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Friday, March 23, 2012

The Final 22 for the Top MBA Blog: Vote for my Blog

I am pleased to announce that I made Ecollege's Final 22 for Top MBA Blogs in the free world. I am also almost as pleased to ask my readers to please click here to vote for the Roll Away the Dew! Voting ends March 30, 2012 at 5 pm EST. The 22 MBA blogs will be ranked to see who will be killed and eaten by the other MBA blogs. Oh, that's the Hunger Games.

I'd like to say that I haven't asked my readers for anything before and to please vote. However, 42% of my readership is a direct relative so that's not exactly true. However, I have read cousin's graduate schools essays recently so it's payback time!

If you need another reason to vote, here's an endorsement on my Facebook page:
You got my vote mainly because I only read MBA blogs that cover colonoscopies.

I dominate my niche.

Thursday, March 8, 2012

MBA Admissions Season Review: Advice for Applicants

I closed the books on my 5th year of professional MBA admission consulting. Actually since everything is electronic, there is no actual book to close. Perhaps, I should say that I shut down my hard drive but that sounds like it has a double meaning.

Any readers who have weathered my digressions are probably wondering how successful the admissions season was and I would respond cryptically that my clients got into the schools that they should have gotten into. With the margin of error in the admission process shrinking like the credibility of baseball's steroid policy, that is a successful season. Especially since 80% of the applicants have reasonable shot of successful admissions. Applicants are no longer destroying their chances with essays about their most successful solo project when the question was about leading a group. However, I am an inverted sentence structure and Sesame Street voice over away from sounding like Yoda so I will get specific about how applicants can be successful or unsuccessful with their essays:

1. Your admissions consultant should not have to tell you what your career goals are: Even though schools like Harvard no longer ask about an applicant's career goals, this is still a relevant question. This question is even still relevant despite having only has four answers which are:
  • I want to work in industry X with a first job of finance analyst, product manager, or marketing and advance to the Chief Office of my division
  • I want to work in Investment Banking in order to transition into Private Equity or Venture Capital (Hedge Funds are so 2009)
  • I want to work in Management consulting and then start my own business
  • Some combination of the previous three bullet points
The reason schools stopped asking this question is because the bullet points above were the only answers they were getting. It no longer provided enough information to distinguish candidates since everyone figured out. Since the bar is so low, applicants need to be able to trip over it. However, I have to answer this question for at least half my clients. These are rarely my successful clients. I appreciate it's a hard question since the real answers to the career goals question are typically:
  • I want to work in an industry where I can make more money than I am making now
  • I don't want to work in engineering, computer programming, or yak herding anymore
  • If I knew the answer to this question, why would I need an MBA?
  • Some combination of the previous three bullet points
The gap between the first and second set of bullet points is where applicants can fall. Even if the question isn't being directly asked, the ability to have enough introspection to come up with the reason for an MBA provides focus and a process for answering the other questions.

2. The applicant dictates the story, not the essay questions:
I commonly get asked what are the right answers to the questions or how to answer a question. That's the wrong question. Questions are an easily driven vehicle to share information. The real question is what information do you want to share? The answer is 1) example of your professional skills or your favorite work story, 2) example of your extracurriculars or what are you most interested in outside of work, 3) example of your leadership skills (since business schools still cling to the belief that they train leaders and not managers), 4) any other great story that you use in every interview or essay that you didn't fit in already. My #4 is about starting a running water project as a Peace Corps volunteer and it can answer questions such as: Tell me about a time that you failed? Tell me about a time that a project wasn't clearly defined? Tell me about a time that you encountered resistance? Tell me about an international experience? Tell me about a time that you didn't have access to modern plumbing while working with a cross-functional team?

Essays should draw from the four examples above. It doesn't take much work to make them fit into the question. For example, the following are all the same question:
  • Who are you?
  • What matters to you most and why?
  • What is your most significant achievement?
  • What has shaped your life the most?
  • What would you tell the student body about your candidacy?
  • What would you tell admissions about your candidacy?
  • What would you tell a stoned cashier at Safeway about your candidacy while you are trying to decide if you should buy the raw cookie dough or the Boston Creme donuts?
These are all open ended questions which can be answered any way the applicant decides. Perhaps, the easiest way to describe every question is "What have you done with your life and why should we f#cking care?"

3. Stop being nice and start getting real.
As more and more applicants are able to actually answer the essay with a writing style that doesn't resemble a Microsoft Project document, the opportunity to differentiate is to make a connection. Making a connection with admissions is just like making a connection with a new friend, coworker, or the person who asked to share your table at a crowded airport Quizno's. It's about sharing appropriate amounts of information, including an accomplishment or something that you did, and being genuine.

The most amount of personal information that you share with your table mate at the airport Quizno's is perhaps flight destination and your favorite sandwich sauce. For admissions, it's anything that you have done and why it's important to you. Don't share what happened to your friend, what your boss should have done, or philosophize about what you would like to do. What happened to your friend is their story and philosophizing about innovation or leadership is a classic mistake that applicants make when answering an essay. An essay about leadership shouldn't sound like an essay from Harper's magazine but about what you did with your team.

