripe with possibilities for innovation. What’s known as “Web 2.0”—including wireless technology, social networking, gaming, and entertainment—is another hot sector. Life sciences should remain strong. Geographically, China and India are getting quite a bit of attention, and while there’s not yet a lot of investment in those countries, VCs are looking at them as potential markets for their companies’ portfolios.

There are many kinds of players in the VC world, from traditional VC firms to funds operated by publicly owned corporations. Some are tightly focused—by stage of investment, region, or type of industry—but most have a much broader scope. Here’s a rough breakdown of the industry:

Private VC Firms (Early- to Middle -Stage Investments)

These firms, many of which also operate at the seed level, fund companies that are already established— those that have a product, sufficient employees, and perhaps even revenue. At these stages, firms inject more capital into the company to help it become profitable so it will attract enough interest to either be acquired by a larger company or go public.

Growth Buyout Funds Some VCs have moved into growth buyouts of larger private companies or divisions of public companies. These funds invest larger amounts of capital—up to $100 million—in exchange for a significant minority or majority position in the company. By focusing on stable, growing (and often profitable) companies, buyout funds don’t have to wait long before they can cash in on the company’s IPO or sale. There’s less risk—unless market factors cause the delay of an IPO, for example. The funded company and its earlier investors gain credibility on Wall Street from a prestigious late-stage investor come IPO time.

Look for new sectors to draw increasing attention. The digital (or “smart”) home, nanotechnology, and alternative energy are areas ripe with possibilities for innovation. WETFEET INSIDER GUIDE

Careers

Firms in this segment follow the classic VC model: Find an entrepreneur with a great idea and business plan, sprinkle with cash, bake for several years, and sell for a hefty chunk of change. Early-stage (or seed) investments are the riskiest, since many startups tank. But they often provide the highest returns, since investors coming in early can pay a lower price for a given share of equity. In the 1990s, as many traditional VC firms started to focus on middle- and late-stage investments, seed financing increasingly became

Private VC Firms (Middle- to Late-Stage Investments)

Industries

How It Breaks Down

the province of newer firms and angel investors— entrepreneurs or corporate executives who’ve made it big and have money to spend. Introduction

AEA Investors, Canaan Partners, Domain Associates, and Mayfield Fund. In the tech field, eight companies raised a total of $1.4 billion, the largest IPO being the $531 million offering from Vonage Holdings, backed by Bain Capital, Institutional Venture Partners, Meritech Capital Partners, New Enterprise Associates, and 3i.

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Industries and Careers for MBAs

Introduction

Financial Services Firms Where there’s money, of course, you’ll find I-bankers. Banks such as Morgan Stanley and Citicorp will invest in the later stages. The aim is pretty much the same as that of the VCs: to make a killing through either an IPO or an acquisition.

Corporate Funds As opposed to private funds, whose primary goal is monetary gain, corporate funds have the added goal of strategically investing in companies whose business relates in some way to the corporation’s own. For example, Microsoft invested in Qwest Communications—a telecom company that was building a fiber-optic network—to help it deliver NTbased software.

Industries

INSIDER SCOOP “The way to gain access to this industry is to do something great that’s visible to people in the industry. There’s not a lot on your resume that will tell whether you’ll do well in venture capital.”

Key Jobs for MBAs Staffing needs and titles vary greatly from one venture capital firm to the next. Many funds consist solely of partners and support staff. Others hire a limited number of undergraduates and MBAs as analysts and associates, with the expectation that most will leave to get their business degrees or join startups within a few years. (Keep in mind that while the terms “analyst“ and “associate” usually refer to undergrads and MBAs or experienced hires, respectively, at some firms the titles are reversed.)

Careers

VP or Associate Some firms hire MBAs or people with business experience (usually in leveraged buyouts or investment banking) as vice presidents or associates. Associates screen business plans, make cold calls on prospective investments, and on occasion make onsite visits to portfolio companies. At this level, compensation, while 88

W E T F E E T I N SIDER GUIDE

still tied to the overall performance of the fund, can take the form of a flat bonus rather than a percentage of the fund. Salary range: $75,000 to $250,000, including bonus; VPs earn at the higher end

Junior Partner Junior partners are just that: junior versions of the general partners. Usually, junior partnerships are viewed as training for general partnerships, and junior partners perform duties similar to those of partners, albeit on a reduced scale. Also reduced is their personal stake in the fund itself. Salary range: $150,000 to $300,000, plus a limited amount of “carry,” or percentage of profits

General Partner These are the people with their names on the door. General partners raise the money for the fund and make the final decisions on which companies to invest in. General partners, the professional members of a venture capital firm, are usually required to contribute a small amount of their own money to their fund. They manage the fund’s investments and generally take a 20- to 30-percent cut of the carry from the fund. General partners are expected to provide a wealth of business advice and industry contacts to the entrepreneurs they back. They often sit on the boards of many companies, and are deeply involved in decisions about exit strategies—that is, when to cash out by taking a company public or selling it. Salary range: $200,000 to $500,000 and up, plus the potential of millions in profits

Job Prospects Finding a job in venture capital isn’t hopeless, but it’s certainly not easy. “It’s hard to target,” says an insider. “There isn’t a formula you can control. It’s more ambiguous than getting a job at Procter & Gamble, or in management consulting.” Firms are selective, and finding a job requires good luck. Operating experience at a technology company is a must in today’s

Additional Resources Harvard Business School Venture Capital and Private Equity Club (www.hbs.edu/mba/studentlife/ clubs/venturecapitalprivateequity.html) National Venture Capital Association (www.nvca.org) PricewaterhouseCoopers MoneyTree Report (www. pwcmoneytree.com) Dow Jones VentureReporter (http://venturereporter.net)

Introduction

environment. “Go somewhere where you can build a base of judgment and behavior in business, and excel in some capacity,” says another insider. “Be the product manager of the best, newest PDA. It doesn’t have to be a small company. Interact with thought leaders, take risks, and succeed where there’s something to be gained.” Finally, if you’re hell-bent on a career in VC, don’t give up. “If you strategize and are smart about looking for the opportunities,” says one insider, “there will be some amount of opportunity for you to get in there.”

Top Venture Capital Firms Firm Draper Fisher Jurvetson

76

Menlo Park, Calif.

Intel Capital

74

Santa Clara, Calif.

New Enterprise Associates

71

Baltimore

Polaris Venture Partners

63

Waltham, Mass.

Kleiner Perkins Caufield & Byers

59

Menlo Park, Calif.

U.S. Venture Partners

59

Menlo Park, Calif.

Sequoia Capital

54

Menlo Park, Calif.

Oak Investment Partners

51

Westport, Conn.

Venrock Associates

50

New York

Austin Ventures

46

Austin, Tex.

Foundation Capital

45

Menlo Park, Calif.

Highland Capital Partners

44

Lexington, Mass.

Village Ventures

42

Williamstown, Mass.

Menlo Ventures

41

Menlo Park, Calif.

Sigma Partners

41

Menlo Park, Calif.

Benchmark Capital

41

Menlo Park, Calif.

Morganthaler Ventures

41

Menlo Park, Calif.

Canaan Partners

40

Westport, Conn. Source: PricewaterhouseCoopers MoneyTree Report

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Careers

Location

Industries

No. of Deals, 2006

Careers

3

Asset Management. ................. 92 Brand Management................. 95 Business Development. ............ 98

Corporate Finance................. 100 Marketing. .......................... 104 Operations. ......................... 107 Project Management.............. 110 Securities Sales and Trading..... 112

Supply Chain Management..... 115 Top-Tier Management. .......... 117

Industries and Careers for MBAs

Industries

Introduction

Asset Management Career Overview If money makes the world go round, Earth would grind to a screeching halt without the asset management industry. Asset management is the business of making money with money—or at least trying to. When we say “making money,” we’re not talking about salaries and bonuses (which can indeed be significant), but the gains you endeavor to make for investors who have forked over their cash in the hope that you, with your market savvy and keen instincts, can turn their nest egg into a fancy omelet with toast and hash browns on the side. Asset managers manage money—other people’s money, and lots of it. Generally, they convert that money into assets—stocks, bonds, derivatives, and other types of investments—and try to make it make more money as quickly as possible. Mutual funds hire asset managers; so do corporations, banks, and highnet-worth individuals. Asset managers use a combination of investment theory, quantitative tools, market experience, research, and dumb luck to pick investments —ranging from high-risk stocks to commercial real estate to cash accounts— for their portfolios in order to invest other people’s money wisely and profitably.

Careers

Requirements As an asset manager, you can’t just bet your hunches; the profession requires excellent quantitative and analytical capabilities. If you hate statistics, you may want to look elsewhere. But asset management isn’t only a matter of adding up the numbers. It requires the organizational skills—and nerve—to make split-second decisions with millions of dollars on the line. And though the profession has seen tremendous growth in the past decade, it’s still tough to break into. Sometimes MBAs work as fund managers right out of school, if they 92

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have a track record of success as both managers and investors. More often they start as analysts in order to prove thatthey have the right combination of caution and chutzpah to make a great asset manager. Competition for jobs is fierce at all levels, but if you have strong quantitative and analytical skills, good nerves, and a consistent history of beating the market, then there’s probably a place for you. Networking and a single-minded pursuit of your goal help, too. It’s also important to know a lot about the company interviewing you, and to show an intimate knowledge of its investment strategies. Analysts and researchers generally serve at least two years before they come up for consideration as fund managers. You’re more likely to get an asset manager position earlier if you run smaller portfolios for institutional asset managers or private banks that offer services to the wealthy. On the mutual fund side, you might become co–portfolio manager, sharing the management responsibility with a senior manager. The larger the pool of assets, the fiercer the competition. There’s no single prerequisite to becoming an asset manager. That said, virtually all successful asset managers possess the following:

Quantitative and Analytical Skills Asset managers have to be able to read spreadsheets and earnings reports. And they need to be able to take those numbers and crunch them into financial models and future projections. Even if you’re dealing with less volatile investments such as bonds or real estate, you have to do the math in order to stay ahead of conventional wisdom. Classes in accounting and statistics are a big help, as are jobs that require number crunching, from I-banking to management consulting.

