When Erica Thompson-Dias, 44, sat in front of a panel of investors this March with her business partner, it was the last step in a long process. She works as a banking executive by day and also has experience launching startups on her own.

But now she and a fellow classmate-turned-business-partner were students in William Jessup University’s applied entrepreneurship course, part of the school’s MBA program. The curriculum requires students to present a business plan to actual investors. Their professor — himself a serial entrepreneur — had guided students in identifying a problem to solve, selecting target customers and channels for reaching them, balancing projected costs with potential revenue streams, and conducting market surveys and analysis.

Increasingly, universities are adopting that kind of classroom model, combining business theory with real-world experience. With enrollment numbers in MBA programs dropping nationally, more schools are tailoring their offerings to the needs of area industries and helping students make connections that get them in the door with companies after graduation.

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For Thompson-Dias and her partner, William Jessup’s program offered a leg up. After their 20-minute presentation, it soon became apparent they’d done well. “I’m in,” one of the panel members said, according to Thompson-Dias. “I’d like to have some collateral, so we’d need to talk about the details. But I’m in at $50,000.” Thompson-Dias and her partner now are planning next steps, including whether to take on investors at all. To maintain more control, they may bootstrap the business, she says.

To the extent that a university can create corporate leaders, there’s likely no more important program than the MBA. Almost a quarter of all master’s degrees awarded are in business, and almost seven of 10 business school applicants want to get into an MBA program. About nine of every 10 U.S. companies surveyed early last year said they planned to hire recent MBA graduates in 2017. So when programs turn out graduates who can lead, they’re synthesizing the rocket fuel that can launch a regional economy.

A 1998 estimate of NBA legend Michael Jordan’s impact on the U.S. economy put the figure at $10 billion. It appears no one has done that calculation on Steve Jobs. But it’s safe to say that corporate leaders who excel can create cascading economic value for a region or the country. Those who don’t can lead their companies into losses and layoffs that do the reverse.

PROGRAMS MUST MODERNIZE

Nationally, interest in MBAs is flat or falling. In a 2017 national survey by the Graduate Management Admission Council, 68 percent of full-time MBA programs reported getting fewer applications than the previous year, a trend that started in 2014. Only one of seven other flavors of MBA program — part-time “lockstep” programs, which require cohorts of students to move through the curriculum, taking the same courses at the same time — reported more applications than the previous year.

In Sacramento too, MBA program enrollments have been more down than up. Of six MBA programs at area universities, four saw declines and two had increases from 2015 to 2017. (One school, University of the Pacific, says that because a new dean is taking over its Eberhardt School of Business in July, it wouldn’t be appropriate to comment.)

Local program administrators cite several factors for the dip in enrollment trends. In bigger programs, more students are moving away from generic MBAs and toward specialized degrees. UC Davis’ Master of Science in business analytics, for example, had 600 applications for about 40 seats for the 2017-18 year, says James Stevens, senior assistant dean of student affairs at the Graduate School of Management. And the program is only in its second year — for the 2018-19 academic year, applications stand at 750. That reflects a trend in business degrees: enrollment in specialty programs like accounting and finance grew by 30 percent globally between 2012 and 2017, according to the Association to Advance Collegiate Schools of Business International, which assesses and accredits MBA programs. Meanwhile, total enrollment across UC Davis’s full- and part-time MBA programs — consistently ranked among the nation’s best by U.S. News & World Report — fell from 485 in 2015 to 413 in 2017, according to the school.  

MBA enrollments are countercyclical with the economy, says Glenn Worthington, dean at Brandman University’s School of Business and Professional Studies. When unemployment floats up, student numbers surge, and when jobs come back, people choose work over study. For the moment, work is plentiful: California’s unemployment rate hit an all-time low of 4.4 percent in January, down from more than 12 percent in 2010. At Brandman’s Roseville campus, the MBA student body shrunk from 63 in 2015 to 26 in 2017, according to the school.  

And MBA programs have saturated the market, according to some experts. “The overall marketplace for MBAs has matured — like any maturing market, it fragments and you end up with specialized niches,” says William Glick, a former board chair of the Association to Advance Collegiate Schools of Business International. Ryan Sagers, a group president for DeVry University, says he sees that crowding happening with online MBA degrees — more programs mean lower enrollment for individual schools. DeVry’s MBA numbers on its campus in Folsom dropped from 66 to 39 from 2015 to 2017, according to figures compiled by the Sacramento Business Journal.

ADAPTING THE MBA

Historically, the full-time MBA was the dominant program. But today, four-fifths of MBA students go part time, says Glick. That has big implications for programs: since nearly all part-time MBA students choose that route so they can keep working, they’re also attending local schools, which means programs have to stay laser focused on their local industries, Glick says.