The threshold for accomplishments that you share is if you can explain how it's important, provided guidance for your future decisions, or shaped who you are. I think that winning a mustache growing contest while at Wharton was an awesome accomplishment but I can't explain why it's important to me without saying that it's awesome and then nodding a few times. Therefore, it doesn't meet the threshold.

Genuineness is the hardest concept for applicants (and the human race) to grasp. It involves not saying that everything turned out well and they had no regrets. We always overanalyze everything that we do and see mistakes. It's not about making catchy puns and alliterations with how your cooking hobby will help you add a little bit of thyme to your learning team. It is about talking about struggles, how they made you feel, what allowed you to overcome struggles, and what you learned from it. It's about the shades of grey in life or as Fletch would say, "Charcoal." Nothing turns out perfectly in our lives and it shouldn't in an applicants' essays.

Tuesday, January 31, 2012

Whither the Health Insurance Broker Profession?

As the Mitt Romney would put it, "Creative destruction is about to hit the health insurance broker profession." As an average American would put it, "The health insurance broker profession is under a lot of stress and a lot of them might lose their jobs. Occupy might have a lot more marchers."

For those who have never interacted with a health insurance broker, they are also called agents or producers. Producers is a relatively new term that reminds me of farmer's markets but I guess that brokers thought it made them sound productive. They do pay attention to marketing as they also call their trade organization, the National Association of Health Underwriters, despite the fact that no health underwriters are actually members.

Besides coming up with clever names, brokers sell health insurance and are compensated by the insurance companies or health plans. The purchaser of the health insurance company does not pay brokers anything. Besides helping clients understand the insurance market, they do ensure that insurance companies receive the correct information about the groups or individuals and help enroll the client in the insurance company's system. This does save an employer group's human resource staff time. They will also advocate for clients who have difficulties with insurance companies. Brokers that work with very large employer groups call themselves consultants and can be paid by the client because they help them design their health insurance plans. For example, they might come up with a two for one colonoscopy provision to help encourage preventive services.

Why is the broker industry facing the wrath of the creative destruction of Romney and his merry band of private equity, hedge fund, and other exotic financiers? They don't charge clients for their services and keep insurance companies honest. The answer, as always, will appear as a series of bullet points:
  • The Medical Loss Ratio requirement: Insurance companies now must pay 80%-85% of every dollar they receive on medical care. That leaves 15%-20% for profit and administration like paying brokers their approximately 8% commission. Broker commissions can be 10%-20% of the insurance company's administrative costs. It creates a very clear image of taking a dollar out of the insurance company's pocket and giving it to the broker. Now that administrative costs are a limited resource, insurance companies are starting to question their administrative expenses. Broker commissions are a large one. There was a movement in Congress to exempt broker commissions from the medical loss that is making slow progress through Congress. I assume that while brokers are good at coming up with creative and fun names, they must not have good as lobbyists as private equity firms. Well, their lobbyists are probably better than poor people who have the worst lobbyists.
  • The Health Insurance Exchange: States are creating online websites called Exchanges that helps consumers by standardizing health plans to make comparison easier. In other words, they do the work of brokers. These Exchanges charge insurance companies a fee or commission to sell their plans on the Exchange just like brokers do. Are insurance companies going to pay two commissions to agents who are selling their plans? Probably not which is why brokers are rightfully concerned.
  • Ability to act strategically: While the previous examples are external forces acting upon brokers, this 3rd point is self-inflicted. If brokers had an ability to act strategically, they could find a way to reposition their value proposition. Kind of like if Herman Cain could find a way to not act like a 70's porn star, he could have propositioned er I mean positioned himself differently. An example of my strategic thinking is that I make sure there is toilet paper in the bathroom before I position myself on the toilet seat. From talking with insurance brokers, I have learned that they are very tactical and tend not to think beyond the next sale. When a panel of insurance agents was asked about their approach to health reform, most talked about what they were going to do next week. When I ask brokers about advice for plan improvements, most say that if we added more features and lowered the price, they could sell more. When I press them and ask how much more they could sell, I realized they just mean it would be easier for them to sell our product if it sold itself.
  • What's the value proposition? Is the broker profession doomed and going in the direction of mortgage brokers? No and yes. There will be less insurance brokers out there. However, a role can be carved out. Strategic insurance brokers (or brokers who make sure there is toilet paper in the bathroom) have changed their value proposition to demonstrate how they save health plans administrative costs. They can provide training to groups or other brokers on the impact of legislation so health plans don't have to. They answer questions to save time for health plan's customer service teams. They ensure the enrollment process is smooth to support health plan's billing and enrollment teams. Since their commission is paid out of the health plan's administrative budget, they are demonstrating their administrative savings. Strategic brokers are moving away from just being a distribution channel to an outsource customer service, training, and enrollment function.
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