Managerial and Organizational Skills Whether you’re a researcher or a fund manager, you’ll need to keep track of reams of facts in order to glean the really important information. Furthermore, you’ll have to be able to make decisions—and execute them—quickly and accurately. Delay can cost big money. Finally, if you work your way up to portfolio

Professional Licensing In general, asset managers who work behind the scenes and make the big decisions don’t require professional licensing. But you probably will if you’re dealing with the public at all, especially if you’re in a position to make “buy” and “sell” recommendations directly to a client. For example, you may need an NASD license (Series 7, 63, or 65), or a particular insurance license. Employers will generally give you the time to obtain such licenses once you’re hired, and may even pay the costs.

Career Tracks

Researcher Researchers gather the primary source material used to make investment decisions, such as SEC filings and quarterly earnings reports. When they start, they spend their time learning the philosophy of those running the portfolio. Researchers then work to ensure that the fund manager has the information necessary to make the decisions he or she needs to make with that philosophy in mind. As time passes, researchers are granted more independence and may even perform the kind of higher-level analyses that lead to actual decisions about buying and selling. Generally, researchers are hired straight out of undergraduate or B-school programs. MBAs, of course, enjoy better odds of getting hired and typically command better salaries. All candidates should have strong quantitative, analytical, and organizational skills.

Industries

Analyst Analysts take the work of researchers and apply higher-level financial modeling to make specific recommendations to portfolio managers about which securities to buy or sell. In addition to crunching numbers, they may conduct more subjective research, such as meeting with representatives of potential investment companies to assess management style. Or they may pick the brains of sell-side analysts at brokerages and other financial institutions to gather tips about specific investments and to gauge overall market trends. Seasoned analysts may even participate in developing overall investment strategies for their investment fund. WETFEET INSIDER GUIDE

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Careers

Mutual funds, such as Vanguard or T. Rowe Price, are perhaps the most visible road into asset management. Hedge funds—which specialize in high-risk, highreturn investments—also offer opportunities for would-be asset managers. Large investment and commercial banks, from JPMorgan Chase to Citibank, as well as private firms such as Soros Fund Management, offer private banking—that is, asset management for wealthy clients with very large private accounts. Some largescale investment institutions such as universities and retirement funds hire their own investment staffs, although often they rely on mutual funds and other investment management firms, such as Capital Group or Fidelity or the Capital Group, to make decisions for them. If you prefer real estate to stocks and bonds, you can work for a real estate investment trust (REIT) such as Cornerstone Properties (a subsidiary of Equity Office Properties). REITs operate like mutual funds, except that they buy and sell hotels and shopping malls rather than stocks and bonds. Finally, there are a number of boutique asset management firms that take money from small groups of clients and invest in specialized areas such as startup companies.

No matter what area you work in, asset management boils down to researching and analyzing potential investments and deciding exactly where to allocate funds. Of course, companies require a raft of other employees, including corporate managers, IT specialists, marketing and sales staff, and back-office people. But if you want to be on the front lines, where big investment decisions are made, you’ll fulfill one of these three functions:

Introduction

manager, you’ll need the ability to motivate and manage a talented staff of researchers and analysts. Without their coordinated efforts, you might not have all the information you’d need to make the best decision possible.

Industries and Careers for MBAs

Industries

Introduction

Fund Manager Fund managers are the people who decide what, when, and how much to buy or sell. They must work to ensure that their fund’s overall investment philosophy is borne out in actual investments, and be willing to change course midstream if their strategy isn’t working. They must also make sure their decisions are executed, which means following up on the work of traders and other agents. And of course they’re responsible for managing the work of researchers and analysts to ensure that the fund manager is receiving the best, most complete information possible. Besides poring over numbers, fund managers spend a great deal of time meeting with managers of companies they might invest in to make more subjective, managerial assessments. Finally, they may have to engage in a certain amount of marketing and public relations, such as helping to design sales strategies or talking to the press.

Asset management isn’t only a matter of adding up the numbers. It requires the organizational skills—and nerve—to make split-second decisions with millions of dollars on the line.

Careers

Job Prospects Anyone considering a career in asset management should be keenly aware that markets go not only up, but also down—sometimes way down. There was a time, in another century, when the markets were on a rocket ship to the moon. The year was 1999, and the entire financial industry was…well, partying like it was 1999. Everyone was a financial genius—even pimple94

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faced kids in junior high were expert stock-pickers. The hangover from all that partying made the financial services industry a much more sober place. The rookies were largely sidelined, and investments became once again the bailiwick of professionals. But the stock market has made a comeback in recent years. As of May 18, 2006, for instance, the Dow Jones Industrial Average was at 11,155, up 53 percent from its post-bust low of 7,286 in October 2002—but still below its January 2000 peak of 11,720. The S&P 500 Index (a broader look at market performance) clocked in at 1,265, up 63 percent from its post-bust low of 777 in October 2002—but, again, still lower than its boom-time peak of 1,527 in March 2000. As the market has improved, more money has poured into asset management and brokerage accounts. Indeed, stock-based mutual funds took in $177.5 billion in net assets in 2004, up 17 percent from the previous year and the largest annual inflow since 2000, according to the Investment Company Institute (ICI). In 2005, net assets in stock-based mutual funds increased by another $135.6 billion. The asset management and brokerage sectors are home to tons of jobs. According to the ICI, 146,250 people worked in the mutual funds sector at the end of 2005. That’s a lot of jobs. And in the securities industry overall, 795,700 people were employed at the end of February 2006, up 44,700 from the industry’s employment-level nadir in October 2003. In other words, companies are hiring. But the industry has recovered only about half of the 89,900 jobs it lost starting in March 2001, so don’t expect companies to be hiring at the same breakneck rate they were in the late 1990s. “I’d expect growth in the industry to be as fast as or faster than employment growth in the general economy,” says one recruiter. And if you do manage to find (and keep) a job in the industry, you can still expect to make a solid living and retain something of a life, particularly compared with the slave-labor existence of your investment banking peers.

Additional Resources

Brand Management Career Overview

If you’re considering a career in asset management, be keenly aware that markets go not only up but also down— sometimes way down.

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competition for shelf space is ferocious, so package design, marketing, and customer satisfaction are key elements. In brand management, you’re responsible for managing all of these elements as they relate to the brand to which you’re assigned. The basic analogy for brand management is that brands are treated like businesses within the company,

Industries

A formal definition of brand management is tough to pin down because the actual job description varies widely across the vast universe of consumer products companies. Many consumer products companies have at least one thing in common, though: They’re part of huge conglomerates that produce a variety of namebrand products. Size gives them economies of scale, and a diversity of products gives them protection against down cycles. That’s not to say that cute little mail-order pickle-and-jam companies don’t crop up every now and then and make a serious go of it. They do. But such outfits aren’t where the majority of the jobs are—at least not until Unilever or Nestlé takes them over. Success in consumer products (also known as packaged goods)—which is where most brand management careers are found—is all about marketing, often by promoting a brand name. The

Introduction

Knowledge@Wharton: Finance and Investment (http://knowledge.wharton.upenn.edu/category. cfm?cid=1) Institutional Investor (www.institutionalinvestor. com) Investor’s Business Daily (www.investors.com) The McKinsey Quarterly: Financial Services (www.mckinseyquarterly.com/Financial_Services) Ohio State University: Finance Site List (www.cob.ohio-state.edu/fin/journal/jofsites.htm)

Industries and Careers for MBAs

Industries

Introduction

and brand managers are essentially small-business owners. The job involves: • Monitoring the competitive landscape of the category in which your brand competes •

Developing strategies to exploit market opportunities

•

Executing those strategies with the help of a cross-functional team

•

Delivering the sales volume, market share, and profit projections for the business

Brand managers craft elegant business plans and submit them to senior management. Then, when the price of the key ingredient in their product goes through the roof because of locust plagues, they rewrite the business plans from scratch with many more contingencies. They focus on the minutiae of a daily sales-volume report, and they dream big dreams when it’s time to update the vision for the brand. They approach upper-level management for capital to fund a new product launch or a line extension in much the same way that small-business owners go to venture capitalists or banks to fund expansion.

Careers

Requirements Insiders tell us that successful brand management professionals are natural leaders who aren’t afraid to take the initiative, who are comfortable working with cross-functional teams to get results, and who can communicate their vision to others. This field draws on both creative and analytical skills, so be prepared to switch gears from one to the other. Brand management is considered part of the marketing function, and most aspiring brand managers have had some experience in advertising, promotions, or sales. However, consumer packaged goods companies are very interested in candidates who have honed their analytical and leadership skills in other disciplines, such as consulting, investment banking, or strategic planning. If you have no previous experience 96

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in marketing, a summer internship can be enormously helpful. Many companies offer summer internships that often result in a job offer after graduation. Recruiters look for leadership, analytical skills, problem solving, teamwork, and creativity. Most companies want candidates with at least a 3.5 GPA. The more work experience and leadership and teamwork background (in a school club, sports team, or volunteer activity) you can show, the better.

Career Tracks The career tracks at most companies feature plenty of opportunities for cross-functional experience and varied work assignments. At some companies, experience in functions other than marketing has become a prerequisite for advancement. Despite the flexibility in career path development, there are clearly defined entry-level positions, and MBAs enter as assistant brand managers. The path from assistant brand manager to brand manager is a progression from executing to developing strategy. Continuing along the path involves a shift from participating in cross-functional teams to leading them, and from monitoring a business budget to assuming profit-and-loss (P&L) responsibility. At some point along this path, most companies send aspiring managers out into the field for extensive sales training—also known as the reality check.