One way UC Davis does that is “industry immersion” courses that bring company executives into class to work through “live” case studies. Case studies have long been an MBA staple, but 80 percent of them used worldwide are written by Harvard Business School professors. This means students are subject to how an observer interpreted the information, says Rao Unnava, dean of the UC Davis Graduate School of Management. Not so at UC Davis, where students tackle real-world problems for these companies. Executives present a challenge they’re up against, and students work in teams to propose solutions.  

“In these immersions, it’s the person at the center of the action telling you directly what he or she faced, and you’re working directly with that actor,” he says.

Those immersion courses also give students the chance to work in cross-disciplinary teams. Each class focuses on an industry specific to the region: food and agriculture, biotechnology, sustainable energy and one called CFO for Technology Industry Immersion. These popular courses attract graduate students from other disciplines, meaning MBAs work with master’s and Ph.D. candidates in the sciences. “In food and agriculture, you’ll have students from food science and technology, chemistry, nutrition, environmental science and environmental engineering sitting with MBA students,” says Unnava. The approach is meant to mimic the mixing of specialties that happens on company projects.

It also helps address a complaint Unnava hears from executives about MBA programs — they’re too agnostic. “Companies are saying that we need people who actually care about this industry. … We are giving students the chance to get immersed in an industry,” says Unnava.

The market niche for William Jessup’s MBA is turning out graduates who think systematically when planning entrepreneurial ventures, as Thompson-Dias and her partner were required to do in their capstone project. Business school dean Stephen Strombeck says the school recruits professors with at least 15 years of industry experience. William Jessup’s MBA program on the Rocklin campus started in May 2016 with 16 students and has since grown to 80, he says.

Sacramento State’s MBA has a different sweet spot: students without undergraduate degrees in business. Most want to take a few qualifying courses to get into a program and then turn that degree into a job. So the school tightly integrates career services into its MBA curriculum with workshops on interviewing, cover letters, networking and more, says Marty Wilson, an interim associate dean at the school’s College of Business Administration. The school’s enrollment has seen a small decline, going from about 208 in 2015 to 193 in 2017, according to school officials.

Brandman’s Worthington says his school’s focus is students in their mid-30s who are looking for the shortest possible path to a degree. That means veterans or current soldiers who have served in certain leadership positions can get up to 12 credits based on their experience before they even walk in the door. And students with certificates in Brandman specialties like health administration and business intelligence and analytics get credit toward an eventual MBA, saving them significant coursework, he says. Similarly, Sagers says DeVry offers “stackable” degree programs — he says students can earn an MBA in as few as 10 courses.

WANTED: REAL-WORLD EXPERIENCE

There’s a reason why many MBA programs require students to take on projects that can carry into their careers post-graduation: Those who hire MBAs say a track record matters just as much as the degree. Lokesh Sikaria, founder and managing partner at Folsom-based venture capital firm Moneta Ventures, says an MBA isn’t an essential when he looks at hires — more important is business experience. Sikaria, who has degrees in electrical engineering and computer science but not an MBA, says he is succeeding with Moneta because he has run a lot of companies. Still, an MBA has some signaling value: “Since most students work while getting their MBA, you know that if they graduated they have the ability to step up,” he says.  

Susan Wheeler, workforce planning and education relations strategist at SMUD, says it’s essential for MBA programs to include a capstone project in which students apply what they learned. This creates leaders with a more well-rounded view of business problems. For example, engineers with MBAs may be better able to see the finance and marketing implications of solutions they design, she says.

And Diane Miller, president at executive search firm Wilcox Miller & Nelson in Sacramento, says most employers express a preference for MBA candidates, but the degree is almost never required; experience matters more. The operative word being “almost.” “All things being equal, which they almost never are, they’ll take the one with the MBA,” she says.  

MBA alumni feel decidedly positive about their choice. In a 2016 GMAC survey of almost 15,000 MBA graduates worldwide, between 70 and 95 percent said their MBA had been personally, professionally or financially rewarding. In a program-administered survey of UC Davis 2017 MBA graduates three months after matriculation, 90 percent of respondents reported that they had jobs, and respondents said that they were earning average salaries of almost $96,000.

In a 2018 GMAC survey of Sacramento State MBA graduates, four out of five said that the program had increased their earning power, two-thirds said that the program had given them opportunities for quicker career advancement, and two-thirds that the program had prepared them for their chosen career, according to the university. (Brandman and DeVry don’t keep data on postgraduate outcomes for MBA students, according to the schools, and WJU’s program is too new to yet have outcomes, having just graduated its first class.)   

Put 36-year-old Davis native Kristen Parker in that camp. For eight years starting in 2006, she steadily moved up the ladder as a buyer in the retail industry. Then she took two years off to raise two kids. When she wanted to jump back into work in 2016, retail had become a “different, frightening place,” she says, with brick-and-mortar retail chains in free fall.

Instead, she enrolled at UC Davis and landed a finance internship at Intel in Folsom. This fall she’ll start a full-time job in Intel’s finance department in Santa Clara, where she and her family will be moving. “I feel like I’ve gotten my mojo back,” she says. “Without the MBA, my job at Intel wouldn’t have been possible.”