Assistant Brand Manager The assistant brand manager coordinates the various marketing functions, including packaging, advertising, promotions, and public relations, in order to execute the marketing plan. In this role, you’ll head up a number of crossfunctional teams that work on various parts of your business. For example, a product improvement project may bring together R&D, marketing research, packaging, finance, and operations. A change in your consumer promotion plan might require a coordinated effort between representatives from promotions and operations.

Assistant brand managers shift gears all day long. One minute they’re brainstorming new promotion ideas, the next they’re wading through monthly volume projections.

Marketing Director A marketing director is responsible for an entire business unit—guiding overall strategy by coordinating the efforts of brand managers and assistant brand managers, and ensuring that the brand teams remain focused on the key strategic issues. It’s your job to communicate with the executive wing, and to ensure that your brands receive the resources and capital they need to grow. Because you’re responsible for the business unit’s P&L, the workload can be heavy at times, but your generous compensation package justifies the effort.

Job Prospects

Brand managers who were able to hang onto their jobs through the recession have been forced to work with drastically reduced budgets, leaving them hardpressed to deliver the major product wins they need to advance their companies—and their careers. On the other hand, brand managers with specialized scientific or industry expertise may find they’re in a stronger position to land plum jobs with major ad agencies as the economy starts showing signs of life. Specifically, technical and health-care sector expertise will prove most valuable, as these industries will certainly be hiring.

Additional Resources Brandchannel.com (www.brandchannel.com) Brandweek (www.brandweek.com) Careers in Brand Management (WetFeet Insider Guide, available from www.wetfeet.com) Careers in Consumer Products (WetFeet Insider Guide, available from www.wetfeet.com) MarketingPower.com (www.marketingpower.com) WETFEET INSIDER GUIDE

Careers

According to the 2006–07 Occupational Outlook Handbook from the U.S. Bureau of Labor Statistics, employment in the field of marketing overall is expected to increase faster than average—at an 18- to 26-percent clip—through 2014. The Bureau says this

Brand managers craft elegant business plans. Then, when the price of the key ingredient in their product goes through the roof because of locust plagues, they rewrite the plans from scratch. Industries

Insiders describe this role as being captain of a ship, guiding your cross-functional crew through such treacherous waters as annual plans, new product launches, competitive analyses, promotional strategies, and capacity planning at your production facilities. The safe port you’re steering toward consists of the volume, market share, and profit targets for your brand—you now own the bottom line on P&L for your business. You also take on additional responsibilities at the business unit, division, or corporate level. These responsibilities might range from serving on a companywide task force that’s reviewing trade spending across different brands to leading the recruiting team at your alma mater. You’re also responsible for the performance of the marketing analysts and assistant brand managers who work on your business.

Introduction

Brand Manager

sustained job growth will be supported by increasingly intense domestic and global competition in consumer products and services, but it cautions that budding marketers should expect increased competition for full-time corporate marketing positions as marketing projects (including brand management) are increasingly outsourced to ad agencies and contract specialists.

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Industries and Careers for MBAs

Business Development

its focus on strategy, biz dev charts the direction of a company—the deals forged today determine what the rest of the company will be working on tomorrow.

Career Overview

If you’re interested in business but don’t want to go the consulting or investment banking routes, biz dev may be a good alternative. The best way to get into business development is by first gaining experience in finance, consulting, or corporate sales. The minimum degree requirement for an entry-level position is a BA or BS. For more senior positions, an MBA is often preferred, along with five or more years of previous biz dev or sales experience. Biz dev positions at high-tech companies may require a technical background, or sales experience in a related field. Strategic planning and corporate development positions usually require a minimum of two years’ experience in similar areas. Networking with friends or alumni will give you an advantage. If you’re asked in for an interview, be ready to demonstrate your knowledge of the company’s business and show that you’re familiar with its competitive landscape. Be sure to play up any experience you have in closing deals or managing relationships. And remember that recruiters will be seeking a keen eye for detail, solid communication skills, and analytical ability.

Business development (biz dev for short) is exactly what it sounds like: It involves figuring out how to build or develop a business. You can find business development jobs in all industries, at all kinds of companies, from tech startups to huge pharmaceutical conglomerates. What the work entails depends on how established a company is and what its business model is. Business development people constantly ask: “What ten things will have the biggest positive impact on my company’s business, and how can we make them happen?” Their objective is to expand their company’s market reach or revenue in ways that make the most of the company’s resources and capabilities. Biz dev executes company strategy by making deals with complementary businesses. Exactly what that means varies from company to company. A deal might be a cobranding initiative, a technology- or contentlicensing arrangement, an e-commerce partnership, or some combination of the three. Business development involves varying degrees of sales and strategy. In some companies, biz dev people may focus on getting new corporate sales accounts, while in others they may lead new product development. At larger companies such as Cisco, Microsoft, or Time Warner, one of biz dev’s many responsibilities may be to decide which smaller outfits the company should acquire next to ensure that it retains its market strength in the future. Working in biz dev is an excellent way to become adept at business strategy while gaining handson experience in negotiating deals and managing relationships with partners. Business development jobs are also highly cross-functional, requiring close collaboration with various internal and partnercompany teams, such as sales, engineering, and marketing, to ensure that a deal is consummated. With 98

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Requirements

Career Tracks In order of increasing sophistication, the three overlapping layers within business development are sales, partnerships, and strategic planning. Most biz dev jobs blend all three, although one area may be emphasized.

Sales At some companies, business development might be better described as business-to-business sales. In many cases, the biz dev team and sales team are one and the same. Cold-calling, or prospecting for potential clients, members, or partners, is a task that frequently falls to entry-level biz dev employees. These people often

Brand managers with specialized scientific or industry expertise may find they’re in a stronger position to land plum jobs with major ad agencies as the economy starts showing signs of life.

Companies of all sizes in all industries are building their businesses around partnerships—and it’s biz dev’s responsibility to initiate and manage such relationships. One of the biggest challenges facing business developers is negotiating the terms of partnership deals. Getting another company interested in a partnership is just the beginning; drafting a contract and negotiating its terms is a process that can drag on for months. Once both parties sign the contract, biz dev must work with other teams in the company (such as product management, marketing, and operations) to make sure the terms of the partnership are met successfully.

Some business development jobs aren’t called that at all. Instead they’re called “strategic planning,” or sometimes “corporate development.” Strategic

Job Prospects In the long term, business development opportunities should grow, especially in expanding industries such as pharmaceuticals, biotech, and technology. The growth in biz dev careers is being driven by a variety of factors. For one thing, the increasing use of the Internet for and by businesses means that there are more opportunities for Web-based partnerships and business activities. At the same time, there’s a growing need for biz dev types to seek out and close business deals in new markets. And as companies increasingly strip WETFEET INSIDER GUIDE

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Strategic Planning

Industries

Partnerships

planning jobs are found mostly at large, established companies seeking to expand and diversify their business. Just like management consultants, strategic planners spend a lot of time thinking about top-level strategy issues such as what new business activities their company should pursue, how the company should position itself and market those activities, and which technologies the company should invest in. At some companies, strategic planning may be carried out by the corporate finance department. In such cases, biz dev jobs may resemble investment banking functions such as mergers and acquisitions. For instance, if a company wants to acquire a new business unit, strategic planning may analyze the market to find a suitable business to acquire, determine an appropriate asking price for the company, and follow through on the negotiation process. If the acquisition takes place, strategic planning may help integrate the two companies. This task can be as simple as processing a stack of paperwork or as complex as relocating and reorganizing the activities and personnel of the two companies. Strategic planning may also involve institutional investment—that is, parceling out the company’s money to fund outside startups. In this way, strategic planning can be somewhat like working in the venture capital industry. For example, when hightech companies invest in high-tech startups, strategic planners may perform due diligence on potential partners, determine how much to invest in a particular venture, and negotiate a stake in a company.

Introduction

have to hone their own sales pitches to convince other companies that a partnership would add value to their businesses. As in traditional sales jobs, there can be an account management aspect to business development— coordinating a variety of partner relationships and deal types, each at a different stage.

Introduction

Industries and Careers for MBAs themselves down to only their core components, they rely on business development to transact the deals that allow them to outsource noncore business functions. Recently, job seekers looking for biz dev positions have found themselves in an extremely tight market. But as the economy improves, we’re already seeing

Biz dev recruiters seek a keen eye for detail, solid communication skills, and analytical ability.

Additional Resources Justsell.com (www.justsell.com) The McKinsey Quarterly: Strategy (www.mckinseyquarterly.com/Strategy) National Association of Sales Professionals (www.nasp.com)

Careers

Industries

growth in biz dev career opportunities. Those with an aptitude for landing and structuring deals—such as lawyers or investment bankers— have the best shot at landing the best business development jobs.

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Corporate Finance Career Overview If you work in private enterprise, your company measures its success at the end of the year by comparing how much money it made with how much it spent. If it made more than it spent, it was a good year. If it made less, it was a bad year—or the company is in an investment phase (in other words, it spent more than it made because the company and its investors believed it would realize a profit in the near future).This career profile focuses on opportunities in corporate finance and accounting in private industry. People who work in corporate finance and accounting are responsible for managing a company’s money—forecasting where it will come from, knowing where it is, and helping managers decide how to spend it in ways that will ensure the greatest return. Accounting concerns itself with day-to-day operations. Accountants balance the books, track expenses and revenue, execute payroll, and pay the bills. They also compile all the data needed to issue a company’s financial statements in accordance with government regulations. Finance pros analyze revenue and expenses to ensure effective use of capital. They also advise their company about project costs, make capital investments, and structure deals to help the company grow. In spite of their different roles, finance and accounting are joined at the hip: The higher levels of accounting (budgeting and analysis) blend with financial functions (analysis and projections). Thus, finance and accounting are often treated as one, with different divisions undertaking particular tasks such as cash management or taxes.

Requirements

Although conditions vary at different companies, people going into corporate finance generally start their careers either as staff accountants (for the corporate reporting function) or as financial analysts (for a business group or function). In both roles, you’ll supply management with the information it needs to make smart, opportune decisions. Staff accountants consolidate information for the official corporate financial reports—primarily comparing the present with the past. Financial analysts, on the other hand, are assigned to either a product line or a business unit. They help management set up profit objectives, analyze current unit results, and anticipate future financial performance. Eventually, both financial analysts and staff accountants specialize in one of the areas described below.

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Careers

Many firms hire outstanding MBAs for training programs: Some are finance- and accounting-specific, and others rotate trainees throughout the company. If you have your heart set on corporate finance and analysis, do a knockout job during that particular rotation and develop a good relationship with your manager. If a company has no formal program, you’ll have to make the most of on-the-job training, so try to find a position that will expose you to a variety of projects. Determine your company’s corporate finance career path, and cultivate a mentor. A mentor can explain

Career Tracks

Industries

The increasing use of the Internet for and by businesses means there are more opportunities for Web-based partnerships and business activities.

what projects will round out your background and recommend courses you can take to prepare yourself for a higher-level assignment. You can also check out job listings on the Web to see what kinds of experience and certification are required for the positions you’re interested in. If you want to pursue a lifelong career in this field, you’ll probably have to knuckle down and get an advanced degree or certification—possibly a CPA or CFA—at least to work in the more senior budgeting, planning, and strategy functions. You’ll also need to keep track of the regulatory changes that affect how information is reported. There are other ways in: Experience with an investment banking firm can lead to a financialanalysis position for a specific business line, or to a corporate development position if you have several years of experience. At the higher accounting tiers, one of the most straightforward routes to becoming a controller (a supervisory accounting role) is to start working for one of the large accounting or auditing firms and then go into corporate finance.

Introduction

Finance and accounting jobs require critical, detailoriented thinking. If you have a knack for crunching and analyzing numbers to understand patterns that influence business, you’ll be valuable to a company— otherwise this won’t be the right job for you. You should also be good at—and like—solving problems, and be able to think critically about the numbers you’re working with. Finally, if you can effectively evaluate business scenarios and recommend a course of action based on quantitative research, finance may be just the career for you. Internships are always a great way to strengthen your resume and differentiate yourself from other candidates. An MBA will make you attractive to companies hiring for budgeting, planning, and strategy functions.

Industries and Careers for MBAs

Introduction

General Accounting General accountants are responsible for producing all of the financial records a company uses to track its progress internally and to meet government regulations. Such workers also gather all the information needed to compute a company’s balance sheet, profit-and-loss statements, and income statements. In addition, they track the corporate budget and cash flow, and pay all the bills. Your first job in general accounting will likely be in accounts payable or accounts receivable. Success in accounting might lead you to a position as a controller—overseeing a larger group, aggregating information, and/or working on portions of the corporate budget.

Industries

Internal Audit To most people, an audit means an outside audit— a large accounting firm like Ernst & Young checking the corporate books on behalf of the shareholders. However, most large companies have an internal audit group that regularly visits individual company branches and checks the company’s accounting systems. Internal auditors perform investigative and corrective work to ensure that that external auditors won’t find anything amiss. The internal audit group reviews the quality of the data, making sure it’s both accurate and complete. Internal auditors also evaluate whether the corporate accounting procedures are effective and universally followed. Finally, internal auditors introduce or revise procedures to improve efficiency and reduce costs.

Careers

Divisional Financial Services In this area, you’ll work with each division’s business team to prepare financial plans, make forecasts, and compare actual financial results with forecasts. You may also evaluate the financial consequences of alternative strategies.

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Responsibilities include everything from analyzing new business opportunities to restructuring a business or developing a capital-spending program. The primary concerns are reducing costs, finding better ways to use company assets, and researching methods for developing better forecasts. Financial services evaluates the risks vs potential return for any course of action, and develops recommendations so that managers can pick the most profitable strategies, for their goals.

As accounting functions increasingly become automated, accountants and financial analysts able to think strategically will have better prospects than those who stick to keeping the books.

Taxes Activities in this area involve administering taxes (that is, paying taxes on time—or finding loopholes to avoid paying them) and determining ways to decrease the company’s tax burden. Responsibilities include working with attorneys on tax litigation, researching tax laws and reporting requirements by country (if the company is international), and keeping up with new government rules and regulations. Large companies have an entire department dedicated to recommending methods for minimizing the tax impact of any business decision—a new division launch, a capital-spending plan, an acquisition, and so on. Investments and pensions also need to be managed with an eye toward minimizing taxes. The tax department helps structure transactions, makes recommendations on the timing of acquisitions

or sales based on what else will be written off that year, and proposes the corporate reporting structure that will reduce taxes—for example, creating a wholly owned subsidiary rather than an internal division.

The treasury department is responsible for all of a company’s financing and investing activities. This group works with investment bankers who help the company raise capital with stock or bond sales or expand through mergers and acquisitions. Treasury manages the pension fund and the corporation’s investments in other companies. The department also handles risk management, making sure the right steps are taken to safeguard corporate assets by using insurance policies or currency hedges.

Corporate Development and Strategic Planning Corporate development involves both corporate finance and business development. Finance experts in corporate development study acquisition targets, investment options, and licensing deals. Often they determine the best companies to buy or invest in, such as pre-IPO cutting-edge technology outfits with complementary products that could either extend the company’s product line or neutralize a potential future competitor. Corporate development jobs require planning and analysis know-how and the kind of skills that investment bankers working merger and acquisition deals put to use.

Industries

If you have a knack for crunching and analyzing numbers to understand patterns that influence business, you’ll be valuable to a company—otherwise this won’t be the right job for you.

This is a company’s piggy bank. The cash management group makes sure the company has enough cash on hand to meet its daily needs. The group also sees to it that any excess cash is invested overnight by picking the best short-term investment options. And it negotiates with local banks to get regional business units the banking services they need at the best price.

Introduction

Treasury

Cash Management

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Industries and Careers for MBAs

Industries

Introduction

Job Prospects In the short term, the outlook for people in corporate finance and in-house accounting is brightening: After several years during which corporate hiring was quite slow, the economy is now picking up, which means more corporate spending, more mergers and acquisitions, and so on—and more work in corporate finance. In the longer-term, globalization means more opportunities for sophisticated financial analysts and planners. Increased marger-and-acquisition activity will create more opportunities for people in finance who are able to think strategically. That means greater demand for people with higher degrees who can devise more theoretical financial models, develop currency hedges, or estimate another company’s future earnings and current value. As more and more accounting functions become automated by software, accountants and financial analysts able to do analytical work and think strategically will have much better prospects than those who stick to keeping the books. Graduate degrees, extensive analytical experience, and good regulatory knowledge will help keep you employed over the long term.

Additional Resources

Careers

CFO.com (www.cfo.com) Institutional Investor (www.institutionalinvestor. com) Investor’s Business Daily (www.investors.com) Knowledge@Wharton: Finance and Investment (http://knowledge.wharton.upenn.edu/category. cfm?cid=1) The McKinsey Quarterly: Financial Services (www. mckinseyquarterly.com/Financial_Services) Ohio State University: Finance Site List (www.cob. ohio-state.edu/fin/journal/jofsites.htm)

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Marketing Career Overview If you’ve ever watched a clever television ad and thought, “I could do that,” be advised: There’s far more to a marketer’s job than meets the eye. What you don’t see on TV are the careful demographic and statistical analysis, extensive testing and surveys, supply and vendor management, and strategic thinking that go into every word uttered on your television—a process that often takes specialized expertise and months of teamwork to complete. If your creative genius is matched by your analytical acumen, you may find that marketing makes for a worthy challenge and an exciting career.

INSIDER SCOOP “Marketers think with their left and right brains in equal proportions.” The uninitiated may mistakenly equate marketing with peddling household products, but marketers know that their roles are far more complex and engaging than that. They help their company anticipate the public’s needs and position it to satisfy those needs. As such, marketing is the necessary link between a company and its target audience, which is broadly defined to include customers, clients, investors, and partners. Generally speaking, marketing is the intermediary function between product development and sales. In a nutshell, it’s the marketer’s job to ensure that consumers look beyond price and functionality when weighing their consumption options. Marketers create, manage, and enhance brands. (A brand can be thought of as the way consumers perceive a particular company or its products, and how a company reinforces or enhances those perceptions through its overall communications—its logo, advertising, packaging, and so on.) Marketers want the consumer to ask: “Which brand will help me look and feel my best? Which brand can I trust?” Their

Some companies’ definitions of marketing positions are broad, encompassing everything from market research and strategy to advertising, promotions, and public relations. Other companies have large marketing departments, with marketers dedicated to one of those roles. And still other companies contract out many marketing functions to firms that specialize in advertising, public relations, and market research. What follows are descriptions of some common marketing roles.

Market Research For a company to capture a market, first it must understand itthe market. Whether the intended target for the product is individual consumers or businesses, the company must know what motivates consumers, what their needs and purchasing habits are, and how they view themselves in relation to the rest of the world. Market researchers use surveys, studies, and focus groups to collect data on a brand’s target. Some companies have their own market research divisions. Others hire specialized firms to conduct research for them. Ideally, market researchers should have both qualitative and quantitative analytical ability, because their job depends on gathering data from human subjects as well as crunching numbers and interpreting the results. WETFEET INSIDER GUIDE 105

Careers

Marketing people come from many different academic backgrounds, but certain backgrounds will help more than others. For an advertising position, a degree in advertising, communications, or graphic design may open the most doors. If you’re interested in getting into brand management or market research, an education that includes courses in business, economics, or statistics will serve you well. A marketing career of any kind requires a sharp, analytical mind; strong oral and written communication skills; and a keen interest in business and consumer behavior. Marketers keep the inventors of career aptitude assessment tests like MeyersBriggs up at night, defying test typologies with their statistically unlikely combination of abilities in analysis and creativity, intuition and logic, people skills, and comfort with numbers. Marketing professionals “can understand numbers and people,” says one insider. “They listen for subtexts when people talk, and are able to interpret people’s emotions; this is what drives

Career Tracks

Industries

Requirements

people to become marketers and makes them good at what they do. Marketers have to identify what people are implicitly saying but not explicitly stating, and deliver against those needs.” The best way to get into marketing, regardless of what you’ve studied, is by taking an internship. Many PR firms, ad agencies, and high-tech and Internet companies offer marketing internships. Internships at consumer products companies may be easier to come by for MBA students than others. The large consumer products companies recruit at select schools, and the best way to get hired by one of them is through oncampus recruiting. For PR, advertising, and marketing positions in other industries, your best bet may be to network or to contact companies directly.

Introduction

goal is to make the brand they represent the obvious and uncontested answer to those questions in the consumer’s mind. In marketing terms, this is called “owning mindshare.” Of course, a brand can’t be all things to all people. A key part of a marketer’s job is to understand the needs, preferences, and constraints that define the target group of consumers (who may share a common geographic region, income level, age range, lifestyle, or interest) or the market niche corresponding to the brand. How can a company aggressively expand its market share and keep customers satisfied? That question is central to everything a marketer does. Marketing is a function at every company in every industry. In the consumer products industry, marketing (called brand management) is the lead function. In other industries, marketing may play a supporting role. At a high-tech company, for instance, marketing may support research and development. And in advertising, market research, and public relations, marketing is the industry.

Industries and Careers for MBAs

Introduction

Advertising In broad terms, an advertising agency is a marketing consultant. It helps the client with all aspects of its marketing efforts—everything from strategy to concept to execution. On the business side of advertising (as opposed to the creative and production sides), most jobs fall into account management, account planning, and media. People in account management act as liaisons between the agency’s various departments and the client. They manage the execution of ads by making sure the ads are created within the allocated schedule and budget. Account planners focus on consumers, conducting research on the target demographic to get to know what motivates its behavior in the marketplace. In the media department, planners use that demographic data to decide where to place ads, and buyers purchase the ad space.

Industries

Promotions Companies in which marketing is a particularly strong function may have a dedicated promotions staff to create programs that align advertising with purchasing incentives such as coupons, special discounts, samples, gifts, rebates, or sweepstakes. For its promotions, the staff may use direct mail, telemarketing, advertisements, in-store displays, product endorsements, or special events.

Careers

Public Relations Public relations personnel manage communications with the media, consumers, employees, investors, and the general public. They’re the spokespeople for their own company, or for client companies if they work for a public relations firm. They may write press releases to promote new products, or to inform the investment community of financial results, business partnerships, or other organizational news. If they’re in media relations, they may respond to information requests from journalists, pitch stories to the media, or even ghostwrite op-ed pieces about the company.

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In general, the goal of the public relations specialist is to portray the company in a flattering light, publicize its products and services, uphold its public image in a crisis, and generate positive buzz around its business and corporate practices.

After a few brutal years, marketers’ job prospects are looking up. As other industries recover from the recent recession, marketing spending is sure to increase— and so will job opportunities for marketing professionals.

Job Prospects According to the 2006–07 Occupational Outlook Handbook from the U.S. Bureau of Labor Statistics (BLS), overall employment in the field of marketing is expected to increase faster than average—exhibiting 18- to 26-percent growth—through 2014. The BLS points to growing domestic and global competition in consumer products and services as a key reason for this job growth. However, the growth varies widely by sector: Robust growth is anticipated in scientific, professional, and technical services realms, while a decline is expected in the manufacturing sector. The BLS also foresees increased competition for the available full-time opportunities in the field of marketing overall, especially since hiring contractors in lieu of replacing full-time marketing professionals is becoming a common practice. This news comes as no surprise to marketers in the field, as few have been spared from widespread layoffs and drastic budget reductions. Nonprofit

Additional Resources

Operations consists of all the activities that contribute directly to a company’s main line(s) of business. Consider a company such as Gap, which manufactures and sells clothing in its own stores. Operations for Gap would include everything from the manufacturing of Gap clothing, to the shipment of that clothing to Gap’s retail stores, to the systems the company uses to track clothing that’s sold at both regular and sale prices, returned by the customer, and so on. It would also include the fulfillment of orders placed on the company’s website, and the customer service staff that helps customers with problems, complaints, or other issues. The operations team creates the infrastructure of a company. Operations employees help determine where an organization should be based, its employment policies, accounting practices, distribution channels, and much more. While individual departments determine how corporate procedures are implemented, operations makes sure they’re designed optimally in the first place. The chief operating officer (COO) is a senior member in most organizations. The COO works with the CEO and president to determine the company’s vision. Their ideas are filtered down through the rest of the organization. Senior operations managers determine where a company is based, what its facilities will look like, which vendors to use, and how its hiring policy will be implemented. Once the key decisions are made, lowerlevel operations personnel carry them out. Accountants and controllers watch the books. Administrators and managers supervise line employees. Sales reps and customer service agents ensure that clients get what they’ve paid for. If there’s a problem, operations personnel are the first to hear about it—and it’s their job to find a solution. While operations is a key component of any successful company, it’s back-end work. Most support functions fall under operations’ control. WETFEET INSIDER GUIDE 107

Careers

MarketingPower.com (www.marketingpower.com) Brandweek (www.brandweek.com) Business Marketing Association (www.marketing.org) Careers in Marketing & Market Research (WetFeet Insider Guide, available from www.wetfeet.com) MarcomExchange (www.marcomexchange.com)

Career Overview

Industries

If there’s a problem, operations personnel are the first to hear about it—and it’s their job to find a solution.

Operations Introduction

marketers have had to step up their efforts to sustain their organizations, given the shrinking pool of funding available due to government cuts, scarce corporate sponsorships, and decreased individual donations. Many companies have opted to hunker down, keep a low promotional profile, and wait out the recession, which has meant tough times for marketers in many consumer products companies and advertising agencies. After a few brutal years, however, marketers’ job prospects are beginning to look up. As other industries continue to recover from the recent recession, marketing spending is sure to increase—and with that, so will job opportunities for marketing professionals. The best opportunities will be available to those with a high level of creativity and the technological savvy to conduct marketing activities online. Marketers should also find many opportunities in the health-care sector, the country’s largest industry, which is experiencing explosive growth.

Industries

Introduction

Industries and Careers for MBAs Such functions include customer service, logistics, production, maintenance, and administration. Sometimes, depending on the size and scope of an organization, operations will also include sales, accounting, programming, and marketing. The goal of the operations department is to find solutions to problems before they affect the bottom line.

Requirements Most operations positions require a four-year degree at minimum and at least some industry background. But if you’re interested in climbing the corporate ladder, you should consider getting an advanced degree. Most VPs and COOs have an MBA, and many have a PhD. Without such degrees, promotions to higher levels will take a lot longer. It may also be more difficult to land a job at another company. To be promoted, an individual must prove that he or she can be a good supervisor, get a job done right the first time, manage all aspects of a project, and keep it within budget parameters. A detail-oriented personality, strong analytical skills, and the ability to thrive in a team environment are necessities.

Career Tracks The operations department is responsible for ensuring that a company operates as efficiently and economically as possible. Exactly which functions it controls depends on the size and structure of the organization.

Careers

Controller The controller watches out for the financial well-being of an organization. He or she manages the books, creates profit and loss statements, keeps projects on budget, and prepares financial reports. Controllers work closely with operations managers and other accounting personnel. A strong financial background, an understanding of business processes, and a detailoriented nature are prerequisites.

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Facilities Coordinator Facilities coordinators design the physical environment of an organization. The facilities coordinator is interested in how a building’s design, layout, furniture, and other equipment affect the efficiency and profitability of the business that uses them. The facilities coordinator will buy office furniture and supplies, determine when more space is needed, select appropriate vendors, and be responsible for the facilities budget. Besides having a business management background, the facilities coordinator needs to have a keen understanding of how working environments affect employee productivity.

Logistics Engineer A business needs to plan how work orders will be distributed throughout its organization, and the logistics engineer is the person primarily responsible for such planning. He or she is interested in improving the efficiency and accuracy of order fulfillment, and will map out the process from beginning to end, always on the lookout for possible improvements. This is a detail-oriented position that requires strong problem-solving skills and the ability to conduct indepth analyses of business processes.

Project Manager Most projects will have a single leader who watches over them from beginning to end. The essential role of the project manager is to establish group goals. He or she will also supervise the work of lower-level staff, ensure that deadlines are met, put in requests for additional supplies and staff, and keep a particular project on time and within budget. In most cases, the project manager answers to the operations manager.

Operations Analyst An operations analyst examines how the current operations infrastructure is working. He or she attempts to find areas where the system breaks down, and then finds ways to improve it. Strategies may include changing the work environment, changing employment policies, using different vendors, or

changing the process. A great deal of administrative work is involved. This position answers to the operations manager.

Operations Manager/Director

Job Prospects Job opportunities in operations are expected to grow at about the same rate as the average for all occupations in the coming years, according to the U.S. Bureau of Labor Statistics. Operations is a broad area, though, and some in the field will have much better prospects than others. Those in expanding industries such as high tech may enjoy more opportunities than people in more mature ones, such as manufacturing. Also, in some areas, technology advances will lessen the demand for operations professionals.

Industries

The operations manager or director watches over his or her department, the size and scope of which depends on the organization involved. A large company may have several operations managers. Their job is to determine how the processes in their departments should be implemented and what duties need to be performed. An operations manager also hires and manages lower-level staff, selects the vendors, completes departmental financial analyses, and determines the budget. The operations manager reports to the VP of operations or the COO.

One of the senior managers in any business organization, the COO is responsible for making sure that the entire back end of an organization operates as efficiently as possible. (See the “Top-Tier Management” career profile below for more about senior management roles.) The COO could be responsible for marketing, programming, customer support, sales, accounting, distribution, legal, or just about any other business function you could think of. While the CEO is supposed to be the visionary for a company, the COO is a company’s administrator; without his or her involvement, a company could fail. The COO is a seasoned professional with many years of experience. He or she reports to the CEO and board of directors.

Introduction

The CEO is the company visionary; the COO is the company administrator.

Chief Operating Officer

Additional Resources Brint.com (www.brint.com) The McKinsey Quarterly: Operations (www. mckinseyquarterly.com/Operations) The McKinsey Quarterly: Organization (www. mckinseyquarterly.com/Organization)

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Industries and Careers for MBAs

Careers

Industries

Introduction

Project Management Career Overview Project management is an art, a skill, and a demanding full-time job. Project managers (PMs) are key employees in such industries as construction, engineering, architecture, manufacturing, and real estate development, but many opportunities for PMs exist outside these areas. In computer hardware and software, for example, project managers are responsible for launching new products, developing new technologies, and managing alliance programs with strategic partners. Large corporations such as insurance companies and banks also may hire PMs to manage the implementation of new standards or practices in their many branch offices. Internet companies often look for project managers to oversee site launches or the development of new applications. Whether a project involves constructing a building, releasing a product, or launching a rocket, project managers make sure everything comes together in a timely, cost-effective manner—and they take the heat if it doesn’t. Their high-profile, high-risk work demands multitasking ability, analytical thinking, and excellent communication skills. Project managers live and breathe by their schedules. In most cases, a project is planned down to the daily or even hourly level, and a formal schedule is developed using the critical path method (CPM), a precedence-based technique that determines the sequence in which things must happen. Milestones punctuate most project schedules, indicating the required completion of various steps. Resource allocation is another big part of a PMs’s job. If you’re running a software development project, for instance, you have to know how many engineers will be available for it and how many hours they’ll need to work. Likewise, if you’re running a construction project involving cranes and excavators 110 W E T F E E T I N SIDER GUIDE

that must be leased on an hourly basis, you’ll need to know when to have those machines on site to get the most work done for the least money. Balancing limited labor, materials, and other resources is a difficult task that earns a good project manager top dollar.

Requirements Educational requirements for project managers vary greatly according to the type of projects they manage. For construction projects, a civil engineering degree is usually required. High-tech PMs may need a degree in electrical engineering or computer science. In many cases, the most successful project managers have some type of formal business training, such as an MBA. Project management has a direct effect on a company’s bottom line, so a PM must be able to evaluate a project’s financial repercussions from a corporate point of view.

Balancing limited labor, materials, and other resources is a difficult task that earns a good project manager top dollar. Project managers also need strong leadership skills, the ability to set and stick to a schedule, and an orientation toward getting things done. Professional certification in project management is available through the Project Management Institute, which bestows the profession’s most globally recognized and respected credential: certification as a Project Management Professional (PMP). To obtain the PMP certification, applicants must satisfy requirements involving education and experience, agree to a code of ethics, and pass the PMP certification examination. Many corporations require PMP certification for employment or advancement.

Job Prospects

Project Manager

In general, the field of project management is incredibly hot. As might be expected, project management opportunities depend on the number of projects taking place. When the economy is booming, demand for PMs is usually high. When the economy is slow, look for opportunities in busy industry sectors where a lot of projects are happening. A wide range of industries use PMs to handle everything from launching new products to leading restructuring efforts to converting management information systems. The U.S. Bureau of Labor Statistics predicts excellent job growth for project managers in construction through 2014, though increasing complexity of construction projects could have an impact. The outlook is better for product managers in industries with strong growth prospects, such as high tech and biotechnology.

In this position, you may run a project yourself or lead a management team, delegating task management to assistants. PMs report to the “owner” of a project— whether that’s a real estate developer, a government agency, or your company’s senior management. You’re not paying the money, but you take responsibility for the project’s proper completion.

The outlook for project managers is bright in the biotech and high-tech arenas.

Introduction

Career Tracks

Additional Resources Senior Project Manager

PMForum (www.pmforum.org) Projectmanagement.com (www.projectmanagement.com) ProjectManager.com (www.projectmanager.com)

Industries

Many large organizations that tackle multiple projects at once (especially construction and engineering companies) employ a senior project manager. This person supervises a company’s various project managers, coordinates the allocation of company resources, approves costs, and decides which projects should take priority.

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Careers

Industries

Introduction

Industries and Careers for MBAs

Securities Sales and Trading Career Overview Securities sales and trading is where the rubber meets the road in the investment banking industry. An investment bank relies on its sales department to sell bonds or shares of stock in companies it underwrites. Investors who want to buy or sell a certain stock or bond will place an order with a broker or sales representative, who writes the ticket for the order. The trader makes the trade. Securities sales and trading are high-profile, highpressure roles in the investment banking industry. Unlike other I-banking careers—such as corporate finance, public finance, and mergers and aquisitions, where the emphasis is on the team—securities salespeople and traders are independent, working on commission to bring to market the financial products that others create. In the U.S., the securities business revolves around markets (or exchanges) such as the New York Stock Exchange, the Chicago Board of Trade, and NASDAQ, where debt, futures, options, stocks, and other financial instruments are bought and sold. Salespeople and traders are independent agents working under a simple contract: The firm provides a place to do business in return for a percentage of the business that salespeople and traders generate. Salespeople are called “brokers” or “dealers”. As one of them, you’re expected to build a “book” of clients. No matter how long you’ve been working, and no matter how many clients you have, you’re expected to cold-call. Some new brokers make as many as 600 cold calls a day! Most of the work takes place over the telephone, soliciting clients or selling a particular stock or bond issue. You’ll use analyst research and every sales trick in the book to push your securities to investors.

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Traders make money by trading securities. Although they’re the ones who transact trades for the brokers and their clients, traders are primarily responsible for taking a position in a security issue, and buying or selling large amounts of stocks or bonds using an employer’s (or their own) capital. When they bet right, they win big; when they bet wrong, they lose big. Brokers and traders build their lives around market hours. On the West Coast you’ll start working before 6:00 a.m. to be ready to go when the opening bell rings in New York. There’s no flextime, no long coffee breaks, and no time to run errands.

Image is important: How you dress, how you carry yourself, and how you act will be as impressive to a securities sales manager as your educational or professional background.

Requirements There are no hard and fast educational or professional prerequisites for selling securities. However, the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) require brokers to obtain licenses, depending on a particular broker’s role: • You’ll need to pass the Series 7 General Security Sales License Exam to sell most types of securities. •

To sell commodities or futures contracts, you must pass the Series 3 Exam.

•

Most brokers also need to pass a Series 63 License Exam, dealing with state laws regarding securities sales.

Managers need the Series 8 License for general sales supervisors in order to manage branch activities.

•

Managers supervising options sales personnel or compliance need to pass the Series 4 License Exam.

Securities Sales Representative (Broker) Securities sales representatives—or “brokers”—act as intermediaries between buyers and sellers, and they make money from commissions. In some cases, such as when trading stocks, bonds, and options, they need to be registered as agents of an investment house. Brokers advise customers and then make deals happen. They usually specialize in a particular type of security, such as futures, options, or bonds. Those who do well make a lot of money and may get a larger office and an assistant, but the work remains fundamentally the same. Brokers are sometimes called “dealers,” “investment advisers,” i”nvestment counselors,” or “investment representatives,” but the functions are consistent.

No matter how many clients you have, you’re expected to coldcall. Some new brokers make as many as 600 cold calls a day!

Industries

Would-be salespeople must also pass a background check to make sure they have no criminal history that would preclude them from being an honest broker. Aside from the background and license checks, branch managers hire salespeople based on evaluations of candidates’ abilities to think on their feet, communicate effectively, deal with numbers, and, above all, make cold calls. Traders can break in by assisting other traders on the floor and starting trading accounts. Image is important in sales and trading: How you dress, how you carry yourself, and how you act will be as impressive to a securities sales manager as your educational or professional background. If you have experience in sales, that’s a plus, but a manager is really looking for people who will put in the hours, make the calls, and generate revenue. And, as in all areas of financial services, networking is key. Scour your alma mater’s alumni connections, pester your friends and relatives, and follow any lead that might get your foot in the door.

to outstanding students, providing candidates with much-needed experience and connections. Visit a company’s website to research its internship offerings. Introduction

•

Career Tracks Branch Manager Senior sales representatives who have proven themselves on the trading floor may become branch managers. Branch managers hire salespeople, make sure that brokers meet sales and revenue targets, and fire those who don’t do well. While branch managers make additional income in the form of commission overrides (a percentage of the commissions made by the brokers working under them), they’re responsible not just for their sales, but also for their office totals.

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Careers

In securities sales and trading, you’re in business for yourself. If you’re a sales representative, your career track will consist of building your business, or book, to the point where you have a substantial number of clients for whom you trade. If you’re a trader, your career track will consist of trading financial instruments (stocks, bonds, and other securities). As with securities sales, the job of the trader doesn’t change over time; traders get sharper, develop better instincts, and benefit from experience as they go along. Due to the pressure of the career, few stay until middle age. If you’re interested in trading, check out internship opportunities. Many firms offer summer positions

Industries and Careers for MBAs

Introduction

Floor Trader Floor traders run around the floor of an exchange (such as the NYSE), swapping tickets and making trades. Floor traders are responsible for locating buyers and connecting them with sellers (or the other way around). As prices change quickly in a turbulent market, traders are under constant pressure to get deals executed at the prices their clients (or their employers) specify. If a trader can’t find somebody to buy or sell at a specified price, the buy or sell order won’t go through, and nobody profits—not the buyer, not the seller, and not the trader (or the trader’s employer), because there’s no commission. Traders work during an exchange’s hours of operation, usually without breaks.

Industries

Desk Trader NASDAQ is what might be called a “virtual” stock exchange, as it has no physical building where traders meet to make deals with each other. Brokers have a “NASDAQ desk,” which means they can trade on NASDAQ. That desk is actually a bank of traders, all staring intently at their computer screens to see how the market is shaping up, speaking into several phones at once in a mad rush to find buyers or sellers whom brokers or online investors have requested. (Trades made through an online account, such as at Charles Schwab or TD Ameritrade, go directly to the trader, bypassing the broker.)

Careers

Job Prospects With the bursting of the tech bubble earlier this decade, the decline of the stock market, worldwide recession, and widespread distrust of corporate officers resulting from scandals at Arthur Andersen, Enron, Tyco, and other companies, the action in the markets pulled way back from the levels seen in the 1990s. As a result, salespeople and traders experienced a period of mass layoffs as investment banks and brokerages cut costs and consolidated. As of mid-2006, though, things were looking better for folks interested in these careers—mainly because money had been pouring into the markets for a year. Charles Schwab, Merrill Lynch, and Smith 114 W E T F E E T I N SIDER GUIDE

Barney each had more than $1 trillion in client assets at the start of 2006. Longer-term, the picture is just average: The U.S. Bureau of Labor Statistics expects the number of jobs in securities, commodities, and financial services sales to grow by 13 percent between 2002 and 2012, which is about the same as the projected rate of job growth overall. Because this profession is associated with so much burnout, however, the turnover rate is high, which means more jobs for those starting out. With online and self-service brokerages, investors can direct their own investment strategy, but most are willing to pay qualified professionals to guide them. No matter who actually places a buy or sell order, there will always be a need for securities traders who work behind the scenes, locating the buyers or sellers who are willing to accept the securities transactions their clients or brokers want to make. But expect to face rigorous competition for securities sales agent positions, where only the most experienced applicants will get the jobs.

Additional Resources Institutional Investor (www.institutionalinvestor. com) Investor’s Business Daily (www.investors.com) Knowledge@Wharton: Finance and Investment (http://knowledge.wharton.upenn.edu/category. cfm?cid=1) The McKinsey Quarterly: Financial Services (www. mckinseyquarterly.com/Financial_Services) Financial Industry Regulatory Authority (www.finra.org) Ohio State University: Finance Site List (www.cob.ohio-state.edu/fin/journal/jofsites.htm)

Supply Chain Management

Requirements

“Supply chain management covers everything that happens to a product from cradle to grave.” Proficiency in an enterprise resource planning (ERP) software package such as SAP, Oracle, or i2 greatly enhances your marketability. Being detailoriented is always a prerequisite for supply chain jobs—you can’t overdo attention to detail when communicating with prospective employers, either in informal conversations or during the interview process. Finally, because of the cross-functional nature of the field, communication and people skills are paramount.

Career Tracks While there is no single career trajectory in supply chain management, most insiders we spoke with agree that the apex of the supply chain cosmos is VP of supply chain management. The path has yet to be blazed for supply chain managers to attain the ranks of chief operations officer, let alone CEO. In the past, this has been because logistics positions have been very specialized roles. More recently, supply chain has been a cross-functional role and has yet to gain traction as a set career path in most corporations. The good and bad news is that supply chain roles are highly specialized. Not only is it somewhat difficult to cross over into slightly different functional roles, but functional knowledge doesn’t transfer completely across industries. That means an SCM professional can’t easily WETFEET INSIDER GUIDE 115

Careers

In general, supply chain management recruiters aren’t looking for generalists, even at the undergraduate level. Most companies have a select group of programs from which they recruit, and those programs, such as the ones offered by Arizona State and the University of Wisconsin at Madison, typically offer degrees in SCM.

INSIDER SCOOP

Industries

Supply chain managers attempt to integrate and optimize all the steps required to produce the right amount of the right product and deliver it to the end user at the right time. In other words, supply chain management (SCM) is involved in every aspect of getting products to customers, from raw materials on. The focus of this profile is those industries for which SCM is essential to remain competitive in the marketplace: manufacturing, retailing, and logistics and distribution. Manufacturing companies typically emphasize materials management and sourcing functions. Roles within the retail and merchandising industries tend to emphasize logistics, warehousing, and inventory management. Like retailers, the roles of logistics companies emphasize (what else?) logistics, inventory management, and warehousing. Most larger companies offer the entire range of logistics services, from transportation and carrier services to warehousing and inventory management. Job descriptions in SCM suffer from a blurring of responsibilities over titles, a lack of standard nomenclature for positions, and, often, a lack of distinction between ranks. In the first case, the job description of a role may encompass a number of disciplines. For instance, in a manufacturing company, a procurement or purchasing role might include inventory management responsibilities; in a distribution or logistics outfit, those same responsibilities might belong to a transportation role.

Introduction

Career Profile

If you aren’t in a school at which a company recruits, an internship might get you in the door. Because the market is soft now, companies are demanding industry and functional experience even for entry-level positions. In the MBA world, companies look for supply chain coursework or dedicated supply chain programs. Certifications aren’t required, but they do help in a slack market. Common certificates are Certified Purchasing Manager (CPM) and Certification in Production and Inventory Management (CPIM). Nearly one-quarter of purchasing professionals hold a CPM certification, and nearly 10 percent hold a CPIM certificate.

hop from one industry to another—say, move from an SCM position at Wal-Mart to one at BMW. However, it also means there are fewer candidates nipping at your heels, ready to take your job. Having said that, here are a few of the general career tracks one can follow in supply chain management:

Supply Chain Manager The supply chain manager role is the holy grail of supply chain management and logistics, both sought after and somewhat rare. The scarcity of pure supply chain manager positions results from the interdisciplinary nature of the role—it spans logistics and distribution, purchasing, manufacturing, inventory management, and even marketing and product development. The supply chain manager reviews existing procedures and examines opportunities to streamline production, purchasing, warehousing, distribution, and financial forecasting to meet a company’s needs. A supply chain manager typically develops strategies to cut costs, enhance quality, and improve customer satisfaction.

Vice President, Supply Chain Management At the top of the SCM food chain, the vice president is part of the senior management team and usually reports to the chief operating officer of a company. The VP’s purview often includes all supply chain functions, including logistics, facilities, and purchasing. This person translates executive strategies into supply chain functions. Often, directors of the various functional areas in supply chain report to the VP.

Careers

Industries

Introduction

Industries and Careers for MBAs

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Logistics Analyst/Manager Analysts and managers work on a wide range of logistics functions, including warehouse and distribution operations, forecasting, planning, logistics information systems, customer service, and purchasing. Analyst roles might deal with an area within the logistics function, while senior roles such as manager or director involve overseeing a team of analysts. Managers negotiate and contract with suppliers and carriers, develop supply chain metrics and strategy, and oversee day-to-day management of logistics functions. Analysts devote much of their time to problem solving, forecasting, and ensuring that operations are running within determined metrics. The ladder to a manager-level position might take five to seven years to climb; a director-level or higher position can take 10 to 15 years.

Candidates will find many opportunities in the health-care sector, which is experiencing explosive growth.

Process Engineer Process engineers typically analyze processes within any number of industries—manufacturing, distribution and transportation, or retail—and develop improved processes that make better, safer use of labor, materials, energy, and other resources. For example, a process engineer in a distribution center might work to improve outbound and inbound traffic processes or invoice handling. In a manufacturing environment, the process engineer might develop a better method for handling raw materials. A process engineer might also develop the metrics used to manage the processes once they’ve been improved.

Supply Chain Consultant

Job Prospects

Additional Resources Council of Supply Chain Management Professionals (www.cscmp.org) Institute for Supply Management (www.ism.ws) Supply-Chain Council (www.supply-chain.org)

Career Overview

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Careers

Top-tier managers, also known as “executives,” or “the executive team,” run a company’s business. They include the chief executive officer (CEO), chief operating officer (COO), president, and others. Their knowledge about an industry and their ability to provide direction can mean the difference between an organization’s success and failure. They’re involved in planning and policymaking at almost every level, including both the longterm strategy and its day-to-day execution. Execs decide what products to produce, which markets to go after, and the company’s general philosophy. They’re also expected to raise money, keep a company profitable, and answer to shareholders. In addition, the executive teams also needs to be its company’s biggest advocates. They communicate the value of their organizations to the outside world. Employees, strategic partners, shareholders, and even a company’s chairperson rely on the senior management team to promote the company’s interests at every turn. Execs give their subordinates a reason to want to work for them. They instill a sense of pride in shareholders. Company executives tell the press why people should care about their products, marketing strategy, and goals. Without their guidance, a company could flounder. They bring a measure of order and purpose to their organizations. Small businesses and startups often have limited management teams. The founders, who take on the titles of CEO and president, typically lead such companies. As a company grows and departmentalizes, the top-tier management function is divided into a family of positions. While the CEO and president remain committed to the overall mission of the organization, other positions have more specialized responsibilities. Some examples are the COO, chief financial officer (CFO), chief technical officer (CTO), and general manager

Industries

According to the 2006–07 Occupational Outlook Handbook from the U.S. Bureau of Labor Statistics, supply chain management jobs are expected to grow more slowly than average through 2014. Not surprisingly, significant declines in the manufacturing sector should greatly affect the number of SCM positions available in the U.S. in the near future. While no role clearly outshines others in terms of employer demand, more and more companies are reorganizing around supply chain management (as opposed to logistics or materials), so supply chain manager roles are becoming more prevalent. Candidates will find many opportunities in the health-care sector, the country’s largest industry, which is experiencing explosive growth. Also look for opportunities in burgeoning subsectors such as specialty pharmaceuticals, biotechnology, and medical device manufacturing.

Top-Tier Management Introduction

The consultant is a senior role, usually post-MBA, that, along with the analyst and project manager, is a member of the team on a consulting engagement. The supply chain consultant is a rare and desirable role in the SCM field. The consultant reviews existing procedures and examines opportunities to streamline production, purchasing, warehousing, distribution, and financial forecasting to meet a company’s needs. This person typically develops strategies to cut costs, heighten quality, and improve customer satisfaction.

Careers

Industries

Introduction

Industries and Careers for MBAs (GM). Underneath them are department heads who run specific areas of an organization, such as marketing or human resources. They in turn hire and oversee managers who handle the day-to-day supervision of lower-level employees. In this way, larger corporations have developed a well-defined chain of command. Lower-level employees answer to operational managers, who oversee their daily work. Many companies have several tiers of frontline and middle managers. Such supervisors are responsible for managing the functions of an organization. They set project goals, make hiring decisions, settle staff disputes, and ensure that deadlines are met. Operational managers report to department heads, who set policy and determine the goals of their divisions. Department heads answer to the executive officer who controls their area of specialty. For example, the heads of Web development and information technology answer to the CTO. Executive officers work together to set the goals and policies of a corporation. Their work is overseen by the general manager or the president, who supervises the entire organization. Above them is the CEO, the highest-ranking manager. The CEO is held accountable for all aspects of the business. However, the CEO still has to answer to the board of directors. In publicly held corporations, the board is ultimately responsible for the success of an organization. Members of the board have a fiduciary responsibility to look after the stockhareholders’ (owners’) interests first and foremost. If the company begins to falter, they have the right and the duty to correct the situation using any means possible, up to and including firing the CEO or any other top executive. In some cases, the board takes control of all managerial functions until a business has stabilized. Executives can be found in every industry and organization, from publicly held companies to nonprofits and governmental agencies. Before entering management, typically they’ve first proven themselves in their core industry. Usually they work for a while as operations managers, then slowly work their way up the corporate ladder. 118 W E T F E E T I N SIDER GUIDE

Requirements Top execs must have significant experience in both industry and management. Quite a few have consulting experience at a top-tier strategy firm. An MBA or other advanced degree from an Ivy League or top-ten school can improve your chances of being offered an executive-level position. Successful general managers have a lot in common: They’re charismatic leaders who inspire their employees to reach their highest potential. They’ve developed strong written and oral communication skills, a flair for public speaking, the ability to make others feel at ease, and a strong, focused sense of purpose. Furthermore, they know how to get things done and aren’t afraid to rock the boat to do so. Long hours and extended travel are expected. Many execs are on the road more than 90 percent of the time, visiting national and international offices, attending meetings and conferences sponsored by associations, monitoring operations, meeting with customers, and attending trade shows.

The CEO is the organization’s superstar; the president works behind the scenes to make sure nothing gets bogged down in operations.

Career Tracks The responsibilities of those in top management vary depending on the size and type of the organization involved. Smaller companies and startups usually have a few key execs. As an organization grows and diversifies, executive duties are broken up into a family of positions, which become increasingly

specialized as the business grows larger. The following are descriptions of positions found in most publicly traded companies.

President

The COO works directly under the president and CEO. His or her primary job responsibility is to oversee department heads and other key executives; together they establish the operational policies for an

Successful executives have a flair for public speaking and a strong sense of purpose. They know how to get things done and they’re not afraid to rock the boat. organization. The COO makes sure everything runs smoothly. As needed, he or she provides reports on operational functions. While the COO’s role is crucial, it isn’t one that receives a lot of press. As long as operations go as expected, the COO is left to his or her own devices. Successful COOs may be promoted to president or CEO.

General Manager GMs fill a role similar to that of the president and COO. Typically, GMs work for manufacturing companies and oversee their day-to-day operations. They spend most of their time in the office, working with department heads and other chief executives. Their primary function is to understand how their businesses operates and how to achieve or maintain its long-term economic viability. GMs analyze financial WETFEET INSIDER GUIDE 119

Careers

Working directly under the CEO, the president manages the daily operations of a company. While the CEO is the organization’s superstar, the president works behind the scenes to make sure nothing gets bogged down in operations. He or she understands the corporate structure, how the industry is shaped, and what the company’s primary objectives of the company are. The president interprets the vision expressed by the CEO and puts it into language that can be followed by everyone within the organization. Most of the president’s time is spent working with

Chief Operationsng Officer

Industries

A CEO is the highest-ranking manager in a company. Most are offered near-total autonomy in handling the day-to-day affairs of their organizationss. All staff members work under their authority. CEOs of publicly traded companies must answer to a board of directors. The board sets the standards by which a CEO must operate. Board members can order a CEO’s dismissal if they feel that he or she is not meeting the objectives they’ve set. A CEO must have a clear vision for the future of the company, then express that plan to employees, shareholders, and business partners, inspiring them all with confidence. CEOs must be able to raise money by getting venture capitalists to buy into their dreams, or by convincing Wall Street to underwrite a bond offering worth hundreds of millions of dollars. When necessary, CEOs will ruffle feathers. They know how to get things done and are willing to do whatever it takes. Some CEOs are more involved in their companiesy than others. In small organizations, the CEO may be part of day-to-day operations. Other CEOs concentrate on promoting their company by giving speeches, attending trade shows, cultivating the press, and acting as corporate evangelists. They leave the direct management work to the president and general manager.

Introduction

Chief Executive Officer

other executive officers, particularly the COO; together they ensure that the company’s main goals are being achieved. The president’s job is demanding and full of pressure. Those who succeed in it are often promoted to the CEO level.

Introduction

Industries and Careers for MBAs data and are responsible for producing profit-andloss statements. They directly oversee the product development, operations, finance, sales, marketing, and purchasing departments. GMs answer directly to the president (or possibly the CEO) and are often first in line if these positions become available. Most GMs are seasoned managers with strong financial backgrounds. They may have worked at various positions within their organizations. At the very least, potential applicants must have significant industry experience. As with any other executive position, general managers are expected to perform at all times. Any decline in profits can lead to their termination.

Industries

Chief Financial Officer The CFO is responsible for managing and analyzing all the financial resources of an organization. He or she works with the CEO and other chief executives to plan and implement strategies that will maintain the company’s success. CFOs determine how much capital their company needs on hand to operate properly. They also reinvest corporate profits in safe but lucrative business opportunities. Some other possible responsibilities include raising capital, acquiring or merging with other businesses, taking a company public, and analyzing changing tax laws. Most CFOs usually have an extensive accounting and finance backgrounds. They’re detail-oriented and highly analytical. Possible promotion opportunities include becoming a COO, general manager, or president.

Careers

Chief Technology Officer The CTO develops an organization’s short- and long-term IT goals. This exec must keep abreast of technological developments in his or her industry, develop technology-related product strategies, evaluate development options, establish strategic partnerships, negotiate licensing arrangements, and manage all intellectual property–related matters. The CTO works with the CFO and COO to determine which technologies meet the needs of employees without breaking athe company’s budget. Besides having a strong technical background, the 120 W E T F E E T I N SIDER GUIDE

CTO must be an accomplished manager. The most important skill for a CTOs to have is the ability to analyze changing technologies and predict how future advances will affect a company’s business model.

Job Prospects According to the U.S. Bureau of Labor Statistics, positions for top executives will grow at about the same rate as jobs overall between 2004 and 2014. But competition for these positions is always fierce. They have a high profile and pay well, often with significant bonuses and stock ownership accompanying six-figure salaries. (At Fortune 500 companies, many salaries start at the seven-figure level.) The best opportunities will go to managers who have proven track records for improving their company’s efficiency and competitive edge. It’s almost as hard to stay in one of these positions as it is to obtain one top managers who fail to perform are often let go after a short tenures. If you can manage to make your way to a top management position, you’ll be in a comfortable place career-wise. High-level execs receive many corporate perks, including spacious offices, administrative support, subsidized worldwide travel, and large severance packages. The hours can be long and the pressure intense, but the financial incentives are commensurately rich.

Additional Resources American Management Association (www.amanet. org/index.htm) Brint.com (www.brint.com) ExecuNet (www.execunet.com) The McKinsey Quarterly: Organization (www.mckinseyquarterly.com/category_editor. asp?L2=18Organization) The McKinsey Quarterly: Strategy (www. mckinseyquarterly.com/category_editor. asp?L2=21Strategy)

WETFEET INSIDER GUIDES series

Interviewing Ace Your Interview! Beat the Street® I: Investment Banking Interviews Beat the Street® II: I-Banking Interview Practice Guide The Wharton MBA Case Interview Study Guide: Volume I The Wharton MBA Case Interview Study Guide: Volume II Resumes & Cover Letters Killer Consulting Resumes Killer Cover Letters & Resumes Killer Investment Banking Resumes

Financial Services Careers 25 Top Financial Services Firms Careers in Accounting Careers in Asset Management and Retail Brokerage Careers in Investment Banking Careers in Venture Capital Financial Services Companies Deutsche Bank Goldman Sachs Group JPMorgan Chase & Co. Merrill Lynch & Co. Morgan Stanley UBS AG

Consulting Companies Accenture Bain & Company Booz Allen Hamilton Boston Consulting Group Deloitte Consulting McKinsey & Company Career Management Be Your Own Boss Changing Course, Changing Careers Finding the Right Career Path Negotiating Your Salary and Perks Networking Works! Industries and Careers: General Industries and Careers for Engineers Industries and Careers for MBAs Industries and Careers for Undergraduates Million-Dollar Careers Industries and Careers: Specific Careers in Advertising and Public Relations Careers in Pharmaceuticals Careers in Brand Management Careers in Consumer Products Careers in Entertainment and Sports Careers in Health Care Careers in Human Resources Careers in Information Technology Careers in Marketing and Market Research Careers in Nonprofits and Government Agencies Careers in Real Estate Careers in Retail Careers in Sales Careers in Supply Chain Management

Industries

Job Hunting Getting Your Ideal Internship The International MBA Student’s Guide to the U.S. Job Search Job Hunting A to Z: Landing the Job You Want Job Hunting in New York City Job Hunting in San Francisco

Consulting Careers 25 Top Consulting Firms Careers in Management Consulting Careers in Specialized Consulting: Information Technology Consulting for PhDs, Lawyers, and Doctors

Introduction

Ace Your Case - Consulting Interviews Ace Your Case® I: Consulting Interviews, 3rd ed. Ace Your Case® II: Mastering the Case Interview Ace Your Case® III: Market-Sizing Questions Ace Your Case® IV: Business Operations Questions Ace Your Case® V: Business Strategy Questions

Careers WETFEET INSIDER GUIDE 121

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